Media, page-270

... latest snippets from W#lsons... some good detail here to digest..

FY24: The Med’s script in FY25E reads …

We maintain our OVERWEIGHT rating on ImpediMed with a revised PT of $0.17 per share. The
stock is trading at a material discount to fundamentals because the market doubts that the (still
relatively new) team at ImpediMed can summon enough revenue clout in the short term to avoid
raising equity capital. And to be fair, it can look tight by FY26e, based on FY24’s revenue levels
and growth performance; even when we include the slated 10% opex cut for FY25e.

If one thinks
through the script for ‘The Med’ in FY25e, one quickly realises just how wide the disconnect
between fundamental valuation and sentiment has become. The US insurance coverage map
gets fully coloured in. SOZO’s ‘heartland states’ Texas and California reach critical mass (85%
covered lives). ImpediMed starts signing multicentre deals with large IDNs/AMCs. Those deals
get larger and suddenly there’s a PME-vibe to the stock. ImpediMed re-prices its back-book of
legacy contracts as renewals (immediate SaaS uplift and margin). The inflection point in
TCV/revenue momentum arrives, obviating capital concerns. The stock triples. And breast cancer
related lymphoedema (BCRL) goes the way of smallpox.

| Key Points
FY24 summary and thoughts on SOZO in FGY25e. ImpediMed reported $10.3M revenue this
year, detailed analysis of which is available (quarterly 4Cs) for 1Q, 2Q, 3Q and 4Q. We are
characterising FY24 as a reset year, as hackneyed as that sounds. Everything changed (Board,
management, register, revenue model) except the value proposition in BCRL. In fact, that actually
got stronger with private insurance coverage building independently to 140M covered lives.

We assess 100% coverage as perhaps 230M covered lives in USA; as our usual practice is to omit
30% of the population as non- or under-insured. We expect the remaining ~90M lives to come
through over the next 6-9 months as annual payor reviews roll through and/or further data
requests complete.

Completing that (2+ year process) then assures coverage quality in the states
where BCRL population (and SOZO placements) have equivalent density. It also means the
commerciality of the SOZO model becomes easier to implement in a financially accretive way.
This is what McKesson’s US Oncology Network wanted to see when we spoke with them in
2020 when they first started looking at SOZO. Unlocking large consolidated systems (IDNs,
AMCs) should become easier once the coverage map is coloured in and receiving payment for
SOZO testing is routine.

Analysis and model changes. No changes to revenue or EBITDA forecasts, having only adjusted
for 4Q24 results a month ago. The outlook for stable operating liquidity over FY25e looks
comfortable (end-FY25e cash $10.3M).

cheers ..