Happy to see Thorney buying - I have them at an average price of...

Happy to see Thorney buying - I have them at an average price of about $1.18 now. With their man Silverberg on the board, they are acting on presumably what is up-to-the-moment information.

Good situation for retail buyers being able to position well below the major holder who is so invested in the company.

Been thinking a bit more about VTI's business model. There are in fact three models that can be distinguished I think:

• Model 1 - US market (and I think Canada too) in which we sell to a couple of major distributors who don't provide any further service. Distributor margin is likely to be around the 3-5% level I think
• Model 2 - UK market that users a distributor (Positive Impact) that also supplies marketing and training programs. Distributor margin could be as high as 15-20%
• Model 3 - European market using Menicon's labelling (Bloom day) and full support. I don't remember seeing any comment on the profit-sharing with Menicon, so this is a pure guess, but one would have to think it could be close to 50:50.

For the 6 months to June 2022, gross profit for the US/Canada region was 45%, whereas for Europe/Asia it was 30%, consistent with the likely difference between model 1 and 2. Assuming here that Menicon figures are not included in these numbers, which I don't think they are.

So, for a 3 month supply (both eyes) at a sales price of US$140 for each eye, with an ECP Margin of 30% (middle estimate - confirmed below) revenue to VTI looks like:

• Model 1 - $280 - 0.3*280 - 0.05*280 = $182 (worst case for major distributor margin)
• Model 2 - $280 - 0.3*280 - 0.2*280 = $140 (worst case assuming 20% margin for Positive Impact)
• Model 3 - ($280 - 0.3*280)*0.5 = $98 (worst case on profit sharing with Menicon?)

Revenue to VTI could then be 65%, 50% and 35% of the sales price for each model, respectively, based on these assumptions.

Gross profit (47.5% at the moment from Q3 2022) will therefore likely depend on the proportion of each model in the revenue mix going forward.

Something to keep in mind as the UK starts to contribute more, and if Canada comes on as quick. Any sales in China in the future likely to be a model 2 situation given the need a strong local partner.