Image Scan Holdings (LSE:IGE) — AGM Proceedings

0:01 Good afternoon, ladies and gentlemen, and welcome to the IMAGE SCAN Holdings PLC AGM proceedings. Throughout this recorded meeting, attendees online will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question submitted today. However, all questions will be reviewed with responses published on the Investor Meet company platform where it is appropriate to do so. I'd

0:32 now like to hand you over to chairman Tim Jackson. Good afternoon, sir. Well, good afternoon, everyone. My name's Tim Jackson. I'm chairman of the company, and it's my privilege to to lead this part. It is now 01:30, so I'd like to inform those of us in the room

0:52 and also those who are observing via the online platform. With me today is all the board. So we got Vince Theory, Sarah Atwell King, Richard Lever, and Sunil, Vad Gamma. There's no planned fire drill today. So if the fire alarm does go off, then we need to exit. Follow me or one of the directors, and we'll direct you to the exits. So the plan for the meeting today is that Vince is gonna run through a brief presentation, and after that, the board will take any questions people have got, and then we'll move to the formal business of the meeting. So, Vince, over to you. Okay. As Tim said, a very warm welcome to everybody, particularly our long standing shareholders. It's nice to see you, lots of faces and a special thanks to everybody who's made the effort to travel up to see us here today. So we'll do a presentation and we'll also give you the opportunity at the end of the formal proceedings to go downstairs, have a look in our demonstration facility, and some of the staff will be available from the sales team as well to talk you through some of the latest products we've been doing and also how we're approaching the market.

2:06 What I would say is that we do give the opportunity to go downstairs. Please don't take any photographs, etcetera, and be conscientious of the kind of questions you're asking the staff. You're sophisticated investors and that kind of thing, so let's try and keep them so that we don't leave them astray in that regard. In terms of the proceedings for today, I'm just going to go through this presentation. We have our nomad here with us, Mike and Sarah from WH Ireland. So we're obliged to show you our legal obligations and disclaimers here. So let's move on to where we are in terms of structure of the board. So we started a planned change back on a year ago now.

2:53 And in July '22, we made the official change where Tim became chairman, Sarah became CFO, and Richard became vice chairman, and I and myself moved from an interim CEO position to being the full time CEO. So that whole transition period was planned and was affected very smoothly, And we have a good, strong functioning board. And with the additional Sunil Bagama, who's brought some extra technical expertise, particularly related to our sector, I think the board is even more strengthened. And we can talk about Sunil's strengths later as well, if you like. But let's go back to the performance and review of how we got on in 2022.

3:41 It wasn't a good year. We've published the accounts. A lot of the turnover has been impacted by the slowdown to COVID, and everybody uses COVID as an excuse for everything the pandemic affected this. What I can say is that it truly has impacted our business. So for the first couple of years, whilst we're transitioning through the the COVID period, there were a lot of government tender projects that were ongoing, and they were still being operated, and they were being fulfilled. But during the second year of COVID, because a lot of these government departments we're predominantly selling in, certainly on the portable side, into government organization, police, armies, security forces, military type police, they weren't particularly occupied in their offices.

4:32 So any new projects weren't initiated. And so that we found so the impact in years one and two of the pandemic weren't hugely significant for us, but the impact in last year was very significant because we didn't see the same level of government contracts. And and that's the reason why the orders that we see there are significantly down from the year before. I'll go on to talk about how we're seeing that progress in the coming year so that you've got a feel for what's going on there. So in terms of the orders were down, the sales were down. One area where we were very good is in terms of keeping the margins and the profit up. And some of that is to do with the mix because the new equipment business was down. We were more reliant on the after sales and service and support revenue, which is traditionally strong, has the higher margins.

5:28 And I think it's a testament to the team within the organization that we were quite ingenious in how we looked after installations. We've got installations across the globe, and I will show you that later, particularly on the industrial side, and we were able to keep all of those customers happy in terms of our service and support and get them to renew contracts in times when we actually couldn't even travel. So we did a lot of online remote servicing, and then we engaged the use of our partners.

5:55 The overheads increased somewhat last year. The year before, we had limited amounts of travel. In 2022, events, shows, exhibitions started to come back on stream, so we invested quite heavily in getting that back. And our cycle period or gestation period for tenders and contracts tends not to be a three or four month type thing. It tends to be a six, nine month type process. So when you attend these shows, you expect to see some of the outcomes. You can get a quick win two, three months, but you would expect to see anything between nine and twelve months. So we're hoping that that investment there will start to pay off in our twenty three performance.

6:40 The stock we had to make conscious decisions to protect our stock and show some resilience. We, like pretty much everybody else, was impacted by silicon shortages, chips, etcetera, etcetera, electronic shortages, and even mechanical shortages.

