REG - AOTI, Inc. - 2025 Interim Results
22/09/2025 07:00
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RNS Number : 2176A AOTI, Inc. 22 September 2025
22 September 2025
AOTI, INC. (the "Company" or "Group" or "AOTI")
2025 Interim Results
Accelerating topical oxygen as a new market category for the durable healing
of wounds and delivering outcomes-based care
Key validation milestones achieved despite healthcare sector headwinds in the
US
AOTI, Inc. (AIM: AOTI), a medical technology group focussed on the durable
healing of wounds and the prevention of amputations, announces its unaudited
results for the six-month period ended 30 June 2025 ("the Period" or "H1
2025").
Operational Highlights:
● Continued progress in establishing Topical Oxygen as a new market
category and validation of the TWO(2)(®) therapy value proposition for the
durable healing of chronic wounds.
● Revenue growth delivered across all segments; strong performance
in Q1 (revenue growth +26%) offset in Q2 by negative impact from US government
efficiency and the One Big Beautiful Bill Act initiatives in common with peer
group.
o Revenue growth in the six-month period ended 31 March 2025 was
approximately 38%.
● Due to the transitional headwinds that currently exist across US
healthcare, the Company implemented organisational and operational changes
across its commercial teams to be more adaptable to today's unprecedented
market conditions and has put in place targeted and prudent cost containment
measures to optimise near term discretionary spend.
● On track to deliver revised FY 2025 guidance as indicated in the
July trading statement, with revenue growth for FY 2025 expected to be in the
mid-teens and adjusted EBITDA margin expected to be low double digit. Trading
post period in July and August has been consistent with this revenue growth
guidance.
Post Period:
● Three key validation milestones that support longer term
commercial opportunities, and provide valuable precedents for other
reimbursement bodies, including the Centers for Medicare & Medicaid
Services (CMS) local coverage determination (LCD) in the US:
o California Medicaid: Market access momentum with Provider ID awarded in
the largest Medicaid market in the US;
o Germany: Nationwide TWO(2)(®) treatment recommendation by the Federal
Joint Committee (G-BA), and;
o UK: National Institute for Health and Care Excellence (NICE) treatment
recommendation in updated Diabetic Foot Problems: Prevention and Management
guideline.
· TWO(2)(®) therapy is now available across the NHS via NHS Supply
Chains' Advanced Wound Care Framework.
Financial Highlights:
$'000 H1 2025 Unaudited H1 2024 Change
Unaudited
Revenue 31,843 26,339 +20.9%
Adjusted EBITDA 3,070 3,391 -9.5%
(Net Debt) / Net Cash (5,396) 5,532 n.m.
n.m. = not meaningful
● Revenues of $31.8m (H1 2024: $26.3m): Up 20.9%, increase mainly
driven by Medicaid (up 57.1%) with growth across all business segments. Strong
trading performance in Q1 2025 - c.26% growth, more subdued growth in Q2 2025
c.16% growth with greater impact from US government efficiency initiatives.
● Adjusted EBITDA of $3.1m (H1 2024: $3.4m): Robust Adjusted EBITDA
despite US healthcare headwinds and additional costs due to higher (non-cash)
Current Expected Credit Loss (CECL)* provision (linked to higher receivables),
investment in sales team and listing costs not incurred in H1 2024. Adjusted
EBITDA margin of 9.6% (H1 2024: 12.9%).
● Receivables: Insurers in Arizona continue to delay payment for
services provided, increasing receivables balance, but with the initial claims
having now been paid in full. We are continuing to pursue claims with insurers
and engage with the state Medicaid agency to resolve the situation.
● Net debt position of $5.4m (H1 2024: net cash $5.5m): amendment to
existing loan agreement provides an additional $11.0m loan with a reduced
overall interest rate and longer amortization terms, with significant headroom
against all covenant tests for the year**. Current cash of $14.4m and debt of
$19.8m.
Outlook:
● As indicated in the July trading statement, revenue growth for FY
2025 is expected to be in the mid-teens and adjusted EBITDA margin is expected
to be low double digit. Trading post period in July and August has been
consistent with this revenue growth guidance.
● The Company continues to view current US headwinds as
transitional, and we remain firmly focused on executing our growth strategy
and restoring historical momentum in the medium term. In the near term, it is
expected that the main sources of revenue will continue to be driven from
increasing penetration of the Veterans' Administration (VA) and expanded
penetration within the New York Medicaid sector where coverage of TWO(2)(®)
therapy is mandated. In other states where we have obtained Medicaid Provider
IDs, we will continue to pursue reimbursement with state agencies and payers,
but this is where we are experiencing the strongest headwinds created by the
One Big Beautiful Bill Act as indicated in our July trading statement. We
expect our growth trajectory to return to the higher levels previously
achieved as these transitory market dynamics subside.
