Skinbiotherapeutics (LSE:SBTX) — Full Year Results

0:00 Good morning, and welcome to the SKINBIOTHERAPEUTICS PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and I'd now like to hand you over to Stuart Ashman, CEO. Good morning,

0:31 sir. Good morning. Thank you, Amy. Thank you all for your time this morning. This is our our second investor meets in in in in in less than a couple of weeks. So, yeah, we're we're breaking the mold a little bit here. This is our presentation where we will go through the full year results that ended 06/30/2024. We'll obviously talk and reference to some of the things that happened post year end, and we'll try to get this done in an orderly manner. I have seen a number of questions submitted, we will do, as always, our utmost to get through as many of those as as humanly possible. So on the agenda today, we have operational financial highlights. We'll go through the strategy for for the past year and the coming year. We'll do an operational review of our organic businesses, the the pillars that we've talked about on multiple occasions before, and the new inorganic business, the acquisition of Dermatronics and Posture Biotech Solutions.

1:32 Manpreet will then walk you through a detailed financial review, and then we'll look at a little bit of what's going to happen in the current financial year right through till the end of summer next year in 2025. And then I'll I'll finish off with a short conclusion. So in summary, our business model, if you remember our proprietary SKINBIOTIX technology for the barrier enhancement and and repair originated from Manchester University. That was then IPO ed and and and backed by a team, board board members and the management team with with very deep medtech, skincare, financial, and business experience. So we've we've we've enhanced that team this year, and I will come on to that later. With that technology, we target multibillion pound organizations, multibillion pound markets and opportunities in skincare, very specific to skincare, psoriasis, acne, foot care, cosmetics. And we do that through in house and and and academic collaborations and also bolt on acquisitions, which we can now claim having done to this year.

2:37 That the the the development commercialization of that goes with partners that include Croda PLC, who are a FTSE 100 multi billion pound organization where we've successfully partnered with SKINBIOTHERAPEUTICS, which is now in commercialization. Windclove in The Netherlands, who manufacture our AXISBIOTICS products. We distribute those AXISBIOTICS products through Amazon as well as the Dermatonic products through Amazon. And we also have a tie up through Dermatronics with the UMESHMODI Group. That that gives us the claim to have international sales operations through through Asia, Europe, The Middle East, The US, Canada, and South America with the dermatomics products and also distribution to back that up. We have continued to have R and D programs.

3:23 We've got live programs in oral cavity, in wound care and in inflammation, and I will detail them later. The intention there is to go for external licensing opportunities with with multinationals. And from a couple of years ago with the launch of AXIS Piotics PS, we executed dual track strategy to accelerate and and reach profitability more quickly. And we did that through internal product development, AXIS Biotics, PS being the first, that's being followed by the acne product and and commercialization there. And it's some external consolidation as well through acquisitions. So the combination of all of that from a pro form a perspective, it's really important that I make this quite clear. So on an annualized basis, were we to have acquired biotech solution before year end, we didn't. But before year end, that would that would equate to consolidated revenues of 6,300,000 and consolidated more than 6,300,000 and consolidated EBITDA of of 2,200,000, which after group cost puts us past EBITDA breakeven.

4:28 Now, obviously, we didn't acquire biotech solutions until October of this year, which is past year end. So the projected projections for next year leave a quarter of earnings out one quarter because of the the closing of the year in June and the acquisition being made in in October. So just so that you're all aware of that. So the analyst analyst guidelines there, the consolidated revenues are actually 5,300,000 and consolidated EBITDA is a loss of of $800 pre synergies. So overview of the year, good progress and priority in in the biotics pillars. SKINBIOTIX, as we all know, KORDA scaled up the manufacturing and then they had a twelve month extension for additional clinical studies. Those those clinical studies were completed very successfully and post year end, we signed the commercial agreement, and I'll talk about that a little later.

5:21 AXIS Biotics, we expanded our our sales in psoriasis. Those those sales continue to grow. They were almost double in the year in comparison to the prior year, and they continue to gain traction. We successfully completed the acne study and moved towards a launch there. And the r and d pipeline in all those pillars is progressing very well indeed. As well as that, we introduced our first inorganic acquisition within that calendar year, Dermatonics in in January 2024, that integration is now fully complete. And post integration, we announced sorry, post closure, we announced a commercial agreement and tie with the Umesh Modi Group in Asia. Post year end, we acquired Biotech Solutions. That was our second acquisition and that provided not only products and direct routes to market, but also manufacturing capabilities that are very, very appropriate and synergistic to the Dermatronics acquisition. And I will talk about that in more detail in just a moment.

6:17 We also strengthened our our core team with the addition of doctor Sarendra Jahal, Das as he's better known, who as you all know is a very senior VP of Croda PLC, and is now advising us directly on all things Croda and additional tie ups with multinationals. We also brought in with the acquisition of Dermatronics, Tom Waffman, who's the operations manager. He's stepping into the shoes of the the the the exiting, founder, Greg Andrell, who is still with us and and is for another couple of years as he goes through his earn output. Tom Hoffman is his his his natural replacement. Likewise, in biotech solutions, as Ian Moulds, the founder and owner, steps away, he's with us part time for for a couple of years. Andrew Tindle has stepped up to take the the reins there, and they're both extremely competent managers who who know the businesses very well indeed.

7:10 From a group level, we added Vicky Turner, who's a very experienced marketing manager. And and those of you who follow us on social media will have seen a significant increase in our activity across all of the social media platforms. In terms of financial highlights, our revenue for for the year '23 through '24 is 1,200,000. As you can see, that is a massive increase on on the prior year. Most of that is down acquisition of Dermatonic. But let's not underestimate the growth in AXIS Pirate's PS as well. So we did a £100,000 the prior year, and now we're doing 1,200,000. And as you can see, we're projecting on a full year basis to do to do 5.3 on analyst guidance and then on a full year pro form a, that would be 6.3.

