Ann: Appendix 4C & Quarterly Activity Report - 31 December 2023, page-19

If the company can achieve the objective of becoming cashflow and EBITDA positive within this financial year (which they have committed to and guided), then we should not need more capital.

Then the key drivers of the share price will change from funding uncertainty to the normal drivers for a novel early stage biotech company.
Financial

• Gross Margin currently circa 80% and stable.
• Growth Rate of 160%, 31% and 89% in the last three years and guidance for the current year of between 63% and 81%.

Product

• Continuous growth in clinical evidence.
• Advancement of major study.
• New product pipeline.

Operational

• Continuous improvements in supply chain.
• Growth in client base.

There are more key drivers, of course, but to my mind the above drivers are demonstrating continuous and significant progress.
In my view, once the company demonstrates cashflow positivity, it is correct to pivot valuation and share price expectation to a multiple of revenue approach and or DCF approach.

An example, if NXS does become cashflow positive in Q4 2024 and guidance is from US$36m for the year.

Q4 '23 Revenue = US$7.1m and lets assume a very conservative 10% Q on Q growth rate or 46% annual growth rate (much lower than achieved to date - last three year compound growth rate of circa 85%)

Q1 '24 Revenue = US$7.8m
Q2 '24 Revenue = US$8.6m
Q3 '24 Revenue = US$9.45m
Q4 '24 Revenue = US$10.4m (Lets assume this is when they break even and cashflow is positive)

Total '24 Revenue = US$36.25m (Let's then assume a continuation of the 10% Q on Q growth rate)

Total '25 Revenue = US$53m
Breakeven required US$10.4m/quarter or US$41.6m

Potential '25 profit = US$53m - US$41.6m * GP% of circa 78% = US$8.9m = AUD$13m profit and with the growth rate, stable margin, patent protection, new products....., I would not be surprised to see a earnings multiple of 30+ times.

Lots of water to flow, I know, but I personally think these numbers are very conservative.

I would love to get others thoughts and feedback.