Dr. Mike Griffiths, Chief Executive Officer & President of AOTI, said:
"Performance for the first half of 2025 saw growth across all segments as we
continue to build awareness and adoption of our cost and limb saving
TWO(2)(®) therapy. We are prioritising our commercial execution to the main
revenue generating opportunities, while strategically investing in the drivers
that will allow for accelerated growth in the mid-term.
AOTI is uniquely positioned to deliver effective cost-saving outcomes and
clinical data-driven care which aligns with the US Administration's stated
healthcare priorities. Consequently, we believe that the unprecedented
headwinds we have been experiencing recently will ultimately turn into
tailwinds for our business.
The positive G-BA coverage recommendation for TWO(2)(®) in Germany, the
granting of our Provider ID in California, as well as inclusion of topical
oxygen therapy in the updated NICE treatment guidelines in the UK, all serve
as valuable benchmarks for other reimbursement bodies, including CMS in the
US. Importantly, reimbursement by the CMS would fully unlock access to
Medicare-eligible, as well as accelerate access to Medicaid-eligible,
patients, in what we believe would be a transformational revenue driver
milestone."
The Interim Results for the Period ended 30 June 2025 will be published on the
Company's website today at https://aotinc.net (https://aotinc.net) .
Analyst Meeting
A presentation for sell-side analysts will be held this morning at the offices
of FTI Consulting, 200 Aldersgate, London, EC1A 4HD. The meeting will commence
at 09:30 British Summer Time (BST) and will also be held via webcast for those
who would prefer to join virtually. If you would like to attend in person or
via the dial-in details, please inform: AOTI@fticonsulting.com
(mailto:AOTI@fticonsulting.com) .
Investor Presentation
A presentation for all existing and potential shareholders will be held later
today via the Investor Meet Company platform at 11:30 BST. Investors can
sign up to Investor Meet Company for free and add to meet AOTI,
INC. via: https://www.investormeetcompany.com/aoti-inc/register-investor
(https://www.investormeetcompany.com/aoti-inc/register-investor) . Investors
who already follow AOTI, INC. on the Investor Meet Company platform will
automatically be invited.
For more information please contact:
AOTI, INC.
Dr. Mike Griffiths, Chief Executive Officer +44 (0)20 3727 1000
Jayesh Pankhania, Chief Financial Officer ir@aotinc.net (mailto:ir@aotinc.net)
Peel Hunt LLP (Nominated Adviser and Broker) +44 (0)20 7418 8900
Dr. Christopher Golden, James Steel
FTI Consulting (Financial PR & IR)
Ben Atwell, Simon Conway, +44 (0)20 3727 1000
Natalie Garland-Collins AOTI@fticonsulting.com (mailto:AdvancedOxygenTherapy@fticonsulting.com)
ABOUT AOTI, INC.
AOTI, INC. was founded in 2006 and is based in Oceanside, California, US and
Galway, Ireland, providing innovative solutions to resolve severe and chronic
wounds worldwide. Its products reduce healthcare costs and improve the quality
of life for patients with these debilitating conditions. The Company's
patented non-invasive Topical Wound Oxygen (TWO(2)(®)) therapy has
demonstrated in differentiating, robust, double-blinded randomized controlled
trials (RCT) and real-world evidence (RWE) studies to more-durably reduce the
recurrence of Diabetic Foot Ulcers (DFUs), resulting in an unprecedented 88
per cent reduction in hospitalizations and 71 per cent reduction in
amputations over 12 months. TWO(2)(®) therapy can be administered by the
patient at home, improving access to care and enhancing treatment compliance.
TWO(2)(®) therapy has received regulatory clearance from the US (FDA), Europe
(CE Mark), UK (MHRA), Health Canada, the Chinese National Medical Products
Administration, Australia (TGA) and in Saudi Arabia. TWO(2)(®) therapy has
also recently received positive coverage recommendations from the Federal
Joint Committee (G-BA) in Germany and National Institute for Health and Care
Excellence (NICE) in the United Kingdom. Also see www.aotinc.net
(http://www.aotinc.net)
*Current Expected Credit Losses (CECL) methodology as required by
the Financial Accounting Standards Board (FASB), Accounting Standards Update
No. 2016-13 Financial Instruments - Credit Losses (topic 326)
** Key terms for the revised SWK Funding LLC loan
The loan has been increased by $11.0 million to a facility of $19.5 million at
an interest cost of SOFR plus 7.75% (reduced from SOFR plus 9.50%), with
maturity extended to February 2029 and an interest only period until February
2027.
The SOFR floor has reduced from 3.50% to 3.15%.