7:57 So the the the the changes night and day. EBITDA, 2,700,000 versus 3,000,000. So slightly down there. And then the net loss is is pretty much the same as the prior year. Please remember there's a lot of integration costs. There's a lot of acquisition costs in there as well. The uplift in sales is pretty much from AXIS by XPS, as I said, in the inclusion of Dermatonic revenue. The cash balance of 800,000, remember please remember this is the end of June cash balance. That reflects the £500,000 earn out on the Dermatronics acquisition. You remember we did have quite an unexpected fundraise in August, which significantly shored up our cash reserves. And as I've said before, in full year from with both acquisitions included on a pro form a basis, we would be expecting to reach north of 6,300,000 on that EBITDA breakeven.

8:48 And that cash runway, excluding any any benefit from crawler, is anticipated to last us through the summer twenty six. This has no proto numbers in it whatsoever. We made that announcement in an r and s that we had a cash runway through the summer twenty six. It has no income from prod. It has no income from any any launch of the acne products or any other joint development agreements that we would execute between now and that period. So in terms of group operations, this year has genuinely been a transformational year. And I know I came under a great deal of criticism for using that word this time last year. In an interview, I said that in in this calendar year, we would transform this group. And I'm sitting here right now and quite happy to stand behind that statement. We have transformed this. This is no longer a company.

9:36 This is a group of companies from the pillars that we had before, which were very much r and d and very much pilot launches of of advanced technology products and the tie with product. We've now added to that the addition of Dermatronics in the podiatry sector in January and then in October, biotech solutions, which gives us the manufacturing capability to to manufacture all of the dermatomics products. So this truly has been a transformational year. We've gone from a company to a to a real stand alone group. In our organic business, let's focus on Croda now. You remember what this is. It's the cosmetic application enhancement of the skin barrier. We signed this agreement in 2019. It was extended in in in November of of last year for twelve months in order to do that clinical work, which was completed in the summer.

10:28 Those results were incredibly positive indeed. Post year end, we got the green lights ahead, all green lights ahead statement. The project timeline is faster than than Corona had anticipated for a brand new strain of bacteria. I know that some people think that the can's been kicked down the road samples, I mean, quite frankly, it hasn't been kicked down the road. They've hit every milestone they said they were going to hit. And when I show the stage gates now, you'll see how precarious a journey this was. There was an awful lot of go, no go stage gates, and we came through every single one of them with flying colors. So I'm delighted to say that that is now behind us. This project is now in full commercialization. We are still expecting revenues before the end of this calendar year from Croda, and I have confirmation from them that, that is still going to happen. We are expecting, you know, revenues to to continue right through to the launch and then the law the official launch is in April 2025. They do this on a global stage. They are very, very guarded indeed about the mode of action claims, about the results of the clinicals, but also about the rollout plan.

11:33 I am privy to it. I have seen it. We have reached commercial terms. I'd like I'd like to now underpin and put some some some doubts to rest. The the the revenues on this are double digit percentage revenues on global sales. The tiered element of this is is neither here or there. It is it it doesn't move the dial hardly at all. It is not even worth mentioning. It is based on global pricing, based on on price sensitivities in market. There are some volume numbers in there. The agreement, you know, as as we've said all along, we announced this in 2019. We were looking for an agreement in perpetuity. This is not a five year agreement or a ten year agreement. There are jump out clauses. I can't go into them. I am literally locked into it to a confidentiality agreement, so I need to be very careful what questions I answer on that and what information I I convey to the to the market or convey to the market. Needless to say, we would be absolute fools to try and push information out of Croda. They are world experts in launching products of this nature. They are the architects behind Matrixyl 3,000, which is at circa €400,000,000 a year product range. This is seen as as as, you know, as as as a very big potential product. The aspirations of everyone involved in the project are very, very high.

12:50 You know, everyone's very, very pleased and delighted with the progress that we've made thus far. Unfortunately, we're all gonna have to wait. As I say, the the launch plan that we've seen has allowed us to make the statement that we believe that with with without income coming in, we will no longer need to go to the market to raise money for working capital. Let me just put another another rumor to bed. There's been a lot of focus on the word gradual that was used in the last r and s that that income would be gradual. You know, I think people are focusing on single words and trying to see its shadows in the dark where there are long. We use that word because we are not expecting to receive £25,000,000 worth of passive income in year one. It's obviously going to build up and build up.

13:38 We are certainly not expecting to receive £25,000 worth of revenue in year one. I cannot talk about specific numbers, but I think people need to stop focusing on the word gradual. It does not mean it will trickle, you know, and trickle and trickle. These people know what they're doing. Croda are professionals at this, and we have to trust their professionalism in knowing what they're doing. But please don't focus on the word gradual. It's not necessary. Moving on to that timeline. Each one of these boxes pretty much represents a go, no go stage gate, which we we have to get through in order to move to the next junction. We've come through every single one of them and we've as I said, we've done it with flying colors. This is not binary. This is happening, and it's happening now. This is launching. We have got we've seen the rollout plan. It is impressive.

14:26 It is exactly as you would expect of a multibillion pound FTSE one hundred organization. All I can say is in Croda, we trust. I am particularly very happy indeed with the progress we've made. I know it's been tedious. I know it's been drawn out. It has not been within our control, but I think the destination is well worth the journey. Moving on to access biotics. If you remember, this is the treatment of of skin irritations and skin conditions, irritable skin conditions from the inside out via the gut skin axis. We started with AXIS Biotics PS, for the alleviation of psoriasis. We've now got those direct to consumer operations in The UK and Spain. We've launched in in France and Italy and are gaining traction there. We now distribute this through through the Amazon platform, which is is is seen an uplift in sales. If you look at where we were last year, we did, you know, 250,000, you know, and and and sorry, we we we basically doubled sales year on year, and it looks like we'll double sales again year on year. This continues to grow. We continue to attract the attention of the multinationals.

