Optibiotix Health (LSE:OPTI) — Investor update

0:03 Good afternoon and welcome to the OPTIBIOTIX HEALTH PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question during the meeting itself. Have the company review all questions for today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

0:28 And I'd now like to hand you over to Steven O'Hara, CEO. Good afternoon, sir. Alright. Good afternoon, and good afternoon to to investors. So my name is Steven O'Hara. I'm the founder and CEO of OPTIBIOTIX HEALTH PLC. I'm also the founder of Probiotics HEALTH PLC and of Skin Biotherapeutics, PLC. And what I wanna do today is go through some of the, typical questions that we get from from shareholders. And I hope at the end of this, you'll understand that you've actually built quite lot of value in the in the business. Now I recognize the share price is is low. I recognize that because a bit like you, I'm also a an investor. I'm an investor in a whole range of stocks, which are all down.

1:16 And for every penny that the share price in in OPTIX goes down, I lose over a £100,000. So I've got if anyone's got a skin in this game, it's it's it's me and a requirement to to build the the share price up. We are in a in a in a strange market, and it's quite unusual stock market. But I hope by the time we've gone to this this presentation, you will see that we built real real value. And that's valued not just in the assets that we have in terms of probiotics and skin biotherapeutics. I'll cover probiotics in a bit more detail later on. But that that is a a a growing asset for the company or in skin biotherapeutics, again, a an asset for the company. But also in our first generation products, which were growing quite nicely up until 2022, and we had a poor year.

2:14 And then, let's look at how we recover from that poor year. Now 2022 was a poor year for for many people in the industry. You're probably well aware that about 70% of AIM stocks, sorry, there's a 70% increase in the number of profit warnings on on AIM. And across the industry in terms of probiotics and prebiotics is very much a a poor year. And the question we have to ask ourselves, is that a sign of the future, or was that a temporary blip in in the building the company? And we think it's a temporary blip, and I'll go through the reasons why. So we wanna make sure we get that that, you know, our first generation products back to profitability. And, also, we have to make sure that in terms of our second generation products, so if you like, the the first generation products were the the cake and the and they get us to a position where we have sales of 10 to 20,000,000. So we have a 100,000,000 plus valuation company, and we bring forward our second generation products, sweet products and microbiome modulators to add the ice into the cake. And I just wanna take you through where we are with those and how close we are to commercialization, which is very, very close. And then just give an indication as to the revenue potential for 2026. So as I said earlier, these are all constant questions I get individually or from boards and boards from investors. So I hope you'll find it a a useful presentation.

3:38 It answers some of the the main questions that that investors ask. So just a very quick overview, and this is because in a presentation like this, you have existing investors, but also you have some new investors coming in. Just wanna give a quick overview behind what OPTIBIOTIX HEALTH PLC is. And so it's made up of three companies, if you like. Skin Biotherapeutics, so a skin company that has one product in the market, Axisbiotics, and a ingredient which is licensed to Croda that has a market cap run about 30,000,000. We have a a company called Probiotics Health PLC, which I put on the market last last year on the aquis market, and that has an ingredient called LPLTL and a range of products called colbyome that reduce cholesterol, reduce blood pressure, reduce arterial plaque, and a more general product for cardiovascular health.

4:38 And that's got a market cap quite amazingly of of 6,000,000, and we'll come to reason I I mention that now in a second. Then the market cap of OPTIBIOTIX limited of $99,000,000. So, actually, if you take our our our value from SKIMS about 6,000,000 and our value into the market cap of probiotics, then our market cap is less than the sum values of those two companies. And so within OPTIBIOTIX, we have a range of first generation products that are on the market. These are slim biome, OPTIBIOME, BIOME, lean biome, Optizotz, and Wellbiome. And we've got the second generation sweetbiotics and microbiome modulators that are coming through, shortly, more on that data. I've just gone back to my comment in terms of the value of, probiotic health PLC.

5:25 Just I wanna draw you to this Proby acquisition, which was made in 2021. They acquired a stake in in Bliss, which valued Bliss, a normal health company, haven't really got the clinical studies that probiotics have or don't have graphs or range of other things. But that value, their valuation was 38,000,000 based on their views of 1,900,000. I'm pretty confident based on what happened last year in terms of probiotics that will get to at least exceed £2,000,000 in this in 2023. So if you look at where we are now into the market cap of 6,000,000, and if you look at where we have 2,000,000 sales in 2023, then we should be around about $3,540,000,000.

6:12 It's clearly, very much undervalued. You can even compare the market cap of probiotics to skin biotherapeutics. A big difference in the market cap. And, of course, as I said earlier, you know, we're looking for, you know, somewhere in the region of 2,000,000 for probiotics. It did not 1,400,000 in 2022, and we've got comparison of £75,000 for skin biotherapeutics. So in my and I'm saying that skin biotherapeutics is is is overvalued. I'm making clear that probiotics health is is massively undervalued. And there's a reason for that because we put the company on on an aquis. We gave out a a dividend, and people sold about £300,000 worth of shares in a liquid market, and that brings the share price down. But we need to look at how we how how we recover that.

6:57 So that's sort of a general overview. And if I go to the the next slide, this one show how we try to create value and why this is important. So and there's five key pillars, and and these are so I used to be a director of three m health care. Three m is a 36,000,000,000 turnover company, and I bought and sold a number of parts of of three m. I also used to be a director of an investment group. And whether you're looking at it from the private sector or from the, as a institution investor, these are the key pillars that make the difference. This is what industry values, okay, when you talk to potential partners. So first of all, values are science. You have to have science that works. Okay? That may sound, obvious, but that's not always the case, particularly in terms of ingredients and supplements. Many ingredients and supplements are sold on marketing. So it's important if you did see really substantiate your product that you have good science.