Covenants are tested calendar quarterly and include (1) Minimum Consolidated
Unencumbered Liquid Assets being the greater of $2.0 million and last three
months Operating Burn (mainly consisting of operating cash out flows plus
expenditures for property, plant and equipment); (2) Minimum Revenue on a last
twelve month basis of $62.7 million as at 30 September 2025 increasing
quarterly to $64.7 million as at 31 December 2025 and reaching $72.5 million
from 31 December 2026 onwards; and (3) Minimum EBITDA on a last twelve month
basis of $5.5 million as at 30 June 2025 increasing quarterly to $6,000,000 as
at 31 December 2025 and reaching $6.8 million from 31 December 2026 onwards.
CHIEF EXECUTIVE OFFICER'S REPORT
A long-term sustainable and resilient growth model despite headwinds
The first half of 2025 has seen growth across all segments of the business. In
the first three months of 2025 the Group recorded revenue growth of
approximately 26%. As outlined in the July trading update, trading in Q2 2025
was more volatile and growth more subdued than previous periods. This is in
common with our peers with significant exposure to the US healthcare sector
and due to the impact of US government policy and spending initiatives causing
disruption across payers.
The impact of these US headwinds has resulted in a slowdown of overall revenue
growth, impacting EBITDA and cash generation, but they are expected to be
transitional, and in due course we expect to be a net beneficiary of the cost
reduction and treatment goals of the US Administration.
First half revenue increased 20.9% to $31.8m (H1 2024: $26.3m) mainly driven
by Medicaid (up 57.1%). Adjusted EBITDA was down slightly to $3.1m (H1 2024:
$3.4m) and an adjusted EBITDA margin of 9.6%.
$'000 H1 25 H1 24 Change
Unaudited Unaudited
Veterans Administration 17,272 16,873 +2.4%
Medicaid 14,027 8,926 +57.1%
Other (NEXA™ and International) 544 540 +0.7%
Total 31,843 26,339
Veterans Administration (VA) (54% of total revenues in H1 2025)
As previously indicated, performance for the VA was weaker in the second
quarter due to continued disruption from the impact of VA head count reduction
and efficiency initiatives. The disruption is expected to extend into H2 2025,
but we anticipate this to abate as the year progresses as it has been reported
that most of these initiatives have now been implemented.
Medicaid (44% of total revenues in H1 2025)
Revenue growth remained robust at 57.1% (H1 2024: 83.8% growth), underpinned
by the performance within NY Medicaid, where clear coverage policies for
topical oxygen are mandated by the state. Revenue growth in H1 2025 would have
been higher if not for the continuing disruption with billing and payment in
Arizona state (see "Receivables" below).
Other (2% of total revenues in H1 2025)
Revenue growth was 0.7% which was mainly driven by the Gulf region of the
Middle East. We expect GB-A coverage in Germany and NICE recommendation in the
UK to enable progress in the second half of the year.
Organisation and operational changes
In response to the current external challenges, the Company has implemented a
number of organisational and operational changes. A new internal appointment
was made to lead the VA segment's commercial activities with the objective to
drive growth and penetration by leveraging the strong foundations that have
been in place for many years and optimising sales incentivisation policies.
In H2 2025, as previously indicated, we continue to see uncertainty as a
direct and indirect result of the US government cost containment initiatives
within the healthcare system. In particular for the Medicaid market segment,
it is likely to impact progress in securing informal coverage in new expansion
states and patient populations prior to receipt of more definitive coverage
determinations and has the potential to cause disruption through H1 2026.
The Board believes however that both the US Administration's efforts and the
implementation of the One Big Beautiful Bill Act, that focus largely on cost
reductions and value-based care, should ultimately provide AOTI with a
favourable health economic framework to drive accelerated growth in the medium
and long term, due to the Company's products' proven durable clinical outcomes
and cost savings, likely turning today's headwinds into tailwinds.
Market access strategy & segment performance
Complex reimbursement requirements
Obtaining and maintaining reimbursement with individual payers is
time-consuming and sometimes unpredictable prior to a mandated coverage
determination being granted either by CMS or individual Medicaid states. As a
result, the coverage determination process is often time-consuming and costly
requiring the Company to provide substantive scientific and clinical evidence
to support the use of the Company's products to each payer separately, with no
assurance that coverage and adequate reimbursement will be applied
consistently or obtained in the first instance.
Consequently, most companies wait for CMS coverage prior to actively
commencing marketing activities. AOTI, has taken a more proactive approach,
grounded in the investments made by the founders prior to IPO. As we possess
such a unique and differentiating value proposition, in the period prior to
receiving a positive CMS coverage determination, we chose and continue to work
with individual state Medicaid agencies and managed care insurers to obtain
coverage and reimbursement for TWO(2)(®) therapy.