6:57 So we invested more in stock, and we also invested more in exhibition or demonstration equipment. So we launched a new product, the AS1 integrated system, and we've invested in demonstration equipment on that. So hence, our stock has also increased there. Period end order book is up somewhat from the previous year, and the period end order book is always helpful because it gives you a good launch pad into the coming year. So just the fact that the period end order book is stronger than the previous year gives you a better indication of how we think '23 might progress. And the cash, obviously, we've depleted cash, but if anybody knows us and our business, we tend to operate on neutral cash terms at worst.

7:47 We're generally taking significant payments upfront before we deliver goods to customers. What I did mean to say is that if anybody's got questions, we will take them at the end of the process.

7:59 I just would like to go through the product range. So on the top left there, and if we go clockwise, we've got the AS one. That's the latest incarnation of our portable X-ray system. The portable x-ray systems are bread and butter for IMAGE SCAN. And what we've done there is we've taken the existing technology, the ThreatScan LS1, LS3 and LSC, and said we want to move up in the specification and price range. And that's what the ThreatScan AS1 does. It uses a different technology, which we can talk about later. So it's a full field imaging or a solid state detector panel, whereas our traditional panels have been a scanning type panel where they have movement within the actual detector.

8:46 We then look at the AXIS CXI, which was originally invented or designed around the male screening plus the ability to act like a baggage screening system that you would see in an airport type environment. So we can deploy this

9:01 not only in mail screening rooms but also in the front of house corporate buildings, embassies, etcetera. So in the year we've had a number of successes with that. The AXIS 64, we've traditionally for twenty, thirty years produced conveyorized systems. That market has become very tight margin wise now. The very large players in that market have had two very, very bad years because the aviation sector has been incredibly hard hit during the COVID times. So that sector has become incredibly cutthroat, and some large players have put some very low cost items out there. So for us, that's not going to produce a huge amount of revenue and margin. And on the end there, the MDXI 400, which is our bread and butter system that goes into the industrial sector based around catalytic conversion inspection.

9:56 That business is holding up well, and it's a strong bit of industrial business with the aftersales revenue that goes with it. We move on. Yes. In the middle of last year, I was given some figures. I'm referring to what you have at the top left hand corner there. Yes. The real Partners. So in the middle of last year, I was told you had 50 partners, so that's an increase, 20%. And if that's the case, that's very good. But with the qualification, then I was told you had 64 territories, and now you're saying 83 countries. Yep. So when you expand, that's potentially good for sales, but it also carries additional overheads. So a, are they in balance in your opinion, and b, can you expect another next year to be bigger?

10:50 I do believe they are in balance. We are actively always striving to increase. One of the the things that Tim is always saying to me is we need wider coverage. So if we've got more coverage of the marketplace, we've got more opportunity to sell. We you've also mentioned the fact that we recently recruited in the sales team, and that recruitment in the sales team has then had the net effect of increasing the range of partners. And the installed base has also increased likewise to the same regard. I'll show you a geographical map of where we are installed. I don't think we're widely extended in terms of my role. I'm handing more over to for the sales team, and we've got a very experienced sales team within here. So we understand our market very well. We understand our partner network very well.

11:41 And the judicious thing is to pick the right partner. You invest in the right partner, and they will pay you dividends over the long term. And some of our partners have been around for a long time. We've got

11:52 partners going back ten to twelve years, And the partners we've done a review of our partner network recently, which is we've reviewed what their sales have been over a three and a five year period, and also not just sales, but inquiry levels. So As a private investor looking to the future of the company, growth in market activity, obviously, in important factors. So you might consider putting those kind of things in future reports in comparisons with previous years to show the progression of the company. That's a good point. I'll take note. One of the things just reflected back in the increase in stock, one of the things we've had to do is invest in demonstration equipment because we've more partners who want demonstration equipment. And The priority on the balance is the cost of maintaining a bigger area. You you gotta keep those in balance. Can you say they are? Yes. Yes. Sales team would always like a demonstration piece of product in every single country, but we've we've got to balance that and make make the equipment work hard for us, and and we do measure it.

12:59 And just in terms of sorry. Looking at the the revenue, it's held up in America, but in the Asia and Indian subcontinent, it's greatly reduced. Yes. Do you actually see the the reasons for why it's reduced in some of held up in America?

13:23 In I can see the reasons it's reduced in in Asia and the Indian Subcontinent is is that they have been much more extremely affected by the pandemic than any other territories we've seen. A state in terms that this point, that's you know, that you're looking for the Asian ones to improve. Pickup. Yes. Is there any reason for that? What's it based on? There is a reason for that because I I don't think that market could carry on for another three years and just not performing, and we've also already seen actual activity from those markets in terms of China's going to be a bit slower. The Indian market is beginning to recover because we see the activity levels in inquiry and demonstrations. Is that with existing customers?