7:57 Next thing you need to have is human studies, but all our products have human studies. Okay? We've got three studies, human studies on our SlimBiome, and we have a number of studies in terms of our sweetbiotics and, of course, in terms of LPLDL. We have a number of studies in terms of LPLDL, three studies. And they're really, really important, and I'll, know, I'll emphasize that how clearly is, and I'll show you the reason for that later. You have to have patents because you have to protect your commercial position. Okay? And, again, we probably over patent. We spend about a £250,000 per year on patents, and we do that because if we were looking to be acquired, your patent is where your your value lies. And particularly in some areas like sweet parties, microbiome motivators, We built a patent portfolio that was actually one of the main reasons that Firminet came in and did a a deal with us because we blocked off their ability to create products that they were looking at. They need to get some industry awards. You need to get the industry saying, yeah, we quite like this this technology.

9:02 We quite like these these products. And that can be in terms of industry awards. More likely, in terms of, you know, looking at the value of the business is looking at who who which companies have actually formed deals with this particular with OPTIBIOTIX. So if you've got key companies, key brands in weight management, key brands in terms of sport nutrition, key brands in terms of, pharmaceuticals for in in case of LPLDL. That gives partners or acquirers or other groups who are looking when you put who look to move past the business onto other markets. That gives you an awful lot of credibility. So these are just a couple of examples, in terms of our publications. Okay? So we have lots of publications on Slim Biomes. On the left hand side are peer reviewed publications.

9:53 In the center here are are our publications that are presented as abstracts and as papers and as posters in various conferences. And this is quite important because it when you go to a partner, pick a large part large part like in Nestle Asia, Abbott Nutrition's, you know, DuPont, etcetera, you go through a process of getting validity from their research teams in the first instance. So if you've met and presented with them by beside the those research teams, you've got a credibility already. So it gets you one step ahead. It shortens that particular process, which is a long process anyhow. But there's a a another reason. And so you have to have the science and the studies to get health claims. Let me tell you what I mean by that and why it's so important. So you realize earlier on the year that we submitted a, a red liquid claim in Australia, New Zealand called for ZANS. That's their red liquid body.

10:53 Okay? And that allows you, to make unique health claims for your product. So it allows you on the OptiSlim products to say you can use for weight management. K? It allows you to say you can see these things here. It can reduce hunger. It can reduce cravings as a patented ingredient. And more recently, we've got claims to say reduce hunger, reduce cravings, and improve the gut microbiome. So these are claims that go onto the boxes, okay, and go on to the website. That means that when a a customer comes across them in the pharmacies and these are sold in pharmacies or now, with OPTIX who are, Australian distributor through Maxim, sold online, you can get across the benefits to the, to the customer. If you haven't got this science, okay, and you can't get a a, regulatory approval for a health claim, you have to use things like OPTIBIOTIX, very well known, and probiotic.

11:44 It just says, digestive supplement, okay, and friendly bacterial. Or if you take Axisbiotics, which is the skin supplement, it just says food supplement, okay, and it has 4,000,000,000 bacteria. So you can't say, you know, reduces, eczema or improves psoriasis or improves skin conditions. That's why the clinical studies are so critical. Okay? And the science is so critical. So that when you build a business, you have to build it on these particular foundations. You can't take shortcuts. Okay? These are just our award, which are quite important for for for most companies, particularly in Asia, but maybe not not for all. Okay? And finally, mentioned about the these these partners. So having these partners, you know, people like Firmec, people like distributor partners like Walmart, the HEALTH Group, in India, Holland and Barrett, they all give us credibility with partners. You leverage that credibility with other partners. Okay? So I mentioned this because, you know, whenever you take a a product to to market, you have to look at the longer term, and the longer term is building the the company in terms of, up on the on the stock market, but also potential for a a trade sale, which I've done a number of occasions. K?

12:57 So just to sort of step back a bit, and so what I hope I've to you is we build a lot of value in in the company. Okay? And this value is recognized by the, by the industry. Okay? And just to step back and just put that into context. So the the strategy was the PLC, this is the top part of the company to be able to technology. So it raises funds. It's built to technology. It builds the divisions. Okay? So initial divisions of skinbiotics, probiotics, and prebiotics. Then when you get an active element of science to a point where they can be commercialized, When they're commercialized, the commonalities there's there's a commonality in science, but there's not a commonality in terms of channels to market. So the channel to market for a probiotic, for example, is via a supplement.

13:45 The, channel to market for a prebiotic is via an ingredient. You're speaking to different people. So you're definitely efforts there, and that's why we take them into separate separate companies. Just a couple other things just to bring out. What gives us as a as a business is multiple positions in the microbiome space. We are recognized as one of the very few companies in the world that have multiple positions in the microbiome space. And that gives us an element of risk reduction, but also means that those assets as we grow, we can sell off various parts of those assets for various purposes. We only have raised 8,800,000 worth of funds. And if you take other companies on the stock market, if you take seed, they've raised over 50,000,000. If you take, other companies in this area and some of you aware of that into the 40 pharma, 230,250,000,000, although they very much were in an area which is pharmaceutical to make the right decision not to go in that particular route.

14:42 So we haven't raised a great deal of of funds, and, we've got, I think, a reasonable return for that. Couple of things to bring out. Now probiotics, PPS, is a really valuable asset. Okay? As I said earlier, it is undervalued on the stock market for reasons I said. We gave a a division a a, a dividend in SPECIA. We wanted to do that to benefit our shareholders. A couple of shareholders sold because they saw, that, they wanted to get income in. I can fully understand that as everyone's right. Actually, share price down, but that's got a lot of value. That's got more value than the 6,000,000. That's worth currently, in my view, 35 to 40,000,000, and we will achieve that. Okay? I have no doubt we'll achieve that. And it certainly, has got a high potential uplift in a market that has got lots of M and A activity. Okay?