AOTI's approach to market access is the basis of a three-phase expansion plan
to deliver the Group's long-term growth objectives. Ultimately, as these
phases are implemented, the remaining payer categories will also provide
reimbursement. The Group is targeting these sectors because they have the
highest diabetes and chronic wound prevalence rates.
● The first phase of the Company's reimbursement strategy has
successfully been completed with reimbursement for the Company's TWO(2)(®)
therapy having been secured in the VA and New York Medicaid for a number of
years. As noted above, it is in the VA and New York Medicaid where the Company
expects the main revenue generation to continue in the near term.
● The second phase of expanding wider state Medicaid payer coverage
is ongoing, and now very well progressed with market access secured in 13
Medicaid states, which is ahead of our business model and strategy. This
strategy is key to our ability to accelerate our growth and profitability,
once broad market reimbursement (post CMS coverage) has been attained. While
we are billing in six states currently, we do not expect material revenue
contributions from these (with the exception of New York and Arizona) in the
near-term given the challenges from current headwinds with the
payers/insurance companies focused mostly on adapting to the evolving US
healthcare landscape.
● The third phase of the Group's market access strategy will be
achieving full US national coverage through a CMS coverage determination and
resultant access to the Medicare population, which will also allow for
accelerated access to Medicaid and private payer populations. CMS is currently
in process of their coverage review for topical oxygen therapy.
New York - mandated Medicaid coverage policy
New York has a mandated coverage policy in place for Medicaid that provides a
reimbursement code and coverage criteria for topical oxygen, which is a unique
situation. As a result, insurers cannot reject the treatment but require we
follow a sometimes cumbersome preauthorisation process.
In other states, our approach to obtaining Medicaid reimbursement is currently
different to New York. Prior to us achieving a mandated coverage policy in
other states, reimbursement is achieved based on medical necessity (determined
by a doctor) and demonstrating value (clinical and cost savings) to the
managed care insurers. Prior to the US government efficiency initiatives and
the One Big Beautiful Bill Act, our strong efficacy and cost-saving
credentials were enough to provide informal coverage in other states once we
achieved our Provider IDs. The payers' reaction to the unprecedented changes
to be implemented in the Act have been to initially deny claims resulting in
the need for appeals (as in the state of Arizona), or slow reimbursement
negotiations. Consequently, outside of New York and Arizona, we do not expect
significant Medicaid revenues in the near term while those reimbursement
negotiations remain ongoing.
CMS topical oxygen therapy (TOT) coverage
The Company has made significant progress in US market access, securing
Provider IDs in 13 states, building relationships with key opinion leader
(KOL) clinicians, major payer and insurance networks, and engaging with key
regulatory and reimbursement bodies. These efforts form the foundation for the
third phase of our commercial strategy, namely achieving broader national
coverage through CMS, a federal agency within the US Department of Health and
Human Services responsible for administering the largest public health
insurance programmes in the US. CMS is actively reviewing topical oxygen for a
Local Coverage Determination (LCD) policy that would provide mandated coverage
for all Medicare participants across the US (in a similar fashion to New York
state) and a predicate for all payers nationwide.
Recent key validation milestones as to where CMS might conclude their analysis
include our recent market access success in attaining our Provider ID in
California, the G-BA positive treatment recommendation in Germany and the NICE
fast track DFU guideline recommendation for topical oxygen therapy in the
UK. These endorsements reinforce the Company's clinical and economic value
proposition in the US and internationally and are all strong predicates in
support of a positive CMS coverage determination.
While we clearly have no indication of the timing or likely outcome from this
review, the Company's extensive evidence based clinical and value proposition,
combined with recent progress in many markets, we believe provides a
compelling reference points for CMS and positions us strongly for national
reimbursement success.
The process for CMS Medicare coverage is summarised below:
● Under social security law, Medicare coverage is limited to items
and services that are deemed reasonable and necessary for the diagnosis or
treatment of an illness or injury.
● CMS conducts an evidence-based process to make such
determinations, which is administered in the case of Durable Medical Equipment
(DME) devices by a group of four DME Medicare Administrative Contractors
(DMEMACs) utilising what is called Local Coverage Determination (LCD) process.
● An LCD coverage request is made to the DMEMACs based on
substantive Randomized Controlled Trial (RCT) clinical evidence. The DMEMACs
then decide if the request meets mandated criteria and is Valid, convening an
expert review committee if desired.
● The DMEMAC Medical Directors then conduct a detailed analysis of
the evidence to conclude if the therapy should be covered and draft the LCD -
this is the current stage of the topical oxygen LCD process.
● A Proposed (Draft) LCD is published with a 45-day open public
comment period. CMS now has up to 365 calendar days from the publication date
to finalise.
● The Final Rule is then published and comes into force after 60
days.
● If Coverage is defined, then the pricing and coverage policy are
set by DMEMACs and detailed in the LCD and accompanying Local Coverage
Articles (LCAs).