15:38 To that end, you know, we have had discussions with two UK high street chains. I can't go into details on them, but, you know, the the acquisition of Dermatronics has given us access to, you know, customers that they have that are already stopping these products. So we're in discussions with them about the PS product and also the acne product. You remember we created two stabilized blend. We commenced a consumer study with 300 UK participants, the results of which were absolutely staggering, considerably better than we had anticipated and better than the psoriasis study. We've always dreamed of launching this product in a gum. We are actively working on looking at that now. It is a very complex process. The manufacturing process for gum involves a a big boiling vat of gum with flavoring in it, is then poured into molds and and then or cut into strips.

16:31 In in if you put live bacteria into that environment, it simply kills the bacteria. So what we have to do is is preform gum molds that have a cavity in, drop the probiotics into it, and seal it with a hot knife. And that that step in itself is causing us some problems. That hot knife element is killing elements of the bacteria. Not all of it, but some of it, and that's not good enough. We need all

16:54 of the bacteria alive. So we are working with manufacturing consultants to get around that problem. Worst case scenario through our acquisition of biotech solutions, we'll put this into a capsule. It is critical that we get the right carrier for this particular product. The psoriasis community have taken moderately well to the sachet of powder. Again, we think we we would do better if we put that in a capsule, and we now have that capability. We think that the right mode of act or the right carrier for this in acne would be a gum. If we can't do that, we'll put it into a capsule, but I remain supremely confident that the consultants that we've got that are looking at this will find a way around this. Again, on our organic business, our research and development programs continue. This is the backbone of what we do. We have we have a medical device program that's that's ongoing with the University of Manchester with professor Krukshan and professor Andrew McBain, who you will remember was one of the SKINBIOTHERAPEUTICS cofounders.

17:54 The aim here is to produce accelerated wound closure and and and enhanced barrier claims to in the antibiotics area that we can take out and license with an experienced multinational partner. That project will continue on through to the summer of next year before we get the first readout. In oral health with the professor McBain project, the first phase was complete. The second phase will cost us an additional £250,000. We put the pause button on that now and we will wait quarter income before we go ahead and deploy more cash to finish that project up. We would anticipate getting that done sometime in the summer of this year.

18:32 We also have the inflammation project, is led by professor Cath, professor Cath O'Neill. This is about how the the microbiome can influence and balance the body's response to sunlight, harmful UV light, and that project is ongoing and will run through the remainder of next year.

18:50 I talked a little while ago about, inorganic opportunities. And and and again, people say, Stuart, why are you doing this? Why are you why do you not wait for Croda income? And and the truth of of that is is nobody knew, including quota, what the outcome of those clinical trials was going to be. So when they asked for an extension last year and as the project was was was lengthening, we decided internally that we needed to look for some strategic inorganic opportunities that would bring either revenue generation, would bring either additional science that was microbiome driven that we didn't have, and it would accelerate some of our systems or would validate some of the the the the the opportunities that we already had. To to that end, I stated in December last year, year ago, if we can believe it or not, I can't believe times moved that quickly, that we were we were hoping to close an acquisition. Before that year end, this time last year, I thought we might get it over the line by Christmas. I did say that it depended on how fast the lawyers could move their pens, and I meant just that. As always, there was there was hiccups, and that's always the case in in in mergers and acquisition. It never follows the passive path of least resistance. It always finds the most difficult way through to closure.

20:01 It took a I made the the that bold statement. I was gonna try to get it done by year end. I did say try, and I did say it was very much in the hands of the lawyers. That slipped by four weeks, and we closed this at the end of January. Quite a lot of flack for for saying that I was gonna close it as a result of which I will no longer give timelines that are that specific ever again. But we closed this, and we closed it four weeks late. This business is going to prove to be one of the stars of the show. And there's a lot more to this business than meets the eye. Their their revenue for the full year '24 is 1,900,000. We'll put another million on top of that. That's a 52% growth year on year, which is pretty staggering. We'll also add another 40% in in EBITDA.

20:47 A lot of this is down to the the UMESHMODI Group, and we think we'll outperform those numbers on top of that. Let me be quite clear about this. Had we delayed in acquiring this business, we would have paid considerably more for it than we did because of the UMESHMODI Group. We got involved with the negotiations. We got involved very, very closely with the with the UMESHMODI team. And as a result of which, we closed this thing considerably faster than than we we could have and maybe some people will say should have. But I can be quite clear about this. This would have cost us at least 1,000,000, if not 2,000,000 more, had we had we waited for the UMesh Modi Group deal to be signed. Con controversially, we did this, the initial consideration was 1,680,000, plus an earn out over three years, 500,000 of that's already been hit.

21:38 The remaining, the remain remainder at 750,000 is yet to be achieved. The acquisition was funded by the drawdown on a convertible loan note. Now, we came under very, very significant criticism for the use of that instrument. It was a necessary evil in order to get this deal done. Yes. It was dilutive. Yes. It was aggressive. It was a two year program. We exited that program in less than six months. We should have closed biotech solutions first. That was the the target that we were after. First of all, it was a smaller purchase price. It had fixed assets that we could leverage in order to to basically acquire it. But the biotech solutions diligence took a lot longer than than than than we had thought. And the dermatomics team moved a lot faster than we had thought. And we also had the looming specter of Umesh Moli hanging over us. We needed to get this deal done, and we needed to get it done quickly.

22:32 I make no apologies for the acquisition of Dermatronics. I do apologize for the use of the convertible loan note, but let me assure you, as a small cap listed company, as as a penny stock, it is extremely difficult when you are loss generating and you're loss making to find funding for that. Could I have gone to the market and raised it, you know, on on a fundraise? The market wasn't being so kind at that at that time of year towards people raising funds for acquisition. We knew how strategically valuable this would be, and I also knew at the time that biotech solutions was right behind it. So the combination of the two brings us the 6,300,000. I now hope that people can see the pieces of the jigsaw put together form a solid foundation for this company. We are past that now. It's in our rearview mirror. We've exited the convertible loan note.

