Ann: Appendix 4C & Quarterly Activity Report - 31 March 2024, page-12

As I always concede, I am a huge believer in the quality of the product range and the game changing efficacy of X-Bio technology.
However, I believe that the investment risk associated with this stock remains very high:

1. Just over one quarter of cash in the bank based on current cash burn.
2. Sales down 23% Q on Q. Now requires 34% Q on Q growth over the next 3 quarters to achieve bottom of the guidance range! A stretch!!!!
3. Clearly a capital raise is a very high likelihood ($10m - $15m), so the share price is likely to come under pressure.
4. Change in Sales team from full-time staff to agency sales force could put revenue growth under severe pressure if the incentives to sell are too low and will impact net margin negatively if the incentives are too high. This is a big change to selling strategy and introduces significant additional risk.
5. The jury is still out on whether IV Hall is going to be another Judith. So far he has not filled me with confidence, does not confront the difficult questions head on and has disappointed the market on a couple of occasions already.

So now we wait on the second quarter's performance to see if the strategy is paying off or not.

• We will need to see significant revenue growth from this quarter. ($7m - $8m)
• We will need to see significant drop in selling costs (staff and other expenses)

In the mean time, the major study news for H1 has been published so there is unlikely to be any positive news to shore up the share price. I suspect they will have to raise cash this quarter. So sadly the share price is not going to look good for a while still.
I have changed my sentiment to HOLD.