CMS coverage opportunity
Once a coverage determination is issued by CMS, it would provide the Company
with access to the c.65 million Medicare beneficiaries (Americans over 65
years of age) who have a 25 per cent. prevalence rate of diabetes.
The LCD will establish the coverage criteria and through an updated fee
schedule will set the national Medicare reimbursement rate and mandate
reimbursement across all US jurisdictions.
Medicaid commercial acceleration with CMS coverage
CMS coverage via a LCD creates a strong predicate and will also automatically
allow for the coverage codes to be active across all Medicaid states that will
help to accelerate and streamline state level coverage policies, market
access, adoption and reimbursement.
Conclusion
Despite current headwinds caused by the ongoing transformation of the US
healthcare landscape, we have seen growth across all segments of the business
in the first half and continued to make commercial progress in establishing
Topical Oxygen as a new market category in the durable healing of chronic
wounds. Whilst trading post period in July and August has been consistent with
our revenue growth guidance, the impact of disruption in the US healthcare
space continues and as such in the near term we expect most of our revenue
will continue to come from the VA and New York (and Arizona) Medicaid. We are
adapting to the US disruptions and believe AOTI is uniquely positioned to
deliver effective outcomes and value-based care through its innovative
TWO(2)(®) therapy that aligns with the US Administration's focus on achieving
substantive cost reductions and home delivered value-based care. Recent
positive decisions in Europe continue to validate our clinical and value
proposition supporting a positive coverage determination by CMS in the US
which would resolve the current levels of friction and uncertainty we are
experiencing in the market, as well as launch AOTI into the third phase of the
Company's growth strategy.
DR. MIKE GRIFFITHS
Chief Executive Officer & President of AOTI, Inc.
19 September 2025
CHIEF FINANCIAL OFFICER'S REPORT
Financial Report
Financial highlights
$'000 (unless stated) H1 2025 H1 2024 Change*
Unaudited Unaudited
Revenue 31,843 26,339 +20.9%
Gross Profit 27,913 22,986 +21.4%
Gross Margin (%) 87.7% 87.3% +0.4%
Operating Expenses 25,942 25,674 +1.0%
Profit / (Loss) from Operations 1,971 (2,688) n.m.
Adjusted EBITDA 3,070 3,391 -9.5%
Basic and Diluted profit / (loss) per share (dollars per share) 0.00 (0.05) n.m.
Operating Cash Flow (4,693) (2,220) +111.4%
Financing Cash Flow 10,908 21,931 -50.3%
Net (Debt) / (Cash) (5,396) 5,532 n.m.
* Certain changes are calculated on underlying numbers before rounding
n.m. - not meaningful
Revenue
Revenues grew 20.9% to $31.8m in the period (H1 2024: $26.3m). This was driven
by growth across all market segments, but predominantly through growth in the
Medicaid segment.
Gross Profit
Gross Profit increased 21.4% to $27.9m, and Gross Margin increased to 87.7%
representing a 0.4% increase. The mix of business towards the higher margin
Medicaid segment increased from 33.9% to 44.1%.
Operating expenses
Operating expenses increased by 1% to $25.9m in the period. Excluding
share-based compensation and IPO related costs, underlying operating expenses
increased from $20.5m in H1 2024 to $25.9m in H1 2025, an increase of 26.6%.
This is due to the investment in the sales team and sales support activities,
listing related costs and non cash CECL provision.
Adjusted EBITDA
Adjusted EBITDA was $3.1m (H1 2024: $3.4m) a reduction of 9.5%. This was due
to investments in the sales team and sales support activities in anticipation
of stronger than expected growth in revenue as well as additional costs for
increased non cash CECL provision and listing costs that were not incurred in
H1 2024. As the business navigates the headwinds caused by disruption in the
US healthcare system, we expect Adjusted EBITDA margins to improve over the
medium term.
Profit from Operations
The Profit from Operations was $2.0m compared to a $2.7m loss in H1 2024. In
2024 this includes non-cash share-based payments and strategic advisory and
IPO preparation costs as mentioned above. Excluding these items, there would
be a Profit from Operations of $2.5m in H1 2024.
Earnings per share
The basic and diluted earnings per share was $0.00 (H1 2024: $0.05 loss).
Operating Cash Flow
Operating Cash Outflows were $4.7m (H1 2024: $2.2m) an increase of 111.4%.
Cash out flows were mainly impacted by the increase in receivables arising
from upheavals in the Arizona healthcare system. As noted in the trading
update on 21 July 2025, payment of legitimate claims, although making
progress, have been taking significantly longer than previously experienced.
The Company continues to actively engage with Medicaid insurers and with the
state Medicaid agency to resolve these issues and is monitoring the situation
closely.