15:32 And as I mentioned earlier, it's got 20 times more sales than from Skin Biotherapeutics, one fifth the value. As And I also touched on, I don't think that's because Skin Biotherapeutics is undervalued. I think it's because sorry. It's overvalued. I think it's because probiotics is is under undervalued. So and and that is recognized by by by the industry, and we get a fair bit of interest in this particular area. And what we then have to do is say, okay. If it's undervalue currently, how do you extract that value? And part of reason that it's undervalued is because we've got a more liquid market or we have to look at the trade sale when the time is right. Okay? Our focus for this year is building a pro pro probiotics and getting sales 2,000,000 plus. Okay? And I think we'll achieve that.

16:20 And then go to the commercial strategy, and most of you know this. So the idea was to build a first generation products, get to position where initially we sell b to b, that's business to business. We sell ingredient. We then start to build our own brands, then we start selling those direct to to customers. And and what we've achieved in 2020 and 2021 was profitability in both the prebiotics and probiotics parts of the business in 2022, all went down that downhill. So our focus now is on return to profitability in 2023, and that's our our focus. And there's a a range of ways we can achieve that. Okay? We'll make a lot of progress in that area. And then I know a lot of people thought, well, okay. We're interested in in in, slim balance. It's a good product, but, you know, never be a a a big seller.

17:06 Well, I think it will be $1,020,000,000, as as we go forward across the first generation. But I also recognize that people are are very much interested in second generation, and we're getting there. Okay? Do you remember when I acquired Skinbiotics, okay, in 2017, that had five years of, really good research behind it from professor Catherine Neil. So I acquired it for research already. What I had to do with and that it was a technology was there. What I had to do with sweet particles and our microbiome modulators was create the technology, prove the technology with the the publications and with the the human studies and then get a partner. And so we've actually done that since sort of two thousand and eighteen, nineteen. So whilst investors may think that it's taking a long time, it's fairly normal. In fact, people will look at this as quite making quite good progress in an area that is so complex. This is new science and it's new technology creating new science. And we're we're in the final steps now for a commercial launch in late twenty twenty three or 2024, and I'll kill that in more detail later.

18:15 Just so it's all very well happening in strategy, but you gotta ask, is this strategy working? I just wanna use this as a you know, this is the the financials. Okay? And it's important to to recognize it, you know, in the context of where we are today and where we come from. So if you look at the percentage change year on year, okay, and the numbers, I broke these down to pre probiotics. Okay? You can see that year on year. So in terms of probiotics, we're at a 151% increase on the preceding year. Probiotics have been seven percent. The PLC, eight point three percent. And, again, in 2021, remember, COVID starts in 2020, start to get a little bit of impact in terms of COVID, but we still grew quite quite rapidly, double digit growth in 2021. And each year, in 2020 and 2021, probiotics and prebiotics were profitable. Okay? Only just but but profitable. So we got to position where we built the business up. People were buying product, and it and it was was was profitable.

19:12 And we also built a, a number of assets, and you can see here in terms of the asset value of, of a skin biotherapeutics in particular have an impact in terms of the profitability of the group. And and that's really more a balance sheet profit as opposed to a a revenue profit. Okay? And we're able to then derive some income, which we did in particular in terms of 2020. I think we sold a I can't remember a number of of skin shares so we can drive some some revenue from the sale of skin shares, which shows that it's a tangible asset that can we can bring value from. Okay? So then so I think the you know, it looks to me as if it was working pre, 2022.

19:59 And the other way of looking at it is, okay. Let's look at our partners, okay, and see how they're performing over the last few years. And what I've done here is quite a complex on the slide, but I'm a go through it reasonably slowly. On the left hand side, you've got the number of metric tons, okay, of product. And then I'll go through each of these in terms of the forecast and the actuals. I'm a start here with The UK retailer. Okay? So this is, Holland and and Barrett, and this is the number of metric tons that they they they forecast and what they ordered. Okay? For 2020, they forecast nine metric tons. Okay? And just so you're aware, we get forecasts from all our, our partners, and we link those into exclusivity. They don't meet those forecasts, but we remove exclusivity or we give them customer protection.

20:47 That's for all our our our partners. So they forecast nine metric tons in 2020. They actually achieved nine metric tons. In, 2021, they forecast 20, sorry, 21 metric tons. They actually made 20, metric tons. So up to 2021, they're more or less on on track in terms of forecast. In 2022, they forecast 30 metric tons, but we got nothing. Okay? That's the impact of of of of COVID in in Ukraine. Let's go to our Australian distributor. So we sell to Maxim. We sell on then to OPTIX HEALTH So, again, just take you through in terms of asking the question, are our partners living on their on their forecast? And we think they are up into 2020, end of twenty twenty one. So what did they, forecast? They forecast 15 metric tons. And just so you know, typically, a metric ton is sold for about one metric ton is sold about 30,000 pounds, somewhere in that region. Okay? You do get a bit of variation because when you get a very high volume, we give a discount. We give a discount for some early adopters, but around about 25 to to 30 pounds per metric ton. Okay? So they forecast 50 metric tons. Well, look. They actually achieved 20 metric tons. In 2021, they forecast 30, and they achieved 28.

22:06 In, 2022, they forecast 80, and they achieved nothing. Okay? So these were the problems that we had in 2022. This I'd I'd sort of point out to you, if we're keeping to this forecast, okay, so this Australian distributor, this is behind what we're saying a number of years or so ago, they had a forecast for 2023 of 130 metric tons. And certainly before COVID and before, Ukraine, they're on track to meet that. So a 130 metric tons at 30 pounds per per metric ton, roundabout 39 3,900,000 pounds. So you can see, that's where we're going. Okay? And just to remind you, up until that period of point until 2022, all we had was those two, those two partners.