23:21 Manpreet and I made a statement to the market that we would never use a facility of that nature again, and we stand by that today. We will never use a convertible loan note of that aggressive nature, of that sort of structure ever again. This acquisition has provided immediate synergies. It's expanded our product range and our customer base and allowed us access to multinationals in The UK that we didn't have previously. It's given us an international platform. Manpreet's just come back from from from India at the sales awards for, Umesh Modi where he was one of the, the key speakers, to the sales team. And and, Manpreet, couple of words on that. An impressive organization. It's impressive and very large organization. I present it to their entire sales team, and the the enthusiasm in the room was was was spectacular.

24:13 But everyone's very excited about the the launch of the Dermatronics products through the group, and they see a big future for this for these products out out in that part of the world. So, yeah, really excited. Thank you. Just just to be clear there, the product has launched and it continues to launch. They've got twelve twelve hundred salespeople to get out there. The Malfrey was actually presenting awards to the the best sales salespeople that are already shifting products out there. So we've we've got solid revenue that's already coming in thick and fast from from Umesh Modi. So just just to put that one to bed before any rumors start there. Moving on to Pulse year end biotech solutions. This this is another jewel of an acquisition. This is the one that we wanted to get first purely and simply because I thought the narrative would fit better if we acquired this one first and then dermatomics.

25:02 The real prize here is that this company can manufacture all of the Dermatronics product range. We announced this, you know, when we acquired the business. We talked about the upside there. There is a £600,000 prize to be had here once fully integrated. That that integration is well underway at the moment. This company is capable of manufacturing liquids, topical creams, lotions, and on top of that, tablets and capsules, which plays right into the AXIS Biotics play. It is a it is a full blown manufacturing plant with with excellent warehousing facilities. It's ISO certified and manufactures to GMP standards. The acquisition cost us £1,250,000. Effectively, we stole this business. This was a a perfect timing of business. It's probably one gonna rank as one of the best deals I've ever done in my life, and and Manpreet and I both agree on this. It's a hell of a deal.

25:52 In '24, it did 2,100,000. So we paid less than one year's revenue for this. We're forecasting that it'll do 3,000,000 in a full year. That's annualized, obviously. And that that will generate, you know, £900,000 worth of EBITDA, which is an 80% increase on the on the 500,000 that it did in its previous year. So this this group has got nothing but but but positive news ahead. It runs one eight hour shift, four and a half days a week. So by the time we have the Dermatronics product in, we we're gonna start to sweat these assets, and we are looking at putting more and more capacity in there. I will talk about additional acquisitions because I know it's an immortal theme. I'll talk about them in a little while. But, another excellent acquisition that does nothing more than strengthen the group.

26:40 Manpreet, over to you. Thank you, Stuart. Stuart's obviously gone through the the macro financial highlights for FY '24, but I'll go through the in a bit more detail now. So the total revenue, organic revenue of 250,000 versus a 130,000 in the prior year, that was all accessed by XPS, the psoriasis product. Obviously, nothing through acne yet because that's only been the consumer study was only done this year and the results announced in the summer. Obviously, we're looking to sort of finalize our sort of sales plan for that product. The inorganic revenue, that all is related to Dermatronics in the period post acquisition. So we acquired Dermatronics on the January 25. So the 950 k of revenues relates to the period from then on into the 06/30/2024.

27:36 So overall, an 82% growth in the revenue from just a 130,000 in the prior year to 1,200,000. In terms of gross profit, that that all relates largely to the the Dermatronics acquisition falling through. From a gross margin perspective, we do start to see a well, we have seen a decline in the gross margin. That's all due to the mix of the Dermatronics products within within the group. Now the Dermatronics products, their margins do range by product, but also by geography as well. So and and through channel as well. So, you know, with some of our distributors, we are achieving higher margins, for example, in in in The USA, where we're currently seeing about 70 to 75% gross margins.

28:21 Whereas in some of the European countries through distributors, we're seeing, you know, lower margins around 50 to 55. So gross margins will will fluctuate by product and geography, but we we expect a sort of blended margin roughly about 60% in in FY twenty five. There's been a growth in overheads. Unsurprisingly, adding in the Dermatronics acquisition, you know, we brought on six members of staff, which includes the the the founder of the business. We brought on an office as well. So all the various expenses that go with that, insurance, professional fees, systems, etcetera. So we we have seen growth in in overheads. The overhead base in SKINBIO, that has remained fairly flat, if not actually decreased.

29:09 You know, some of the costs that we that we had in prior years. For example, r and d, you know, we're doing a little bit less r and d than we have done in prior years. And, obviously, that's offset some of the inflationary increases we saw in the last twelve to eighteen months.

29:25 EBITDA, we've seen an improvement, and that's largely due to the contribution of Dermatronics flowing through into the group. The net loss has remained fairly flat, although the EBITDA to net loss loss for FY '24, that's largely the amortization of the acquired intangibles on the Dermatronics acquisition.

29:49 Onto the balance sheet. The total assets or the the total noncurrent assets, you can see a large increase from prior year. So goodwill of 2,040,000 and then an increase in intangible assets from 700 k to 1,400,000. That all reflects the acquisition of Dermatronics. We have split out the the goodwill from some of the acquired intangible assets, and that's detailed in the annual report as was outlined in the RS last week. The annual report is is on our website as well for you to to to download. In terms of inventories, that's all Dermatronics related. You know, they they do hold a significant stockpile of us of stock.

30:36 And we, you know, we have two locations of of the inventories for Dermatonic stock. Receivables in line with prior year. The cash balance now Stuart mentioned the cash balance was $800 at the end of June twenty four. We have done a placing since in in August 24. I'll come into that in in a couple of slides time. But 8 the $100 was slightly lower than what the analyst expected, and that's largely due to that £500,000 deferred consideration earn out that we made to the founder of GemTonics.