In addition to this, inventory has seen an increase to $5.0m (FY 2024: $2.5m).
This is due to the long lead times in obtaining stock combined with
commitments to purchase in anticipation of growing sales.
Financing Cash Flow
Financing Cash Flow reduced to $10.9m (H1 2024: $21.9m) as 2024 included net
proceeds from the IPO of $19.9m. H1 2025 includes an increase in the SWK
Funding loan of $11.0m
Net Debt / Net Cash
Net Debt is $5.4m (H1 2024: Net Cash $5.5m), predominately reflecting the
drawdown of an additional $11.0m funding from SWK in May 2025.
Reconciliation between Net Profit / (Loss) and Adjusted EBITDA
$'000 H1 2025 H1 2024
Unaudited Unaudited
Net Profit / (Loss) 248 (3,867)
Provision for income taxes 540 143
Interest expense 1,117 1,084
Depreciation and amortization 1,165 801
Warrant amortization - 48
EBITDA 3,070 (1,791)
Share-based compensation (non-cash)* - 5,077
Strategic advisory and IPO preparation ** - 105
Adjusted EBITDA 3,070 3,391
* Share-based compensation included as a non-recurring expense due to
acceleration as a result of the IPO in 2024.
** The Company had incurred certain costs related to IPO preparation in 2024.
Receivables
The Company has seen receivables increase to $19.7m (FY 2024: $13.4m). This
is primarily due to the issues experienced in Arizona, where the debtor
balance for this state is $12.3m. Due to upheavals in the state, payment of
legitimate claims is taking significantly longer than previously experienced.
The Company continues to pursue claims with insurers and engage with the state
Medicaid agency to resolve the situation.
Other items
The Company amended the covenants on its SWK loan in August 2025 as set out in
the notes of the financial statements.
JAYESH PANKHANIA
Chief Financial Officer of AOTI, Inc.
19 September 2025
Condensed Consolidated Interim Financial Statements (unaudited)
Condensed Consolidated Balance Sheet
(in thousands, except number of shares and per share amounts)
30 Jun 2025 31 Dec 2024
Unaudited Audited
$'000 $'000
Assets
Current assets
Inventory 4,982 2,514
Income tax receivable 40 17
Trade accounts receivable, net 19,738 13,433
Other receivables and prepayments 1,148 1,384
Cash and cash equivalents 14,366 9,336
Total current assets 40,274 26,684
Non-current assets
Property, plant and equipment 3,231 3,346
Intangible assets 9,355 9,015
Operating lease right-of-use assets 1,494 469
Deposits held 26 26
Total non-current assets 14,106 12,856
Total assets 54,380 39,540
Liabilities and Shareholder's Equity
Current liabilities
Accounts payable - trade 1,883 1,550
Accrued expenses 8,660 7,313
Income tax payable 460 87
Deferred revenue and customer advances 2,493 2,381
Operating lease liabilities 415 189
Total current liabilities 13,911 11,520
Non-current liabilities
Deferred income tax liabilities 1,844 1,844
Long-term debt, net 19,762 8,433
Operating lease liabilities 1,119 302
Total non-current liabilities 22,725 10,579
Total liabilities 36,636 22,099
Shareholder's Equity
Common share, $0.00001 par value, 106,359,163 1 1
Additional paid-in capital 35,141 35,086
Retained earnings (deficit) (17,398) (17,646)
Total shareholders' equity 17,744 17,441
Total Liabilities and Shareholder's Equity 54,380 39,540
Condensed Consolidated Statement of Operations for the six months ended June
30,
(in thousands, except number of shares and per share amounts)
30 Jun 2025 30 Jun 2024
Unaudited Unaudited
$'000 $'000
Revenue 31,843 26,339
Cost of revenue (3,930) (3,353)
Gross Profit 27,913 22,986
Operating expenses
Commissions (6,864) (5,515)
Salaries, wages and benefits (11,494) (14,646)
Other operating expenses (7,584) (5,513)
Total operating expenses (25,942) (25,674)
Profit / (loss) from operations 1,971 (2,688)
Realized (losses) gains on foreign currency transactions 24
(66)
Other gain - 24
Interest expense (1,117) (1,084)
Profit / (loss) before income taxes 788 (3,724)
Provision for income taxes (540) (143)
Net Profit / (loss) 248 (3,867)
Profit / (loss) per common share
Basic earnings / (loss) per share (dollars per share) 0.00 (0.05)
Diluted earnings / (loss) per share (dollars per share) 0.00 (0.05)
Weighted average shares outstanding 106,359,163 85,037,628
The above condensed consolidated statement of operations relates to continuing
operations for the Company.