14:09 It's across the range. So our partners in those territories would be attacking or targeting new revenue as well as existing customers. So one of the things we've got is we can go to our existing customer base and say, you've been using this line scan system. We'd now like to morph you up to the higher level systems, and we've already got that entry into that customer. So we are starting to see India's coming back online quicker than China, and Southeast Asia is beginning to pick up a little bit as well. Yes.

14:48 How is that worked out? In terms of his usefulness to the business, it was incredibly good in time in trying to educate the market. A great marketeer wasn't we didn't get the results in terms of sales that we expected or anticipated there. Some of that could have been down to timing, some of it down to acceptance of the product within that market, but he no longer works for us. We have employed two other partners in North America to look after North America. But they were

15:22 both introduced by John Howell, who's the ex US marine that he talked about. So just going on from there, the portable system is our bread and butter. It's where we've got a great reputation in the marketplace. People know us. Our partner partners know us. And so whenever there are inquiries, tenders, etcetera, we will jump on those. But what we do need to do is increase the revenue from that space. And by introducing this amorphous silicon market, we are moving up the levels in terms of resolution and also the price point and sophistication of the equipment. So that's been launched in the marketplace and has been received very well.

16:10 Everywhere we've taken that piece of equipment, people have really liked it and said this is good. And it is at a slightly higher price point for us as well.

16:21 If we look at the where we are, our our installed base, so we've got seven this is just on the security side of things. So this is we've got 78 territories there in total. Somebody can very kindly put all those dots on for me. So we are well covered there. New Zealand are two New Zealand and Austria are two notable additions to that. So we are well covered in terms of global coverage. I guess the one area that we might look at is the volumes that we produce out of The Americas. South America and North America tend to be low volumes for us. So if you were looking at a region where we'd like to do more from, it could be those regions.

17:11 And we're certainly looking for India to come back on stream compared to the past year and a half.

17:20 The next slide will show us our industrial installations. So this is primarily based around catalytic converter inspection in the process where we're checking the amount of precious metal that's in a washcoat that is layered onto the catalyst and the installation there. So we've had new installations there in Canada in particular and one in America as well. So in total we've got 64 different installations of that product over 16 different countries. I think we mentioned in the release this morning that there's obviously a transition within the automotive industry to EV.

18:08 So what we're seeing at the moment is the catalyst manufacturers, and this is pretty much en masse. It's theme running through all the manufacturers that we supply where they're focusing their investment on Eastern Europe and Asia in terms of where they invest. So we are seeing some of the decline in North America and The UK in terms of production capabilities, and our production capability is tended to go out to East Eastern Europe or Asia.

18:36 But as I've said, that market has held up for us. We've got a program of refurbishing and replenishing the systems that are installed to bring them up to current manufacturing standards, both hardware and software, which is also good business. So in terms of what we want to do and where we're looking to go for, which is where the next few slides we're we're looking at. So we've we've covered what we've been doing, but what I want to get across is what we're likely or wanting to do in the future. So we've invested heavily in this threat scan a s one, and that's at the higher end of the portfolio offering. We want to refine, mature that product, make sure we've got really good coverage in that area. So at the moment, we've been at the mid range level with our line scan system.

19:22 So if we go into this more for silicon area, we want to make sure we've got a full range of components, ancillary devices, and options at that level as well. So that's going to be the focus for the r and d team this year.

19:35 But what we've also got to do is look at other partnerships that we can work with. So the amorphous silicon, we predominantly do everything in in house ourselves. We've our own electronics engineers, design engineers, mechanical software, etcetera, etcetera. We build everything But we've got to look sometimes outside of this organization for technologies that we can build into and partner with. And that's what we're saying now. And that's what we've got to look for to help grow the business.

20:09 So in terms of outlook, I think also as we mentioned in the release this morning, We made organizational changes within the year, so what we're looking at doing is working in a smarter, more efficient way with with and and the team around us here has been incredibly good in sort of taking on extra responsibility responsibility, and being really ingenious in terms of getting results for customers and bringing new products to market. So we've got to commend the team here for doing that. So we've made those changes. The other thing we've got to do now is look at new markets. As I've said, the new products have been well received, but well received needs to turn into sales and into revenue. And that's the stage where we're getting to now. So we're placing the product as widely as we can. It's being very heavily demonstrated at the moment, and that process will continue.

21:05 What we want to do is research our partner network, any associated companies that might have technologies that we can bolt on, that we can synergize with. And there are a number of players out there where there may be some synergy in terms of if we're producing portable EOD equipment that could be portable EOD tools manufacturers, bomb suit manufacturers, robot manufacturers. That's the kind of people we're we're looking to to work more closely with because that's the way I think the industry will go.

21:36 It'll be packaging up products together rather than just somebody going out and buying one single x-ray panel. They may go and buy an x-ray panel with a bomb suit, with a robot, etcetera, etcetera. On the industrial side, as we've said, we're migrating to low cost territories, and we're going to continue to support and upgrade the systems that we have. And we will still see a number of new capital equipment purchases, but over a period of time, that will decline in line with the automotive industry change from combustion engine to EV technology. So we've got to be conscious of that. But one of the areas we've got to look at is can we get into that fuel cell manufacturing type business?