22:52 We had, the head group, this is sports group here, and they gave us a forecast in 2022. That's when they they first started to to build the business. And they gave us a forecast of seven tons. Ukraine came along. The price of whey protein tripled. They decided not to launch so many, products and in so many areas, so they actually achieved naught point five. And, again, their forecast for 2023 was 33 metric tons. So what I talked previous about what we're looking for with these partners, given us revenues around about a million pounds per year plus, That's what I was talking about in terms of the forecast. And we were on that way to achieve that in 2020 and 2021, but 2022 came along. What we're do now is get back to that particular forecast.

23:38 Then the Indian Pharmacy, again, that was that's Apollo. So we struck the deal in in 2022, and they're due to launch early in 2022, again, because what happened in Ukraine and in in terms of the environment. They give a forecast of 12, of 12 tons. Sorry. This is 12,000 boxes as a per and they achieved 16,000. But but but then, we're looking into terms of 2023. And the same for the GOLTH PLC. This is, this is Nadia. Again, that's in in thousands of pounds as opposed to metric tons. What I'm trying to get across here is that in terms of the business that we had a limited number of partners in '21 2020, 2021, and it would grow in their sales.

24:24 Everything dropped off in 2022, which where we had the problem. We've now brought on those partners, new partners in 2022 in terms of Apollo, in terms of, Nadi, and in terms of the head group. So we have to now do is get these partners back to those particular, forecast, which is what we're looking to do. And we're making a lot of progress on on that. I hope I've explained that well enough. It's quite a complex slide, but the key point is, that our partners were performing to forecast before 2022. Okay? And just to sort of bring this out in a bit more more detail. So the challenge we had, right, was 2021. We finished 2021 on a real high.

25:10 Post COVID, people started to really get interested again in in in weight management, and and really start to build stock levels. So in q four twenty twenty one, we sold just under £500,000 worth of products, and people built up stock levels because people come up with COVID, real growth. Also, in a to an extent, was a concern of supply chain because that starts being very, very expensive. So they built in stock to, to, reduce the risk of, of of the rising cost in terms of transport. So so so the problem we ever had going forward was that we had the global economic crisis in 2022 with Ukraine. People then started to use their marketing. They didn't launch many products. They didn't expand the territories that they plan to, expand into. So we ended that in 2022 with 30 metric tons of of stock. K? Help with these partners. So they are selling this stock, but they but they are and they're reducing that stock over 2022 and in 2023.

26:13 Perhaps the challenge we faced in 2022. But what we believe is that given the history of these partners, we believe the challenges that they they had, okay, in 2022 are temporary, and we think we'll we'll recover, and we've certainly seen that recovery now, subject to no further deterioration in the COVID economy. So look. You have a problem. You deal with it. Okay? And so how are we dealing with it? Okay? And I don't wanna dwell on the past. 2022 was crap. It was crap all all around for many, many companies, not just in terms of the stock market, but also in terms of, sales across the board, as I mentioned earlier. So the first thing we have to do is to turn to a sales focus. I think also in 2022, had too much development focus looking towards the future too much.

27:00 And as I sort of alluded to earlier, we have to either get our partners performing to forecast, k, or remove them, k, or bring in other partners in addition. Okay? If we do that, we'll get to a baseline by 2025 of just existing partners only of roundabout three to 5,000,000. Okay? Then because we can't rely on just those if you think of it, we just had those, two partners, and the third one came in 2023. So 86% of our sales are from three partners. Okay? You can't have that. We need to broaden our partner base because we're exposed to, a high level of risk. If partners decide to delay you stocking, then we have a problem. So we want to increase our partners, particularly in The US and Asia, where you have higher value in terms of the the overall.

27:47 So, technically, in Europe, you're looking at Australia, New Zealand, size of the market. You're looking for the bigger companies to maybe do $12,000,000 per per year. In The US and Asia, you're looking at 10,000,000 maybe and 5 to 10,000,000. So it's it's a much bigger bigger market. So we're gonna have to increase our channels to market. And by that, it's not just weight management. It's sport attrition. It's healthy aging. The reason we do that is reduce dependency on the cyclic weight magic market. It tends to get peaks and troughs. The start of the year and the middle of the year as people get over Christmas, want to lose weight, and wanna get beach ready for for the summer. Of course, just to remind you, in 2020 and 2021, all those markets collapsed. Although we still made good sales, relative to other people, it did impact in terms of our our our growth. But mitigating that risk by expanding into other areas like sports nutrition and healthy aging, I think, is a is a good opportunity.

28:46 And also there's quite lot of interest in those areas and quite a lot of good science coming through on the microbiome in sport and healthy aging. Extend our range, and you'll see more of those on the, on the website as we go forward. And we have to invest in online direct consumer sales because in the past, as I've said in this bullet point, you know, we had a revenue dependency on three partners. 80% of our sales was from three partners. We need to reduce that, dependency by building up our own direct to consumer sales. This requires an investment, which we've done. I'll come to the the next slide. I'll show how we're progressing this. But it also means we sell at a higher price because we sell on the pharma product at a higher margin because we got the ingredient margin and the product margin than if we sell into sell an ingredient alone.

29:33 And then, look, we're in a real world here. We're we if we're not getting the sales that we expect in 2022, then we have to reduce our costs. So and this is amazing. All our directors took a 20% pay cut in January. Okay? They all volunteered to take a pay cut. So that cut was introduced in January. Okay? We moved our joint broker, which was, at. Renee, who was the CEO of the prebiotic division, came in in, 2021 halfway through and in, sorry, 2021 and 2022. So half year 2021 and full year 2022. And we'll be reducing the number of non executive directors from four to two at the AGM. So when the, NEEDs come up for renewal, we won't replace into the NEED. And that's all about reducing our cost because what we have to focus on is getting back to profitability.