31:15 There is another 750 k of deferred consideration. So that's split between current liabilities and noncurrent liabilities. So there's a £500,000 payment due subject to Dermatronics taking their targeted earn out to the end of January, which will be payable at the end of April, early May next year.

31:37 As at the end of June twenty four, we had the convertible loan on our balance sheet of 740 k. We we have subsequently and informed the market that that convertible loan has now cleared. So when we present our half year report, by the end of March, that convertible loan will have disappeared from our balance sheet. Overall, total assets are 2.97 versus 1.99 in the prior year, and that's reflective of the Dermatonic acquisition and a largely stronger balance sheet, putting us in a in a in a much better position going forward. That will also be enhanced again in our half year results when we add in the acquisition of Biotech Solutions as well. The cash runway, has now extended, with additional revenue from quota. There's no need to raise any more for working capital purposes in in FY '25 or '26 or beyond once those quota revenue start rolling in.

32:38 From a cash flow perspective, I just want to outline the large movements in in cash. So opened the year with 1,300,000. The net loss, 2.74. Various working capital movements offsetting each other with a small amount of CapEx. The 2,100,000, that relates to the acquisition of Dermatonics plus the deferred consideration. We did raise 3.12 in net proceeds from two fundraisers that we did. I'll outline that on the next slide. And then there was a 1,470,000 net raised from the convertible loan in January 2024. This all results in the closing cash position of £800,000 at the end of June twenty twenty four.

33:26 So in terms of fundraisings and and the capital structure, so we did raise funds to support the business acquisition strategy. In November 2023, we raised 3,300,000 in our placing and retail offer, which was significantly oversubscribed, where we placed just under 16,000,000 shares from from the placing 1,300,000 through a retail offer. January 2024, we raised 5,000,000 from a convertible bond facility, of which we only drew down 1,600,000 to fund the acquisition of Dermatronics. As we've outlined previously, that this facility is now being closed. Post year end, we raised 1,600,000 in August. This was through a placing of just under 15,000,000 shares at a price of 10.5p per share.

34:20 And this was with two new investors, Premier Miten and Synosia from Canada. The most recent funding was for the acquisition of Biotech Solutions in October 2024 where we received a loan of £950,000 and the subscription of 2,300,000 shares, raising £250,000 through a long term shareholder, David Briarwood. The structure of this of this debt is that it is a three year term, a 13% interest annually. For the first two years, we pay quarterly interest payments in arrears. The final year, we pay quarterly interest payments as well as the capital payments. As part of the structure, we issued 3,300,000 of of warrants, excisable at 10.64 p per share.

35:10 Once these warrants are are executed, this this will then reduce the debt pile from $9.50 k to 600 k.

35:23 Thanks, Mark Pri. Just a a word now on on a trading outlook, for the future. This is pro form a, obviously. And I I I must stress, I said this earlier, the £6,300,000 annual north of £6,300,000 turnover is a a full year on year projection. So that would be only if we had the benefit of biotech solutions from June onwards. So that 6.3 is actually 5.3, but I wanted you to see

35:52 you visually see what the impact of these acquisitions is on an annualized basis. So you can see there how that that synergies of 600,000, how that brings the group to to to to past EBITDA breakeven. So it's important that that you you realize these acquisitions are truly valuable indeed.

36:12 So, in summary, it has just been one hell of a year for the company. It it it really has. It it has become, probably the foundation year for everything that that we'll do from here on in. The Croda project is in commercialization now. Samples are are out to the keys. All all green lights here. The commercialize commercialization agreement was finalized. My apologies that that I'm bound by a confidentiality agreement. It is not my desire for that to be so. They are very, very adamant indeed that we lock this down. They've they've done this before. They've worked with with, small caps. They are very reluctant to work with small caps because, obviously, news flow is lifeblood to us. The minute they tell us something, we are an asset straight away. The minute they make a quote, we put it into into an RNS.

37:04 They have got to the point now where they're saying the shutters are down. You've gotta let us do our job now. Needless to say, as I've said before, the the the journey is well worth the destination is well worth the journey. And I think, you know, I think everyone will be very, very satisfied indeed, with with the outcome of of of the of this project. Croda don't spend millions of pounds in five years to have some product trickle out the door. Croda don't spend millions of pounds on on a production facility on 20,000 liter vessels, on all of that scaling up, on on what Manpreet and I have seen on a number of occasions, small army of people that have worked on this for year after year after year. They wanna get this right. The perfectionist, the track record speaks for itself. They are they are the kings of the cosmetic ingredient world.

37:50 And and as I said before, in crawler, we trust. Please, please do do not focus on the word gradual. It it is effectively gradual, but it's not trickle. We're not expecting £25,000,000 in year one or in year two, but we're not expecting $25 either. This is this this is going to be in line with expectations. And and as soon as I am capable of of releasing those numbers, I will. On that, I'll I'll come on to being inside and inside of that later because I've noticed there's a question. So all things with KRORA, very much green light. Everyone should be very happy with the progress there. The the pain is behind us. We're there now. This is in commercialization. Axis Biotics, another good year for Axis Biotics. As I've said, sales continue to grow month on month, year on year. We've doubled it from from the previous year to this year, and we'll double it again. I'd like to think we're pursuing the National Psoriasis Foundation as we have been for years. We've talked about these guys that they're they're sort of governing body.

38:51 They're actually a charity, not a governing body, that are the head of the sort of psoriasis community in in The United States. We've we've we've talked to them for years. You know, we've had a number of of samples sent over there. We're now pursuing their formal accreditation, which would allow us to put the n NPF rosette on our box. As soon as we've got that, we we we'll announce that. And then the acne launch, we said we'd do that this year, but we we've said we will only launch this with the correct carrier. This is we're we're we're appealing to the teenage community here, and any one of you who knows teenagers knows that they are the least compliant segment of society. So we need to make this as simple as possible for them to take. They're not gonna stir a sachet of powder into a glass of, you know, room temperature water every morning.