Condensed Consolidated Statement of Shareholders' Equity
(in thousands, except number of shares)
Common share Additional paid in capital Retained earnings Total
equity
Shares $'000 $'000 $'000 $'000
Balance at 1 January 2024 82,405,340 1 9,978 (15,890) (5,911)
Loss for the period and total comprehensive income - - - (3,867) (3,867)
Issuance of new common shares 23,953,823 - 24,735 - 24,735
Shares issued as repayment of debt - - 100 - 100
Issuance costs related to IPO - - (4,804) - (4,804)
Issuance costs related to IPO settled as restricted shares - - (2,332) - (2,332)
Settlement of restricted shares - - 2,332 - 2,332
Share-based payment expense - - 5,077 - 5,077
Balance at 30 June 2024 Unaudited 106,359,163 1 35,086 (19,757) 15,330
Profit for the period and total comprehensive income - - - 2,111 2,111
Balance at 31 December 2024 Audited 106,359,163 1 35,086 (17,646) 17,441
Profit for the period and total comprehensive income - - - 248 248
Share-based payment expense - - 55 - 55
Balance at 30 June 2025 Unaudited 106,359,163 1 35,141 (17,398) 17,744
Condensed Consolidated Statement of Cash Flows
(in thousands)
Six months to 30 Jun 2025 Six months to
30 Jun 2024
Unaudited
Unaudited
$'000 $'000
Cash flows from operating activities
Net Profit / (loss) 248 (3,867)
Adjustments to reconcile net profit / (loss) to net cash used in operating
activities:
Depreciation and amortization 1,165 801
Gain on disposal of fixed assets - (24)
Loan fees and warrant amortization 12 48
Share-based compensation & other awards 55 5,077
Deferred income taxes - (58)
Movement in allowance for credit losses 437 (59)
Paid-in-kind interest capitalised to note - 478
Other non-cash items
Changes in assets and liabilities:
Accounts receivable (6,741) (2,426)
Inventory (2,468) 208
Income tax receivable (23) (11)
Other 409 -
Other receivables and prepayments 237 (213)
Accounts payable 331 (4,064)
Accrued expenses and income tax payable 1,720 1,811
Operating lease liabilities (188) -
Deferred revenue and customer advances 113 79
Net cash used in operating activities (4,693) (2,220)
Cash flows from investing activities
Purchase of plant, equipment and intangible assets (1,185) (577)
Payment of lease liability - (159)
Net cash used in investing activities (1,185) (736)
Cash flow from financing activities
Proceeds from IPO - 24,735
Issuance costs related to IPO - (4,804)
Proceeds from loans 11,000 2,000
Financing fees (92) -
Proceeds from related party loans - 1,008
Repayment of related party loans - (1,008)
Net cash generated from financing activities 10,908 21,931
Increase in cash and cash equivalents 5,030 18,975
Cash and cash equivalents at beginning of period 9,336 778
Cash and cash equivalents at the end of the period 14,366 19,753
Notes to the unaudited Condensed Consolidated Financial Statements
1. General Information
AOTI, Inc. (the "Company") is a public limited company which is listed on the
AIM Market of the London Stock Exchange and incorporated in the State of
Florida in the United States. The address of its registered office is
Registered Agents Inc., 7901 4th St N, STE 300, St. Petersburg, FL 33702.
2. Basis of preparation
The condensed consolidated interim financial statements include the results of
Company and its subsidiaries ("the Group") for the six months ended 30 June
2025 and have not been audited.
These condensed consolidated interim financial statements have been prepared
in accordance with the AIM rules and the recognition and measurement
requirements of Generally Accepted Accounting Principles as issued by the
Financial Accounting Standards Board (FASB) ("US GAAP") and adopting the
accounting policies that will be applied in the 31 December 2025 annual
financial statements and consistent with those disclosed in the 2024 Annual
Report.
These condensed consolidated financial statements should be read in
conjunction with the historical financial information contained within the
2024 Annual Report, which is available on the Group's website at:
https://aotinc.net (https://aotinc.net)
These condensed consolidated interim financial statements were approved by the
Board of Directors on 19 September 2025.
3. Accounting policies
Going concern
The Directors believe that the Group has adequate resources to continue
trading for at least 12 months from the date of approval of these condensed
consolidated interim financial statements. Accordingly, the Directors continue
to adopt the going concern basis of accounting in preparing these financial
statements.
Summary of significant accounting policies
The accounting policies applied by the Group in these condensed consolidated
interim financial statements are the same as those applied by the Group in the
financial statements disclosed in the 2024 Annual Report.
4. Revenue
The following table sets out the Group's revenue by stream:
Six months to Six months to
30 Jun 2024
30 Jun 2024
Unaudited Unaudited
$'000
$'000
Equipment rentals 18,222 16,842
Product sales, net of returns and allowances 13,621 9,497
Total revenues 31,843 26,339
5. Earnings / (Loss) per share
The calculation of basic and diluted earnings per share is based upon the
profit/(loss) attributable to equity holders divided by the weighted average
number of shares in issue during the period.