22:18 Because I believe and I think it's general belief is that lithium ion will be around for so long, but hydrogen fuel cells could very well be the future of EV. And if we can get in there at an early stage, that would be good for us to inspect their components in terms of during manufacture. That's what we would try to do. We would try to replicate what we do for the catalyst industry in the hydrogen industry. Technologically, it could be quite a challenge. We've got to get into there, and that's something it's an area where I can see the progression from where we are to a new industry would be a logical progression because that's what our customers are doing. So our customers are attending to be catalyst manufacturers. They're attending to move into hydrogen cell type production.

23:10 That means that all use I'm not a technical person. All use of hydrogen with a competitive fuel would require containers. All such containers would need inspection. We're not talking about containers. We're talking about the buildup of a fuel cell, which is actually layers, very thin layers, micron thick, which are impregnated with precious type metals. And so we're we're building up fuel cells in that regard. Hydrogen is used in fuel cells?

23:40 Yes. That's what we believe or the considered opinion would be in the future because lithium, we believe, is on a set a lifetime. Kind of stuff going on in universities? Going on in manufacture. Yeah. So all the car manufacturers are using lithium ion at the moment, but they're all looking at hydrogen. We're trying to be in touch. Yeah. Yeah. We're desperately trying down that room. Supply chain issues, we're still going to see some supply chain issues this year. We've still got higher stock than we would normally have, and we're still seeing lead times of thirty six weeks for components,

24:23 which is ridiculous, quite honestly, because if we want to deliver in twelve, fourteen weeks or sixteen weeks, you get thirty six week lead time. It causes problems. So we do expect those to exist but hopefully diminish. And obviously, we see a cost of living rise and a cost of material rise and a cost of shipping rise.

24:47 One of the other things I would like to talk about is the shareholder engagement. We have one of the objectives when Tim took over as well as chair was to try and reengage some of our major shareholders and and in particular, Vice President International. So we've started on that process, and I think we've achieved a good level, a good foundation. We've reestablished good contact with them and we can actually have a relationship with them. So that's been a positive step.

25:23 So two areas for growth. Organic growth, which I've done at length up until this point, and I think the strategic growth is the fact that if we are more engaged with our shareholder base, if we trade well over the coming year, options become available to us. As a listed company, we've got a lot of costs, but one of the things about having a listed company, you do then potentially have the vehicle to be acquired, make acquisitions, etcetera, etcetera. But you need to have shareholder backing for that. So what we're trying to do is put the foundations in place so that we can do that in the future. Sorry. Is there any background to that? Did StepRise actually say we want to have some Yeah. There is. There there is. So we initiated the the contact to reengage RiseNet back in July.

26:20 And we started talking through the organization that we have and what we'd like to do going forward. And it was their estimation that we could do with extra industry expertise specific to our sector in terms of X-ray and X-ray expertise. So we said, Okay, we're open to that. We understand what you're saying. You're obviously a major shareholder and we want to respect your views. So a mutual related party between WiseStep and IMAGE SCAN suggested that a scout grant suggested Sunil who's got decades of industry experience. So he was nominated to us. Obviously, ViceNet was very keen or very happy for us. So we interviewed Sunhill, did the background checks, obviously went through the city regulations, etcetera, and that's why we've appointed Sunil.

27:18 And Sunil has got you'll tell me how many years of experience he's got with RapidScan. RapidScan are a major player within the security x-ray industry.

27:28 But what I will say is that Sunnell has already started to contribute to the technical side of our business. So we're already seeing a practical day to day benefit of having Sunnell on board. That affect the product range? Does it affect the customer base? It at at the moment, it will hopefully improve our ability around the product range. It's not gonna have any immediate effects in in terms of extending the product range. It will give us a much better understanding of our own products as well, and also our ability to support products will be improved with Sunil's

28:12 appointment. I there's there's got any other questions at this moment in time. Just looking online, Vince, you've answered there was another question about Sunil, but do want to just talk about ThreatScan and any recurring income that might be generated by that? So in terms of ThreatScan, in the industrial sector, we get recurring revenue. Everybody takes out an annual support contract, normally $24.07. In the security sector, it tends to be less so the case. In fact, it's rarely the case in terms of getting up the sales revenue, and that's an industry thing. I come from a different industry where almost obligatory everybody took out service or an after sales type contract. But within the security industry, it doesn't happen. There's a number of reasons for that.

29:05 If you're supplying to a secret service somewhere, they just don't want you to be involved. They don't want you to hook into the equipment after sales, etcetera, etcetera. So we we get a a small element of it, of after sales revenue from the portable x-ray, but nothing significant. Okay. Brilliant. Thank you. Any other questions in the room before we move on? Could I just ask?