39:39 They are more likely to take a piece of chewing gum. Could If do that, we think this will go viral. If not, we'll do it with a capsule, and at least that will be a hell of a lot easier to take. In terms of projects, r and d projects, which is the backbone of the company, we've still got an inflammation project running with professor Kath, the program with, Andrew Mabane, professor Mabane in in the oral cavity, and

40:01 then we've got the Epiderm project that runs alongside Medibiotics. The Medibiotics project, we very nearly had a deal this year with a multinational. That didn't happen for a number of reasons on their side of the table, not ours. So they need to get the house in order, which I'm assured that that they're doing, and we'll we'll revisit that as early in the New Year as we are able. In terms of of mergers and acquisitions, we've completed two two acquisitions now that offer not just routes to market through those high street high street giants, but also manufacturing capabilities as well. And we do have a pipeline of further acquisitions, accretive acquisitions. You know, let let's be honest about this. We didn't just pick dermatomics and biotech solutions out of a hat. We ran a process. We've got a list of companies that are all very attractive. We've got a list of priorities within those companies.

40:52 Let me be really clear about this. We are not rushing out to buy another company tomorrow morning. No. We're buying one in quarter one. No. We're buying one probably in quarter two. Probably in quarter three, we might even consider it. We are looking towards quota revenues. I am not rushing out to dilute everyone any further. So let's just pop that to bed once and for all. You know, we've done what we needed to do. I think we've demonstrated that we had a solid strategic plan. I know it's been painful for many people, and I apologize for that. I truly do. But it's been painful for the management team also. We've come under significant criticism, some of it extremely harsh and extremely undeserved. We are now at a point where this company should be changing direction. There's some bulk selling going on in the market at the moment. That's beyond my control.

41:39 And what I can tell you is from an operational, from a financial perspective, this company is more solid than it has ever been. And I think in years to come, we'll look back on this year as the year that it all changed, and it's because of the mergers and acquisitions. So from a financial perspective, that outlook that's there, that pro form a turnover on an annualized basis, 6,300,000, if we were to do that in a full year, that would be a 2525% increase in revenue year on year. Show me another listed in fact, show me another company that's done that in a calendar year, and I'll eat my hat. We've had a we've had a phenomenal year. I am immensely proud of the team that I work with, the hard work that's that Manpreet's put in. I can't thank the likes of the investors enough for the patience and tolerance.

42:28 We've got some very loyal long term customers out there, in particular, mister David Briwood, who saw the vision, bought into it, understood it, and backed us on the second acquisition, which allowed us to bring biotech solutions into the stable. So we we do expect to be, cash positive, once we get this whole thing embedded in from a full year perspective. So that's, you know, from from the full year '25 onwards. We close this year off not just as five pillars with some potential and some ambition, with a deal with Croda in pillar one, with some some wonderful products in pillar two that we're pushing out the multinationals. We've got a potential lots of potential in pillar three. We haven't touched the surface of, pillar four, and we don't talk about pillar five, but we now stand on the foundations of two solid operating companies, Dermatronics and Biotech Solutions.

43:22 And that concludes my presentation. So Stuart, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take 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 investor dashboard. As you can see, we received a number of questions throughout today's presentation. Could I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end? Will do, Lily. Thank you. That's a lot of questions. Okay. Question one is, as we have tiered royalties for our LICS, can you tell us roughly what the tiered royalties from Croda are for high volumes of product? And are you in a position to give any rough client feedback from Croda, whether the clients like or dislike, love or love our LICS? Unfortunately, I have signed the most onerous confidentiality agreement I've ever seen in my life. Not only would would I be in trouble, but the company would be sued if if we were to to to start divulging that information. So I cannot go into the the details. What I can say is people are focusing on the word tiered. People are focusing on the word gradual.

44:39 You need to forget them. The tiered royalties, it it as I said earlier, it is the nudge is is so insignificant in one direction to another. It's not really worth mentioning. From a legal perspective, we have to mention it because they are tiered royalties. But I've stated, and I will state again, they are double digit percentage royalties based on global sales. That's as much as I can say because we've said that previously. Following the EU directive on retinal reduction, do you know approximately what percentage of clients may be forced to formulate reformulate products? That's a wonderful question, detail, and and I wish I could answer it, but I can't, because I don't know the mindset behind the customers. You are absolutely correct.

45:24 There is an EU directive on retinal reduction and on on going to more greener products. We are the solution and we are the only solution right now, which is why Croda are are very, very determined to protect the IP. That's why there's a veil of secrecy over everything. They don't want to give anyone a head start on what they're doing. They want to be the only natural solution. So I'd like to think that that will be a tidal wave of customers, but I simply don't know. Noting the statement from the end of year results that management has been able to update expectations further to be cash positive from full year 2025 and not to require any fundraisers for working capital in the foreseeable future, does that mean that you are currently forecasting that the interim results will show the company to be cash flow positive?

46:14 Manpreet? Yeah. So we're talking about f y twenty five onwards. When we expect the the company to be cash flow positive is is from from FY twenty five onwards. So at the end of this financial year. So when we get to the end of June twenty four, we expect the company to be in a a much stronger position cash wise and cash generating from there on in. Thank you. So this won't be an well, we don't expect this to be impacting the interim results. Other than the corona revenues, which we can't talk about. Yeah. Yeah. When do you expect to pay back the loan to David Briarwood? I I think my pretty detailed that the loan is interest fee free for the first two years courtesy of of mister Briarwood. So it's not a particularly burdensome or or or, you know, onerous set of terms at all. In fact, it's very friendly indeed.

47:07 So, obviously, as cash permits, we will pay this back as swiftly as we possibly can given quarter revenues. You know, what I'd like to think that we dispense of this as soon as as soon as we are able. Can you confirm that any future acquisitions will be funded through group cash slash debt and there will be no more dilution? Okay. There's about seven questions in one one one statement here. So let me answer that one first. I've just stated we are not looking to close any any deal in in quarter one or quarter two. We are in discussions with companies. They are strategic companies. There are strategic companies that are out there. Again, there is a tide in the affairs of men, I could beat Shakespearean for a moment. Sometimes you have to move fast in order to win the prize.

