Ann: Quarterly Report - September 2015, page-16

Spartacus,

Based on comments made at the AGM the directors are not keen at this point on that “care and maintenance” option.

Medivet was effectively in “care and maintenance” during 2013 in the lead-up to the aquisition by MLA. The Medivet shareholders had no more money to invest - hence the deal with MLA.

MLA started to invest in 2014. We've seen a refreshed website, more sales personnel, research and development with universities, autologous cancer vaccine, new lab open, etc in that time. The investment has not only been in cash, but also investment in time by management to get improved accounting and management and reporting structures in place too. With this investment the company has started to see good growth in sales since mid-2015. However, even with that sales growth the business will continue to lose money and drain cash for the foreseeable future.

Medivet are at a stage now where they need further investment in sales personnel. There is also costly investment to be made in allogeneic FDA trials if they are to remain current into the future with their product offerings. Unless they keep investing further millions Medivet will slowly go backwards.

It was made clear the company is continuing to explore all options and “care and maintenance” is one of them (but obviously not favoured). They have tried to find a suitor without success so far after an extensive search. If no better suitor was to come along in 6-12 months time (likely) then it would lose further shareholder value by draining cash, profits and valuable management resources in the meantime.

Personally, any lingering doubt I had about the merits of their strategy were answered at the AGM. Darryl, Bruce and Geoff were expansive in their responses to shareholder questions. They have an obvious determination to make the company profitable and get the company on the right footing with the focus from 2016 being only on human healthcare.

The meeting highlight was meeting Angelo Maltabes, the inventor of the Autostart burette who was in attendance. Your humble correspondent got a demonstration of how this device works and its operation finally “clicked” like a lightbulb coming on after all these years. It was hard to leave the meeting without taking the device home, but was told it was needed for further demos in Sydney. Full marks to Angelo for not giving up on seeing this burette gain greater acceptance. It’s an ingenious design and if MLA re-focusing on human healthcare gives this a better chance to succeed then things are looking more rosy already.