29:29 You've said very confidently about the superior products that you've got and how much advantages they've got over competitors. As you Did say, at the end of the day, it comes back to sales. Yes. And you talk about your partners being confident in their ability. What steps have you taken to ensure that you're actually going to get sales and something out of these existing and also the new partners. And in terms of different to what is already happening. In in terms of what we've done there is our partner network is tends to be very strong for a relatively small organization.

30:16 They have for a long time been crying out for more product from us. So their enthusiasm and appetite for product is not in question. So what we're doing is providing them with the demonstration equipment, as much demonstration equipment as we can, as quick as we can so that they can take it to market. The sooner they take it to the market, the sooner the process can complete, and we can get Is that in place or is that ongoing? In place. It's in place. So already partners have got Got equipment. And we're desperate for more equipment. We've got equipment in Abu Dhabi. We've got some equipment that's on its way out into the Far East as well. So do you see progressive growth in the next three months, six months, twelve months because of the contacts that are being made?

31:01 I know a lot of the contacts take, say, six months, nine months, twelve months to fruition. But there are short term or medium term goals that probably you will have. It doesn't if they're not governmental, they're not big, the completion period from to get an order is much less. There must be a number of those that are coming to fruition or you would hope. That's a fairly small that's a fairly small number. That gestation period is rarely shortcut. Occasionally, you will get something on a two to three month lead time, but predominantly, it will be six months, nine months. What I can say is that we launched this in '22 in Dubai in a show that was fairly lightly attended, but some of our partner network purchased the following April.

31:56 So you can get that, and that's a quick win. But traditionally, you would wait six to nine months. So there's a lot of product placement going on at the moment. So I would say that that will take another six to nine months before you started to see the benefit of that. So in terms of placing products in marketplaces, not just speaking from this industry, twelve months to two years to get a product accepted around the world. It can be not unusual. Right. We're not talking about twelve months from now because some of those Yeah. Some of was already started. Last year. And it's a building process as well because you started year Yeah. Should be Yeah. Yes. Much in time.

32:41 It's not level. Yeah. Indeed. And as we said in release this morning, we're we have seen improved inquiry levels. We've seen improved football exhibitions. We've seen improved levels of demonstration. So we expect fully expect the sales to follow-up from those. Yes. Yeah. Yeah. That that sort of fits with the question that's been asked online. What's the target sales? And and so I suppose to answer your question another way, if you look at the market expectations at the moment for this year, which is '23, the forecast is for £3,000,000 of sales. So it's obviously showing a lift, you know, from from the lows that that we've just reported.

33:27 So there is some traction, but we'd hope, you know, there's further traction after yeah. The product placement in The UK Eve is just here. She she's the lady we we recruited from Westminster. It's gone very well in The UK. So the feedback from The UK installations and I don't wanna say too much about too many installations in The UK because this is an open forum, and the competitors will be listening. It's been good, and we've been getting follow on orders from UK installation.

34:13 And that's as well as the RF, that's police forces in The UK. So is that built into your forecast? Yes. That's 90% chance of 10%. A mix. So I'm trying to get to it because I feel frustrated. I've been in the shareholder for many years as to plateauing this space for a long time. And it's nice to get some more feedback. One of the things about the new directors, you know, about and she made these questions as to what's been happening and why. Very interesting to see that directors are now much shares in the company. What's behind that? It's really getting to the grips of what what the company is actually going for and where our own assurances can be passed on to us through confident predictions or not without not giving commercial information away, but to feel as though we are part of what we're doing. Now, quite frankly, I don't think you've mentioned that relationships with major partners.

35:18 We're a small child, but we still like to know whether our money is gonna be safe. So it's this information that is important to us this week with CarPlots. What's going on? So you're feeling confident that these placed units are going to develop and produce some orders in future? For me, yes. I think just to sort of go back to your point about our confidence within the business. As a board, many of the board invested in the business this year. I did as well because I believe in what we're doing and how we're going about doing it. Absolutely. Yeah. Thank you. And it's not just a demonstration of the shareholding base that we believe in.

36:11 We are doing the right things as far as I can see. We're focusing on areas that we're good at, developing those, trying to maximize those. And we've been very conscientious throughout the business about our costs, our strategic objectives, and we're trying to work on those and getting placement of this product and making sure we get repeat revenue from the British police forces or the RAF is one of the key targets. Sales team here, they are heavily targeted in terms of what we do on a day to day basis, very heavily monitored in terms of our opportunity pipeline, the percentages they're at, and also the competition. It's a very competitive market. We've got a good reputation within that market, but it's competitive.