47:53 I'm not prepared to move fast. Just like the the the oral program, we've put that on ice until we've got sufficient cast of cash to do that. You have my assurance we will not do anything that will damage this company. I've said that we're not going to the market for working capital, raises for dilutions. Do I will I state that I'll ever re will I ever raise money for a for an acquisition? Listen. If the best thing came along since sliced bread in years to come, we would do it. I think we've got a we've got a plan now. I think we've had a a solid year. It's been very painful. I, for one, would like a softer year next year, and I could do it without the noise that dilution brings. So we will not be making acquisitions in a hurry. We've made two. We're integrating them now, but we do intend to make acquisitions to bolt on and put that that those products into the biotech solutions pipeline and into that factory. As you've seen, the dermatomics upside is 600,000.

48:47 There are acquisitions out there where that price could be even greater. So we we reserve the right to do that, but I'm not looking to dilute anyone anytime soon. There's further questions within there. When we receive quota royalties, I already answered that. Will it be RNS even if you can't give the amount? I we are locked by a confidentiality. From the last RNS samples are now being sent out with prospective customers. Yes. They have, and they have been for some time. Revenues are expected to start gradually. This implies it will be a soft launch. It does not imply anything. The dictionary definition of gradual does not imply that it's a soft launch. What I can't say is it's gonna go boom from day one. We are not gonna get all of Matrixyl's orders converted over to SKINBIOTIX on on, you know, the January 1 or the or or indeed, straight after April. We're not gonna get 25,000,000.

49:39 That means it's gradual. It will build from from the launch and onwards. So I can't I can't emphasize that enough. Krona is is currently estimating future sales. How is this possible if you already have forecasts? Well, the forecast is an estimation. It's nothing solid. They are basically they they've already spoken to their top customers. They've already got we've already got a rollout plan, but we have a global launch of all all of the customers in the world, the mom and pop shops that represent, you know, a significant amount of sales when they're all combined. So they aren't reaching out to all of them. That's being done at the at the launch, and they are continuing to speak to the you've got to remember, they've got 12,000 customers. So, again, I think people are getting confused just mixing forecast and estimates up together.

50:25 Can you confirm there'll be no more dilution? I think I've answered that. I've answered it pretty pretty boldly. We're not going to raise money for working capital, and we're not looking to make acquisitions in the near term. Will you delay further acquisitions until it can be funded? I've just answered that. Could your wound healing of SKINBIOAR products have an application in the veterinary sector? Great question. Biotech Solutions actually do have some expertise in this field, and we we are actually discussing a veterinary range with biotech solutions through the customers that they already have. And it's more a case of approaching the customers to see whether the appetite's there because there will be a premium in price. Will you approach social media influencer, g k Barry Grace Keeling, whose famous acne has obviously not been eradicated using Opagi products judging by her close ups on I'm a celebrity.

51:19 Well, that's a left of field question. We'll take a look at this, but just a word of warning. The most famous person in the world with psoriasis is Kim Kardashian. We reached out to her agents to talk about, providing Kim Kardashian with free products, if she would, you know, sort of talk about the product. They wanted about $1,500,000 just to make the introduction, and that was directly from Kim Kardashian for her to talk about it. So sometimes these so called celebrities, are are cost prohibitive. We have used influencers in the past, but we've used micro influencers who actually have psoriasis, and and the network involves people who have psoriasis. Little wee wee red spots, psoriasis girl, that sort of stuff, and and we have seen traction from that. But, we'll certainly take a look at this individual.

52:12 I do not pretend to understand the underlying science, but I recently read there's a possible link between infantile skin conditions and food, especially nut allergies. Are you aware of the of this and is the company looking at it? We are aware of it. We just don't have the bandwidth this year to to to basically submit r and d assets towards that. We the r and d pipeline is pretty full at the moment, and we are we're pretty flat out trying to deliver what we've got. We are absolutely aware of it. We do have a think tank, and we are we are looking at at at multiple next stage projects. Investors need to see to be able to see how you're performing in each market segment, in each acquisition. Will you undertake to provide these metrics for next year? We we kinda do that already. We've just provided the Dermatronics numbers and the Biotech Solutions numbers, and we will be providing that as we go forward. I think I think just to add on to that as well. Obviously, we we see, you know, we've gone from a a one product business to to multiple products and two two acquisitions within a short space of time. So, obviously, as a board management team, we understand that, you know, we have to be a bit more sophisticated in how we how we manage and monitor the business.

53:21 So when it when it comes to next year and the annual report, you'll see a lot more depth and detail into how each business business is is operating as well as the market segments and and and the products there on it. Thank you. Why haven't you bought a significant amount of shares? Alright. I'll answer this one. In fact, I'll answer this one quite happily. So I have seen the the the the quota launch plan. I've seen the projections. I've seen the launch plan. I've seen the mode of action claims. So I am categorically inside. I'm bound by a very strict confidentiality agreement. If I was to go out and buy a 100,000 shares a £100,000 of the shares tomorrow and the share price rockets off the back of of Kroner, but I am absolutely in in huge trouble and so is the company. So the answer to that question is I am categorically inside, probably more so than I've ever been.

54:13 We have an insider list within the company. Obviously, we've see we we we've all seen what we've seen. We can't unsee it. That allowed us to make the r and s that we've made. And it allowed us to announce that the deal was done. There's been some some allegations. Ashman claims that he's he's gonna be inside till the end of time. What utter nonsense. The moment that I can release the numbers, I will be the very first person and the happiest person to be dancing along to my know about saying, please sign this and let's get this released. I think we'd all be delighted to do that. Would I like to buy more shares? Of course, I would. Let but let's be honest. The last three times I've been given the option, I bought them. I haven't been given the option recently because I knew that Dermatonic was coming. We were in diligence. Therefore, I'm inside. I knew once Dermatonic was closed, we were already in diligence with biotech solutions.