30:23 Right? Forget all of that. We've got to sell more. We've got to reduce our cost. That's what I want you how you build a business. Okay? If we do that, we'll be based on position. And, critically, it's got to materialize the commercial opportunity in our second generation products. Okay. So how are doing? Right? Let's give an update first of all on our first generation products, then I'll cover off our second generation products. Okay? So this is saying, okay. 2022 was a crap year. It was crap in the first part of it. It improved in the second part of it, but we never recovered the the losses in the in the first part of it. Okay? So it's like night and day. You know, the 2022 and 2023 is night and day. We are, you know, still struggling to cover it up to clear all that stock, but we're getting there, each each month. So how are we getting there? Okay? And this looks back to some of the plans that I outlined earlier, which I think I I touched on back in November, December 2022.

31:17 We've got our build up product rates and territories. And OPTIFARM, look at OPTIFARM. Okay? They've been used a wider range, OPTIBIOTIVE OPTIVIEGAN range, and they've got a ready meal sachet. So this is a sachet with girls and veggie meals, and that will be launched shortly. OPTIBIOTIVEEGAN range is ready to launch. So they've really put a lot of time left into that. And they've also launched a a a website. So they put about 100,000 US dollars, about £50,000 per month into marketing our product. So that's really starting to look. Whereas in 2022, they did no marketing at all. Okay? Extended the product range with Nardi. This is our go partner, and that's ongoing. Extended the shops and online prep for the Apollo Hospitals. K? So Apollo Hospitals launched in September 2021.

32:04 They this is in a number of stores. They've launched in a couple weeks or so ago, May 16, on Amazon, and they'll be launching shortly on Flipkart. So these are, online, routes within within India. They doubled the number of stores over the last couple of months, but even for a thousand stores by the end of the year, and they doubled sales in April 2023 on the preceding month. Okay? So we're really starting to motor now, and we expect more orders from Apollo, in the maybe the first half of this year and certainly second half of the year. We've extended the channel for sports nutrition and healthy aging. We launched LeanBind with the the head group with confirmed launches from a a new and this is new news too. Okay? I'll I'll comment on it in a a bit more later. So we've got a US partner who's also confirmed a a a launch in The US.

32:59 So just to remind people, when you're dealing with large retail partners, bit like Homer Barrett, they work through manufacturers who manufacture the product for them. And then once that the manufacturer has a product ready, we tend to sign the agreement. So often, you get the order going to the manufacturer and the order going to manufacture to us before we sign the agreement. I can only release the, the news as well once you've got the signed agreement with a partner. But I can tell you that we've got a, a confirmed launch from a new leading sport efficient partner. And they're similar, if not bigger, than than the head group. So that's looking pretty good. Okay? And we know we were we launched well by them in 2020, a couple months well, a month or so ago. K? Ecommerce.

33:45 We did a lot of investment in in ecommerce. That's our own site. We're now on T Mounts. We sell them to China. We we gave them, as an example, about 600 big bags of of of the gummies a short while ago. They sold out. So they'll be stocking on that. So in two weeks, we're on we're getting some really good sales from them now and growing quickly. We're on Amazon UK or Walmart USA is now live. And what I've done, I focused on insulin biomedical. Okay? Because there's been an interest in appetite suppressant due to a number of the new obesity drugs. Okay? And so I picked up that because that's very much in in vogue, and we started to focus more on biomedical because that's more unique in the marketplace.

34:30 We've got an Amazon Germany, Amazon Belgium, Amazon in The Netherlands in the next month or so. I think it was our highest, ever online sales. Okay? And that's increased 1200% in just over six months. So we're really starting to get up to our in ecommerce. Okay? And, actually, there's a sense of control over our own destiny. It does require a lot of investment upfront, but now starts to return that investment, and, that part of the business was profitable in in April. I'm expanding our our our offerings with when buying an Amazon online whereby we're on online Amazon in Maine. But we always have to bring in new customers. Remember what I said earlier? So let's see what we got to. Okay? We've got purchase orders from two from three new US, customers.

35:16 Okay? Two have gone through their, through their contract manufacturers, and one has just placed the the order over the last day or so. Okay? So that's really starting to look quite nice. Now some of these partners, I just communication as to the the scale of these. One of them, if what they say, materializes, you're looking at about the the requirements for 3,000,000 product. Okay? 3,000,000 units, so they have a a product. That will give us roundabout £3,500,000. Okay? Now what happened immediately? So just to take you through what happens generally speaking, people, the the customer, the partner, whether it's Hobbit, the group, they'll launch a limited range of Nardi, whoever. They'll launch a limited range of products, initially, a limited range of stores. If it's stuck, they'll learn from that, then they'll start to expand the number of stores, expand the number of, of, of products on on those stores, that's how you build up. And that will normally happen over six to twelve month period. So we've got some really nice, new US customers, which I hope we have to announce something substantive on over the next month or two.

36:23 But the the process in terms of orders from their manufacturers, order of product manufacturers, that's already been initiated. Okay? And we've got three customers in the Asia Pacific region. So these are all new customers in in Asia Pacific in places like Indonesia, in terms of Malaysia, in terms of other parts of of Asia who have signed agreements and a purchase product. Okay? So as well as sign agreement, what I'm putting in now to all the agreements is that if you sign the agreement, once you make the first purchase order within three months. Okay? We've got a newer customer in India, and we've got a major international corporate looking for launch in India in h two. I think that's probably got a 75% chance of a a come to fruition in h two. I'd like to think it's more because everything's going well with them. But, you know, with large corporates, things change in a matter of weeks. So if you take that in terms of our first generation projects, that's starting to look quite interesting now. We're getting so just to recap, what we're trying to do is get our existing partners back on track, existing products, selling to more territories, and selling more products, selling to new customers and also investing more online to grow our online store.