37:00 And we we and part of bringing out that that latest product here is to fight competition and to accept. We want that new product to be not only protect our market share, but be additive to it as well, which is what we have to do. Thanks,

38:35 Mike. And the WHO, and if people don't get your reports, they can get them, can't they? Or not? No. Okay. But if you talk to me and you're a sophisticated investor, I maybe can help you out there. Yep. And the forecast themselves are also Yeah. Yeah. Okay. Just before maybe I have last question. One other someone's asked online, what's the average value of a customer order? I think what Vince has showed is that we have a range of products. What we're trying to do is fill in the higher value. I think looking at average value is quite commercially sensitive, so it's not really something that we wanna address.

39:25 Suffice to say that the AS one is looking at a higher value product, you know, which is why, you know, we think it's so important. Any last questions in the room before we move on to the formal? No? Okay. Well, thanks, Vince. And thanks everyone for your questions. So let's move on to the formal part of the meeting. So can shareholders present in person and any corporate representatives please raise their hands so that we can see who's in the meeting? Okay. Thank you. Has everyone signed the attendance register?

40:10 That's with Emma. Everyone's in? Yep. Excellent. So I note that there's a quorum of shareholders present. And as you know, today's meeting was called by a notice of AGM dated the 01/18/2023. The notice contains details of the ordinary resolutions, and today's meeting has been called to consider and if thought fit, pass those resolutions. So the actual terms of the resolutions are set out in full in the notice. Unless any member's got any objection, I propose to take the notice as read. Please note that as per the notice, voting on the resolutions proposed at today's meeting will be conducted by way of a poll after all eight resolutions have been proposed to the meeting.

40:59 So the first resolution, an ordinary resolution, is to receive and adopt the financial statements for the year ended 09/30/2022 together with the reports of the directors, including the strategic report and the auditors. Resolution sorry. Resolution two is an ordinary resolution to receive and adopt the room. To do like comments? Don't think so. We? We're gonna I wish I wish to comment at various points. So Do you? Okay. Yeah. That would never happened. Yeah. That would make me Sorry. Yeah. Is you're number one, Eric, number two? I'm number one. Number one. Okay. Accounts. The what I there are a number of stories and some which I'm afraid of. I'd like to draw attention to page 38 where it says cash and cash equivalents end of year.

41:56 And it says load 15, but, Sarah, I think it should be load 14. But I'd quite like to know where we keep our cash, but much more importantly, we go back two years to 2020. We were showing cash at £1,400,000,000, and now it's down to less than 700,000, which means we've lost half the cash. Now it's gone in trading losses. It's gone in building the inventory, and we've gone in r and d. So we've heard comments and explanations for that, which I can understand. Question is, where is it going? So does the board have some concept where it expects the company's cash to be at the end of twenty twenty three?

42:48 Well, I'll start, and then Sarah can talk to the detail. The board has, you know, monthly projections of where the cash is going. You know, we we expect at the end of twenty three to to be assuming we achieve the the forecast are in the market to be ahead of the figure that we ended last year at. You know, we do know cash is king. We don't do anything one of your other sort of things was where do we keep the cash. I think there's nowhere to keep cash that earned you very much interest at all at the moment. I mean, it's not like the old days. No. No. Same here. I mean, you've got it with one or two banks. Just one bank. Do you know the bank? RBS. Yes. And we've been with them for a very long time. Very good relation. Networks. No. RBS.

43:37 Not not NatWest. Something I appreciate they are Does it exist? It does. Yes. Yes. It's a it's a strange relationship, but, yes, they are effectively one and the same, but they are also separate. And we're with RBS, always have been. And we have a very good relationship manager who's been in quite recently, I think, sort of go through where we are and sort of get see what support she can give to us. That's that. And you are saying, chairman, that the board expects cash to be greater at the end of twenty twenty three than it is now. If we achieve sales forecast. Based on the forecast. Absolutely. Yeah. Yes. Yeah. If you missed have you done sensitivity tests to see if it were to drain out, at what point you would need to do something differently?

44:24 Well, it's quite interesting. You're sitting next to the audit partner. And one of the audit tests you have to do nowadays is if you got no more orders after the day you sign the accounts, how long can you keep going? Now I can't remember the position when we did it at the audit, but the position today is as at the end of January, we could still go until the end of December with no more orders. And I think it was roughly the same at the year end. It's it's sort of ten ten ish months. So I e, you don't slash and burn. You keep all your structure. But with the orders you've got in place now and the cash you got today, how long can you keep going? And the answer was ten months. So still do r and d, which means you keep your staff employed in r and d. Yep. Good news. And as far as inventory build is concerned, that would be modified too.

45:16 No. Your inventory, you would you wouldn't buy anything because you're not taking any more orders than the ones you've got. So but effectively, you're not choosing you know, if the orders dropped off a cliff, any business is gonna make all sorts of decisions to conserve cash. But without taking those decisions, ten months was the timeline, which We do want the orders. We don't want to have that position. Yeah. No. Thank you very much. Sorry. Any other questions on resolution one or two? Resolution three is an ordinary resolution and seeks to authorize the reelection of Vince Deery as director of the company. Hang on. We've got another one in here. Resolution two, didn't we? I've I've read that.