55:05 Therefore, I'm inside. You can talk about being in a closed period when we're releasing accounts. That's one one form of being inside, but the other type is access to confidential information, which I am not legally allowed to divulge. So the answer to this is the moment that I can, I will? Right now, I cannot. But let's also not brush aside the fact that I have almost 9,000,000 share options, and most of them are at 9 p. I have further share options that that that I I can't achieve until we've got a certain group level of profitability and also we the share price hits ADP and then £1.20. And I firmly believe I'll hit both of those share options as well, at which stage I'll have more than 12,000,000 share options, which is an awful lot of shares. So I think I can't answer that anymore openly and honestly for that.

55:54 Who is to blame for choosing the day after boxing day for this meeting? I'm assuming you're meaning the AGM. Okay. So so let's just walk through this. This is a very easy question to answer. We are a a penny stock micro cap public listed company. We are not high on the list of independent order as priorities. The big companies come first where they make all of their money. We are at the back of the queue. We close our end at the end year, at the end of June. We then we close our books off internally in July and and in August, and and then the order we ask for the order that'll come in September. We can only wait for the order that'll come in. And people say change your order there. We've tried that. Getting a slot with a new order there is not as simple as as as it sounds. This year, we've had the added complication of a an acquisition, and next year, we'll have the added complication of another acquisition on top of Croda and as well as whatever else may come.

56:50 Let me assure each and every one of you, I would much rather not be leaving my family in the Christmas period to be sitting in an AGM in a in a soulless hotel. The the AGM is hiding absolutely nothing. You've all seen the accounts. It's a clean set of accounts. It's a clean audit. There's there there there are no qualifications in there whatsoever. The resolutions are exactly as the same they were as last year and the year before and the year before that. Nothing is being hidden from you. The reality of it is when you finalize your accounts and they are signed off by your auditor, you can then issue your accounts and your annual report and then your notice of AGM. You then have twenty one days from that notice to hold your AGM, and we must hold it before the end of December, before the end of the calendar year. Otherwise, we breach the rules. So would you like me to hold it on New Year's Eve? Would you like me to hold it on on Christmas Day, or would you like me to hold it on the twenty seventh? It is the only working day, and it's the first working day that we're capable of doing it. Manpreet and I do not want to be in a Facist Hotel on the December 27.

57:55 I have tasked the finance team, and Manpreet is well aware of this. And we've also tasked the auditor to bring this further forward next year. I would much rather do this on the December 1. You know? Why do we do it in in the Northeast Of England? That's where the entire company is located. So so simply, we inherited this. If you look back at the historic dates of the AGMs, they predate me. They are always at the back end of December, much to my my my my dissatisfaction, and I'm doing my absolute damnedest as is Manpreet to bring this further forward so that next year this AGM happens earlier. So we're not trying to hide anything despite the the silly little rumors that we are. Nonsense. Utter nonsense. The last IMC, you indicate you were flying off somewhere, and at that point, it was a secret. Could yeah. Like, I still can't talk about that.

58:47 Mancry was going to India. That was that was an that was quite open. We can disclaim this. This is a multinational that we're talking to. It's a a deal that hasn't happened yet, so I can't divulge it. It's it's nothing mystical. I wasn't flagged at Timbuktu. It was nothing particularly glamorous, certainly not as glamorous as as Delhi. I asked you at a previous investor meets company why I should buy shares. Since then, the shares have gone up and down, but mainly sideways. The share price is exactly the same as it was then, so I repeat my questions. Why should I buy shares now? Well, Andrew H, I can't tell you when to buy shares, but what I can tell you is this company is significantly derisked from where it was this time last year. I said I would transform the company. We've transformed the company. We are now projecting on a full year basis 6,300,000.

59:38 It passed EBITDA breakeven. Quarter is over the line. The the clinical trials were a success. We've dispatched with the convertible loan note. We have no cash concerns whatsoever. I could not have made any of those claims this time last year. So if you don't wanna buy shares now, I don't know when you ever would. A cheeky question. Would you be able to give a twenty four hour discount to investors on AXIS Biotics today? I won't tell my partner as it's part of his Christmas present. So we this this was submitted a little earlier. So just for you, whoever you are, and for anyone that is listening to this, your one time only code for today and today only, and it expires at 05:00, is IMCDEC2024.

1:00:34 So I think the the guys at IMC are gonna publish that, and and put that out there. So once again, that's IMCDEC2024, and that's a 25% discount that expires at the end of today. So it was a cheeky question, but you got a cheeky answer. I think we're out of time. Stuart, thank you for answering all those questions you can from investors. And, of course, company can review all questions submitted today, and we'll publish those responses on the investor meet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Stuart, could I please just ask you for a few closing comments? Yeah. Thank you all for your time. Another hour that's flown by. Thank you for listening to mine and Manfred Stulsa tones.

1:01:19 We've delivered everything that we could this year. Every single member of my team has worked flat out in order to deliver the result that we have. Crawlers over the line, no cash concerns, two acquisitions embedded in a much stronger team, convertible loan note dispensed with. Access Biotech's PS, you know, continues to grow serious discussions with multinationals on all of those subjects and and levels. The acne trial over the line, and we're now looking to get that at the right medium. This has been a transformational year. I'm probably never gonna be able to use that that word again. This is the year I'm using it. I'm very proud of each and every one of my staff, and I thank the investors from the bottom of my heart for your patience.

1:02:04 I know we're not perfect, but by god, we try. Thank you. Stuart, Manpreet, thank you for updating investors today. Can I please ask investors not to close the 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, and I'm sure it'll be greatly valued by the company. On behalf of the management team of SKINBIOTHERAPEUTICS PLC, we'd like to thank you for attending today's presentation, and good morning to you all. Thank you all.