37:37 This is quite interesting. This is an online store. This is a just to show you the percentage growth. Okay? So we started to invest in October 2022, and this is the growth since then. Okay? So it's grown 1200%. And what's that mean? So as an example, that that was 60% of our our, our online sales are now slimmedical. Okay? So in October, we're selling 25 boxes of slimmedical per month. Now we're selling 340, okay, in April. That's growing month on month. So we get hopefully, by the end of the year, we get to a thousand per month. You can have a look at what that what that means in terms of price of slim biomedicine and biomedical and to yield extrapolation. And more importantly, you have to be careful in terms of the in in terms of, online. You don't exceed the marketing, and so you spend a lot of money on marketing, don't make return.

38:27 That area was profitable in April 2023. So make a lot of progress in our ecommerce store. And we have got a great guy. I met him at the last IMC presentation. Very enthusiastic, and we'll make a big difference. Okay? Just I just wanna finish off now. We've got a couple of slides before we finish off. So we've got about, twenty minutes. And what I wanna do is finish off in ten minutes and then take, take questions. So this is an area which people always ask me on. Okay? This is the no. This is what this is the icing on the cake. This is where it will really make a a big difference in terms of the, your your mine investment. Okay? So what is sweetbiotics? It's it's it's a a range of products. Okay? It's not a single product. We have about half a dozen, probably seven to eight actually if you look at it in terms of some parts of the of each of those products, which are fibers, which is sweet. Okay? And it's a a technology that reads about, but no one else has got. It's all patented, so it includes it. And I said earlier, that's part of the reason why came to us. Commercially, we have two partners. I'll just give you a quick update in terms of where we are. There's an update in terms of where we are from October, November last year with the last presentation.

39:34 We actually had products coming through to us. So our US partner has actually produced a product. Okay? They manufactured it to to to high scale. Okay? They've optimized the manufacturing process. Received that as a liquid in December 2022, and recently received it as a freeze dried product. The liquid is obviously it would give you the taste profile, but you don't wanna be transporting liquid around. You want to be putting into a powder. Ideally, we can crystallize it. We just have to be careful that when you freeze dry it or you crystallize it, or it either the cryoprecivitives, you don't impact upon the taste. So our partner has done some taste testing, and they've confirmed that every product is acceptable. We're now going through a lot more detailed analytical testing and structure analysis.

40:19 Why do we do that? Okay? So we have to look at this structure because we want to know that it's novel. Okay? Because if it's novel, that allows us to protect it, we don't want it to be too novel whereby the regulatory pathway will be a novel food. Okay? So we're just trying to work the structure such that we have some ability to change the structure, without changing this weakness whereby we can build an IP portfolio around it to make sure it's protected, but also not create a novel food. It's a bit like having a a house and you create a new house, but you're making it unique because you're putting in, I don't know, new types of windows or putting in, know, solar panel. And so it's different for everybody else, but it's not so different that people regard it as as as so novel.

41:04 It has to go through a a different regulated process. We've got a number of publications, and a really good one was published recently which talked about which confirmed that the product has sweetness and prebiotic functionality. So it works in terms of health benefit. Why is that important? Remember what we said earlier? It's important for partners, but it's also important in terms of of marketing. And this is independent research carried out by people, not people who have a vested interest in saying this is sweet, and it's got pre product functionality like ourselves and our partners. Okay? So that gives investors and partners really good, good level of comfort. So that's progressing quite nicely. Okay? And we'll have some data to feedback on that over the next month or so. That's close to close to launch. Second agreement was Furnace. Okay? We signed this in July. We started Motrin in October, November with them.

41:55 We signed the manufacturing agreement, and, really, they progressed in the last sort of six months or so properly and more or less caught up or not far off where we are with the US partner. Okay? They've scaled up. They produced a product. They tested it, and it tastes fine. And they're now trying to optimize it to make sure we can enhance the yield. The yield count is about 50%. You really wanna get about but that came from 5%, okay, from the lab scale, five to 50%. Really want it on about 75% to make it cost effective. So they're trying to process optimize the process, and that will go through over the next couple of months or so. So that's looking really, really quite exciting. So what's the next steps? Okay. The next steps, I have a both of these products. Wanna do the structural function analysis. Wanna go through regulatory approval process. And as I said earlier, we wanna make sure the structure is fine, so it's not too novel. That creates a prob a a a longer time period for regulatory approval.

42:52 And we want to we we need to be working or we are working with partners on application development in parallel. So we've been doing that for the last year or so, but we just need to make sure before any work with them that, you know, we're okay in terms of the freeze dried product, and our structure is is fine in terms of a a novel food. So we are close to, to, to launch on on that. Okay? I I just wanna go to the next one, okay, which is, our microbiome modulators. And everyone talks about sweetbiotics, but this is even in even more exciting in in some respects. It's even more exciting because, you know, think about the microbiome. Everyone's got microbiome. Then you think, well, okay. Well, if you got a microbiome, we think it's important. How do we change the microbiome? How do you how do you modify it? So if we think a particular group of bacteria are important, we grow those bacteria, and that's what we got here. Okay? We got the ability to precision engineer food to enhance the growth of particular bacteria.

43:53 And so this is quite unique. Okay? And it's also unique in terms of we can create prebiotics. So we can combine a prebiotic with a probiotic, which will really grow enhance the growth of existing probiotic. So it's what called the called a symbiotic. That is very trendy at this moment in time. We get a lot of interest in this. We first raised this in, November of last year and already got a a partner who's progressing at a pace. Lots of patterns, etcetera etcetera. But this is really quite an interesting product. Just wanted to tell you where we are in terms of the development status. Okay? So, again, let's just step step back a little bit. So I've talked about sweet partners, about our first generation products. I've talked about I've talked about our second generation products about where we're bringing value. Okay?