46:03 You want me to do it again? Resolution two is an ordinary resolution to receive and adopt the remuneration report contained with the within the annual report for the year ended 09/30/2022. Think right that I should say, chairman, that you and I have talked about that. We communicated on that. Yep. And as you know, I'm going to vote against it, and you know why, but I choose not to explain that in the course of the meeting. I'd rather leave the matter in your hands. Thank you very much. Any other questions on that one? Resolution three is an ordinary resolution and seeks to authorize the reelection of Vince Deery as a director of the company. Vince retires in accordance with the recommendations of The UK corporate governance code, and being eligible, he's offering himself a reelection at this AGM.

46:55 Resolution sorry. Any questions on three? Resolution four deals with my own reelection, and as such, I'll briefly vacate the chair and hand over to Vince. Thank you, Tim. Resolution four is an ordinary resolution and seeks to authorize reelection of Tim Jackson as director of the company. Tim retires in accordance with the recommendations of The UK corporate governance code, and being eligible, he's offering himself a reelection at this annual general meeting. I will now hand the chair back to Tim. Okay. Resolution five is is an ordinary resolution and seeks to authorize the reelection of Sunil Vad Gama as a director of the company. In accordance with the articles of association of the company, he's now required to retire by rotation and being eligible offers himself for election.

47:49 Chairman, I'd like to ask a number of questions of mister Van Garner or Venkama. Being elected for the first time because you were appointed by the board, so you have to come up for elections today. Why do you wanna be a director in this company? I can help on technical side, especially on X-ray side and imaging side, bringing new technologies to help with the design products. It tells us that you can help in a number of technical ways, which which theory has also said, and apparently, that's doing good already, so that's nice to know. But as this shareholder asked it, the answer to his question, it is not, at the moment, actually adding to the company's income.

48:39 As I understand it, it's helping the success of the products in the field and subsequent servicing of them. It doesn't really explain why you want to be a director of the company. What do you think we are going to get as shareholders from your presence on the board? Are we going to get improvement in income and profits? If we develop new products, with my help, we can we'll bring in more profit. I think I can help there. We're here because of RiseTech, which is a major shareholder. That was mentioned in the RNS, which announced your appointment to the board, and it's being confirmed today. Now in 2018, the share price was 7.8 p.

49:27 Today, it's less than 2 p. And that happened because share right right there blocked resolution to issue shares in order to enable the takeover of top research, and the share price has never recovered. I wrote a letter to Rystepp directors, which I think was never actually delivered to them, but I believe some of the points I raised were put to them. I tried to explain that what they had done was counterproductive. And in fact, in my conversations with with Tim, none of you, I think, generally shared, but he suggested that what drives the share price is the interest of private investors. And by action, it frustrated the aspirations of private investors.

50:15 And some of them must have been driven out of the company because if you wouldn't sanction a takeover using a four p share price, and it's now below half that, it's gonna take years and years and years from organic growth, no matter how successful it is, theory and extreme, are to get back to a price at which, on past evidence, rise that we're actually going to accept. Are you going to contribute constructively to RiceTep's understanding of this basic factor? What is your opinion of takeovers for this company? Are you keen to see them? I wasn't aware of what's happened in the past. I was just brought in recently.

51:04 Yeah. So this is about moving forward, isn't it? So as Vince has explained, the, you know, right step after the the incident you talked about became disengaged. So this is about rebuilding the engagement. You know, Vince has has explained effectively how we see that working. As we'll see in a bit when Emma talks about the support for the resolutions whilst voting is anonymous, you'll see by the number of shares that RiseStep are voting in favor. So we, as the board, see that as a very positive indication that RiseStep now are back engaged. No shareholder's necessarily gonna agree with everything the directors want to do, but we believe the direction of travel is that they are supportive of it. They're supportive of, you know, what Vince has presented today.

52:01 Sunil doesn't represent RiseStep. You know, Sunil's bringing his own skills to the board, but it's part of opening that channel. So, you know, we see it as a package that, you know, his technical skills are gonna help the product range and the acceptance in the market and the growth. But, also, it's part of that development of the the relationship with Rivestep who are a key shareholder, just like everyone is a key shareholder, but with 22 something percent, you know, they can do all sorts of things to the positive or negative. So what we're trying to do is make those to the positive now. And, hopefully, you know, if there has been a suppression of the price and interest because of of the history, you know, what today indicates is they are now supportive. There isn't a block on the shares that some people may have perceived, and hopefully that's part of moving, you know, the company forward.

