Thought I would try my hand at a State of the Nation summary for...

Thought I would try my hand at a State of the Nation summary for VTI as we move into 2024 - all just my own reflections.

Governance - 9.5/10
I think we are very fortunate to have a high quality team leading VTI. The board all hold shares, and has no passengers that I can see:

• Mazzo (chair) was done a flawless job since appointment - transition from old CEO with period of vacancy to save cash, and then the new outstanding appointment of of JC.
• Akerman is a high profile proponent of Myopia management through the "Review of Myopia Management" website, with strong corporate background in vision care
• Rubenstein was a long term Director of Cooper Companies and involved in the development of Misight - like the way he brought on market too when joining the board
• Miller is the corporate governance expert, and went in strongly on the recent share offer (350K)
• Silverberg is the nominee of Thorney - must admit I would have liked to see him participate more strongly in the recent raise

Management looks equally good:

• JC the CEO was responsible for leading the specialty eyesore division that developed Misight - so he has done it before.
• Brian Lane as COO/CFO has done an excellent job on cost control and financial predictions have been realistic
• Ashley Tuan as CMO has done it before, again with Misight, and the Protect trial seems to be running smoothly.

Finance - 7.5/10

• Cash position good for the next 12 months
• Recurring revenue with >95% of customers maintaining use of Naturalvue
• Revenue growth steady
• No debt

Equity - 9/10

• Major shareholder Thorney has increased their holding to 49% under the last offer - strong indication of confidence
• Three main employees (CEO, COO, CMO) all have (or taken) significant parts of their renumeration in shares, with COO/CMO already holding large positions
• Market cap of $12.8M at a SP of 25c is still likely to be less that CY23 revenue which should be around US $10M - great value proposition.
• Highly held

Product performance - 9/10

• Long-term real world data suggests that Naturalvue may have a significant advantage over the key competitor Misight as it control myopia better in the longer term (post 1 yr)
• Consistent data across 3 different sources of real world studies adds significant weight to Naturalvue's performance
• RCT study fully enrolled, with preliminary 1 yr data out and right on the money
• Customer retention close to 100% and consistently above Might (around 90%)
• Recent award in the UK for Menicon Bloom day

Market opportunity - 10/10

• Myopia looks now to be the key topic of Optometry conferences
• Up to 50% of world's population will be myopic by 2050 on current growth rates
• Surveys of ECPs indicate they see Myopia management as the key area of growth for their businesses
• Misight has increased sales from CY22 of US $44M to CY23 of $70M, indicating the potential for growth in the Myopia market

Market Penetration - 5/10

• Take-up of Naturalvue by ECPs in the US has not increased over the last 2 years or more, suggesting the lack of FDA approval is a significant drag, and off-label prescribing is not attractive to ECPs particularly with Misight as an alternative
• No strong indication as yet about the market performance of the white-label Menicon bloom day
• No demonstrable progress on entering China even though it has been the topic of company commentary for some time.

Taken together, this is the strongest position that VTI has been in since I've been invested (over 5 years). Some key questions for the next 12 months:

• Will the 1-yr RCT results increase the market penetration of Naturalvue?
• Will the RCT results support for the real world data that predict a stronger performance than Misight at the end of 2024?
• Will Menicon Bloom take off in Europe and Asia given all the activity that Menicon is placing into it?
• Will VTI release a Toric version to capture the 30% of the market that need it? Noting that Misight now has one.
• Will VTI strike a partnership that allows us to enter China?

I'm hopeful that the answer will be yes to at least some of those questions.