44:42 And these are all value enhancing steps. Okay? So what we've done in terms of microbiome multivators. I've told you until the SweetBartics. We've been able to improve the science. We've got, independent analysis of of the SweetBartics by, by research groups. They've shown that as sweet. We've shown this had functionality. Our partners manufactured it. They're happy with the taste. It's about commercializing. That has real value. Okay? And, again, on this side, where are we? It's the gain of reading about about enhancing step. What we've done, okay, we we've actually created a a technique which is unique. K? No one else has got it. Okay? Where we've got reverse enzyme where we've actually been able to create a take part of genome within a bacteria and get that part of the genome to create a an enzyme. That enzyme creates a prebiotic, and that prebiotic then feeds a a bacteria.

45:38 And when it feeds that bacteria bacteria amongst all the other bacteria within the within the gut, increases numbers. Interesting. Okay? Increases the blood cell activity. Very interesting. Increases the microbes' health effect. So imagine you're a company who sells a probiotic. You've now got the ability to enhance the probiotic's health effect. That's what we've proven. Okay? So this is not what we think you can do. That's what we've proven. Okay? This is substantive. Okay? We've got the IP, and we've got the manufacturing process, upscaled in 2022. Again, we're going with a similar process. We're looking at the structure and function, to determine novelty. We don't think that will be an issue. We think, sweetbiotics, you probably got a 40% chance that you'll have something in our favor in terms of novelty.

46:26 With this, we've created a a product, which is a a prebiotic, which is a fiber. Okay? And we can change. So in terms of fiber, it has to have a particular structure, and we created it as a fiber and it's part of a group called which have a particular which are well known to any industry. So we don't think there'll be any issue there. That means the regulatory path for microbiome modulators will be much shorter. Okay? It might still be short for sweet baritics. We don't know at this moment in time until we determine the structure. We may have to modify the structure to, to to shorten the regulatory pathway. Commercially, I mentioned previously that we went supply side west in November, met up with US corporates, a 16,000,000,000 turnover, corporate.

47:11 I had some really good discussions with them, expressed a lot of interest, and we followed that up with their discussions in in May of this year. Perhaps The US recently, had a discussion with their r and d team, their commercial team, and that's looking quite strong. So I hope we'll have something in the next couple of months on that. So it's whether we launch with them, or we launch with or go to a partner team with them. We try to do something ourselves. Okay? And that's what works at this moment in time. But this is really starting to move forward. And just sort of to capture all of this, what we've got is we've got the ability, and I'll just say this, and you should read it and read it through time and time again to get the the the importance of this, we can create unique enzymes from individual microbial species, which can generate prebiotics that enhance the growth and health effect of a microbial species.

48:02 And that's unique to us. We can apply that to the gut microbiome or the skin microbiome. Okay? We think that's really, really valuable, and we think this is close to commercialization. Okay. What does this all mean? Everyone talks about numbers. Okay? And so I just wanna finish off with a a view of the future. Okay? And just to be absolutely open with you, when we speak to our our partners, they say, look, Steve. We can give you a forecast percent reliable because we don't know the it's too volatile. We don't know weight protein's coming down now. We don't know what's gonna happen in the future. We don't know what's gonna happen in terms of global environment. So give us a couple more months until we we see what happens. We give you an actual forecast. When they give me a forecast, I can give the the market a forecast. But it's difficult for you to work in the dark. So trying to give you an idea of where we think the revenue potential will will will be. And a number of assumptions, which you can read yourself, but it's really about, you nothing really major happens going forward because as you saw earlier in 2022, a big impact in terms of the the global global economy impact upon us. Do we think that investment in ecommerce continue to grow? Yep. We think it it will happen.

49:09 Do we think our partners return to forecast? We think it they will. We don't know if it will take six months, nine months, twelve months, or eighteen months. Do we think we'll have a a launch of SPEAKBOTIX micron motivators in 2023? We think probably we'll have a soft launch in 2023. Will the main launch in 2024? So that's what all this is based on. We don't think we'll have a much of a contribution from OPTIX HEALTH, but we think we'll have at least, three new US partners. And I told you earlier about their forecast. I halved those. That's what this is based on. Okay? So what we think we'll have then, okay, is, we'll start to really recover in '22. This is this is where we're doing nicely, first of all, in 2021. Dropped off in 2022. Okay? Haven't got the actual precise numbers for that because we got a a new, auditor in, and they're going through those numbers. They'll be out in the next couple of weeks. 2023, really start to recover and get beyond 2021, and 2024 really starts to grow. And by the time it comes to 2026, we should be round about the 10,000,000 plus.

50:12 Okay? It may be more, maybe less than that. It may be a year earlier, maybe a year later. As I said earlier, if you look at, our, Australian partner, if they go back to the 130 tens, that's 3,900,000. I hampered that in there at 3,900,000. I put about 1,500,000. So, you know, I I'm trying to be cautious because it's so uncertain. But that gives you an idea that if we do if we got a number of things going our way, if the economy, comes back to to normal, if our partners deliver as they were in 2020 not sorry, 2020, 2021, I think we've got some good opportunities here both in terms of our first generation and also in terms of our our second generation.

50:57 That, of course, is is, you know, not not forgetting about the value enhancements we'll get from probiotics. So I hope you found that, that useful. I've tried to answer the broader questions that I get asked on a regular basis from, from investors. I try to give you an indication that, okay. We're doing well. 2022, like, lots of, companies didn't go so well, but we think that was a a temporary, blip. And we're starting to recover, and we're starting to see real momentum now from existing partners, new partners, and real growth. If we get that right, particularly in terms of ecommerce, if we get that right, and we get our second generation products, out in, you know, in 2023 or 2024, probably soft launch, I say, in 2023, we'll be in a pretty good position. So thank you very much for listening. I'll pass you back now to, IMC.

51:48 Steven, thank you very much for presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab, which is situated on the top right hand corner of your screen. But just while Stephen takes a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Steven, as you can see, received a number of questions throughout today's presentation. And if I could just ask you to read out those questions and give responses where it's appropriate to do so, what I'll do is I'll pick up from you at the end. Sure. So a couple of questions here. If I start with the first one, now that we to be formulated well by our product is available in the online store, with a clinical study with the University of HEAL mentioned July 2022 commercial scientific update for end of twenty twenty two, the first quarter when we go ahead.