53:04 And we can't determine the share price, can we? None of us can. You know, the market determines the price. All we can do is try and do the right things for the company and for the future. Very good, chairman. And it's pleasing to know that Rice never voted for this resolution that's coming up. It's a very small allocation of shares, so it's a toe in the water. And it doesn't say what the situation would be if we were back with the top research. And while I appreciate your comments, and I'm responding to them, it's mister Bagama who is seeking election. He wants my vote, which is why I'm asking him questions. Yeah. Because although he may not be here representing Ryan's step, although the RNS makes it seem as though he is, he nevertheless knows them because that's why he's here.

53:53 So I'm interested in his continuing your continuing contact, mister Bengal, with Rysted. I want to know how much you understand the need of this company as a small company with slightly more than a single product in the market, which needs other things as part of its, product team for say for sales. Do you understand the needs to have acquisitions and that the board, when it chooses to make one, must be supported, by a shareholder with any 25% because these things are gonna be special resolutions, which will require a 75% majority. With many shareholders in nominee accounts, they won't even be voting. So RiseStep's support for acquisitions is essential.

54:42 And if they are going to stop one, they should say beforehand because we lost a £250,000 on top research because did not make it clear to the directors that it would block the resolution. That's a £250,000. It's a huge sum of money for this company. So I'm asking you Yes. Do you understand the need for acquisition? Yes. Yes. Is that a yes? Yes. I I think you did. And just just if I can, the conversations with have been to make sure that they understand the implications of their historic actions and the view that will be taken by their future actions. And hence, that's why we're seeing the resolutions, all the resolutions being fully backed by.

55:31 They understand the conclusion, and they also understand the the future aspirations of the board in terms of what we want to do in terms of trading as the business we are and some of the more strategic options that are open and talking about acquisitions, etcetera. Okay. Is that can we stop at that? Well, hang on. Okay. It's good to know, but they need to know also that if they do a repeat performance, they won't sync the business as a very good business, but they'll sync it as a public business. Yeah. Yeah. Okay. Hope that that. He's a direct much invested in the company. £1,000 to buy shares is not a huge commitment to the company. I would like to see you investing more in your money. You've got a successful business of your own, and I hope you could give some of that money.

56:22 I've just started, so You've just started. Well, the share price is gonna go up soon. It's period. Okay. Let's move on to resolution six, an ordinary resolution that seeks to appoint BDOLLP as auditors and to authorize the directors to fix their remuneration. Resolution seven's an ordinary resolution and seeks approval that the directors be authorized to allot the company's ordinary shares under section five fifty one of the Companies Act 2006 to the value of a £136,855. And then resolution eight is a special resolution and subject to the passing of resolution seven seeks to approve that the directors be empowered to allot equity securities for cash.

57:11 I now propose sorry. Yeah. It was recently about 4,000,000 shares of money by that fund. Is that part of was that a special deal was it a stock market? There's been no shares issued by the company. Yeah. Just a a buy and a sell between shareholders. Right. They didn't come here before they bought. No. Okay. Sorry. Any other questions? I now propose resolutions the resolutions that Emma is now gonna lead us through all the numbers.

58:00 She's from Neville Registrarles. Sorry, Emma. Thank you. Thank you. So good afternoon, ladies and gentlemen. I am representing Neville Registrarles today, and I am interested in the task of conducting the poll. As has been mentioned, ordinary resolutions one to seven and special resolution eight. Proxy cards have already been circulated to shareholders, and many of you I know have already completed and returned them. And and therefore, please trust in the fact that the chairman of the meeting, all your proxy, will have cast those votes, and they will be included into those polls. I do have here a summary of the scores of those proxy cards received prior to the meeting, and, obviously, those will be the starting point for my counting of votes today. Please note, therefore, if you have already completed and returned your proxy card and do not wish to actually change your vote today, there's no need for you to actually take any further action off the poll. Your votes will already have been counted.

58:58 I am, of course, available to answer any questions you have made regarding the completion of the poll cards. So can I just ask you to raise a hand if you do actually wish to complete a poll card today? Thank you very much. Mister. And what's the chairman do now, Emma?

59:54 So the results actually of the vote will be on on our list. So it'll be an announcement after the meeting meeting. Now. Yeah. So as you can see, I'm not a professional chairman. So so, basically, what's gonna happen now is once people in the room have had the chance to fill in their votes, Emma then has the votes that she's already got and the ones that are gonna be submitted. And they'll be announced to the markets through our regulatory information service and posted on our website as soon as possible, but that's this afternoon. That that'll be this afternoon. Okay. So that concludes the business of the meeting, and I declare the meeting closed at 02:30.

1:00:41 And thank everyone for attending. It's much appreciated that so many of you choose to come out or to listen online. That's appreciated as well. Okay. I declare the meeting closed. Tim, that's great. And thank you, to the board for updating attendees online today. Could I please ask attendees online not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the board can better understand, your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the board of IMAGE SCAN HOLDINGS PLC, we would like to thank you for attending today's annual general meeting. That now concludes today's session. So good afternoon to you all.