Basic earnings per share is calculated based on the Group's net profit for the
year attributable to shareholders divided by the weighted average number of
ordinary shares in issue during the year. The weighted average number of
shares is net of shares purchased by the Group and held as own shares. Diluted
earnings per share take into account the dilutive effect of all outstanding
share options priced below the market price in arriving at the number of
shares used in its calculation.
Six months to 30 Jun 2025 Six months to
30 Jun 2024
Unaudited
$'000 Unaudited
$'000
Profit / (Loss) for the period from continuing activities 248 (3,867)
Basic weighted average number of ordinary shares in issue (number) 106,359,163 85,037,628
Dilutive impact of share awards (number) 7,558,333 -
Diluted weighted average ordinary shares in issue (number) 113,917,496 85,037,628
Basic earnings / (loss) per share (dollars per share) 0.00 (0.05)
Diluted earnings / (loss) per share (dollars per share) 0.00 (0.05)
6. Intangible assets
30 Jun 2025 31 Dec 2024
Unaudited Audited
$'000 $'000
License agreements 9,615 9,615
Patents 508 508
Software in development 915 323
Gross carrying value 11,038 10,446
License agreements (1,282) (1,042)
Patents (401) (389)
Software in development - -
Accumulated amortization (1,683) (1,431)
License agreements 8,333 8,573
Patents 107 119
Software in development 915 323
Net carrying amount 9,355 9,015
7. Long-term debt
30 Jun 2025 31 Dec 2024
Unaudited Audited
$'000 $'000
Long-term commitments finance company 19,478 8,478
Unamortised financing fees (125) (45)
Accrued debt exit fee due on maturity 409 -
Total long-term debt 19,762 8,433
Long-term Commitment
The Company currently holds a loan agreement with SWK Funding LLC (SWK)
originally entered in 2022. In February 2025, the Company entered into the
fifth amendment to the loan agreement with SWK, deferring principal
amortization from 2025, repricing the margin on the loan from 10.20% to 9.5%
and increasing the SOFR floor from 1% to 3.5% effective from February 2025. In
May 2025, the Company entered into the sixth amendment upsizing the existing
facility by $11,000,000, deferring principal amortization from 2026 to 2027,
and extending the maturity date to February 2029 from March 2027. The Company
completed the drawdown of the $11,000,000 in May 2025. The Loan's SOFR Rate
was repriced from 9.5% to 7.75% and the exit fee was increased from $625,000
to $1,090,000. As part of the refinance management have accreted the exit fee
due on maturity over the life of the loan from 2022 resulting in $409,000
charge recorded within interest expense. The Company incurred and capitalized
$93,000 of lender fees during the period. The current total loan balance is
$19,478,000 with an effective interest rate of 13.67%.
The loan agreement provides that the Company comply with certain financial
covenants based on minimum levels of aggregate revenues, EBITDA, and
consolidated unencumbered liquid assets, as defined in the loan agreement. At
30 June 2025, the Company was in compliance with all such covenants.
8. Share-based payment schemes
The Group operates employee share option schemes that are accounted for as
equity-settled share-based payments. There were no new awards granted during
the period ended 30 June 2025. Total compensation cost arising from employee
share schemes for the six months ended 30 June 2025 and 2024 was $55,000 and
$5,077,000 respectively in the Unaudited Condensed Consolidated Statements of
Operations.
9. Commitments and Contingencies
The Group is party to a non-cancellable contract with a vendor where the Group
is obligated to make future minimum payments under the terms of the contract
for work due to occur. Contracted payments amount to $264,902 for the
remainder of 2025 and $103,160 in 2026.
10. Significant events after the reporting date
On 4 July 2025, the President of the United States signed H.R. 1, the "One Big
Beautiful Bill Act," into law after the balance sheet date. These changes have
not been reflected in the Company's income tax provision for the period ended
30 June 2025, The Company is currently evaluating the impact of the new law on
future periods.
The Company amended the covenants on its SWK loan in August 2025. The
covenants are tested calendar quarterly and include (1) Minimum Consolidated
Unencumbered Liquid Assets being the greater of $2.0 million and last three
months Operating Burn (mainly consisting of operating cash out flows plus
expenditures for property, plant and equipment); (2) Minimum Revenue on a last
twelve month basis of $62.7 million as at 30 September 2025 increasing
quarterly to $64.7 million as at 31 December 2025 and reaching $72.5 million
from 31 December 2026 onwards; and (3) Minimum EBITDA on a last twelve month
basis of $5.5 million as at 30 June 2025 increasing quarterly to $6,000,000 as
at 31 December 2025 and reaching $6.8 million from 31 December 2026 onwards.
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