52:34 And if so, when? So let's go ahead. So just to remind you, we're approached by the University of of HEAL. They have a a good clinical unit, and they're looking at at whether prebiotic can influence the recovery rate, postoperatively. Can we reduce the time spent in ICU? We sold them a from WellBio, earlier in the year. They've gone through ethics, and now they're engaging people within the within the study. So that's looking quite, quite interesting. So that's progressing as we, as we anticipated. K? Number 18. 18. I think the microbiome I might have to paraphrase this because this is not a question. It's a an essay. It talks really about the microbiome being interested and the potential to, commercialize, and talks about SweetBartix being on the cusp and looking for an update. And, of course, I've given that update. But just to note, I get this a lot. Okay? And this is people not understanding the complexity of the of the science. And and, know, we are creating new science, and it doesn't go in a straight line. It's a iffy process.

53:44 But as I said to you in a presentation, we've broken the back of this. Okay? We've been able to, develop the science, prove the science. We've been able to show that our sweetbiotics are sweet and they have a prebiotic effect. That's been proven by us and by independent researchers. Okay? And we've also been able to manufacture it with our our our partners, and now it's about commercializing. Okay? And this is not a a short process. This is complex. You're not producing widgets. You're producing something which is quite unique out there. Okay? And now you saw I often use an example. Know, people appreciate how long it took to get, the battery, cars, as opposed to to petrol and diesel. It takes time, but I think we cracked most of it. Now it's about commercialization.

54:35 K? Okay. Okay. This is quite a nice one, actually. Stick why so she's saying, look. I like our products. They work really, really well, especially weight loss offerings. They work for me. What I'd like to to know is why we're not using sweet box on our own products. Okay? Alright. You've actually picked up quite a good point. We'll probably use sweet box on our own products first before they're used by a partner. I talked about a potential soft launch, because provided I can make make sure that it's, not a novel food. So in other words, we gain regulatory approval, and there's different regulations in Europe and, in The US. We're probably launching our own products first. We can test it and get people's feedback and moderate it in terms of the amount accordingly. And that's what we try to do. So a good example is WellBiome. We launch our own website first of all, get feedback.

55:27 And then and what I'd ask people to do, if you haven't bought WellBiome, please buy it and feedback on either Amazon or via our own website. Ideally, Amazon, because it helps us get up to, get up get up the, the ranking. So, yeah, that's part of our plan. So well spotted there. Okay. A lot of press recently about the cost of obesity to NHS. What approach is OPTIX made to the NHS about promoting useless limb biome? If not, why not? Look. This is a question which I've got a lot of expertise in. If you want to take a a product and put it into the NHS, and I brought products into NHS, you'd attracted to NHS, you're at years. And if you give it to the NHS, then it was and I've met I've discussed this many times with investors at these sort of forums that will impact on our ability, to commercialize the product, within The UK and elsewhere. So imagine you're holding a barrack, and they're selling the product for, with x amount. Okay? And then we're giving it at a discounted price to the NHS.

56:30 How does that work? Okay? And before you know it, it will be in pharmacies, and and then you need to keep the value there. So, commercially, it doesn't work. Okay? It takes too long, also, scientifically. This is a a an interesting one. This sort of emotional what I get from from investors. You think that he wants to improve communication and the share price. Okay? Yeah. We all want to improve communication and share price. Since then, both scenarios of tangible deterioration, particularly the share price. What you do when you get this share price to 50p plus. So the reason we haven't been communicating, we've trying to cut the situation in 2022. You also have to look. This is an unusual market. I've been in this situation for many, many years, in the stock market, and this is the worst market I've seen in 2022 and the start of this year.

57:21 You've seen yourself, even with good news, get sold into. So communication has no has very little value in terms of these markets, other than reassuring investors. I and so having regular r and s's and regular communications, you know, investors are looking to hold their cash because they're not really sure, and many are on to fancy losses, not just on on OPTIBIOTIX but across the board. I'm certainly got some fancy losses in all my, my my my my stocks. And so investors are looking to conserve their their their their money because they don't know how low the price is gonna go. And if the market's gonna recover, if we're gonna grow. So we're working on that. This is part of that particular process, but this is not and this is not magic. Okay? It's a it's a grind. Okay?

58:06 You gotta you gotta get the the messaging right. You gotta get your sales. You gotta get your product selling. You gotta get your new, partners in, and you gotta get your, second vision products, on the on the market. All those things I discussed earlier, that will start getting the share price back to 50% plus. So and that's what we're trying to do. Other questions about US contract, I've alluded to that in the in the presentation. Other questions about progress for the polynomety, OPTIX I've covered all of that. I've given an indication of sales figures from each partner. So that gives you a potential going going forward. Well, this is a a strange one. Why are there no institutional investors engaged? This is I get this question on occasion. We we have about eight institutional investors. I don't know where this question comes from. This is you know, we have Guinness. We have Mercia. We have Seneca.

59:05 We have a whole range of investors. I'll speak to Mercia on Friday, Seneca, a week or two ago. We have a whole range of others, and I I don't understand why people are are are asked these questions. I think what they're saying is why aren't we doing a a a placing? Because that's when you bring institutional investors in. And one of the key reasons for that is because our balance sheet is so high, we can't get ESVCT. Okay? And that's what brings in institutional investors. So most of our institutional investors, investors from our previous fundraisers. Okay? I think I'm almost there now. It's 03:00, and I've answered majority of of questions. And we'll we'll see where we where we get to in the year ahead. But I hope you found it interesting, and I hope you got indication of where I see the future taking us in the in the years ahead.

59:54 Steven, thank you very much for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On On behalf of the management team of OPTIBIOTIX HEALTH PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.