Proteome Sciences (LSE:PRM) — Annual General Meeting

0:01 Good afternoon, ladies and gentlemen. Welcome to the Proteum Sciences PLC Annual General Meeting. Throughout this recorded meeting, attendees online will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab just situated on the right hand corner of your screen. Type in your questions and press send. I'd now like to hand over, if I may, to Christopher Pierce, Chairman. Good afternoon, sir. Thank you very much indeed. Ladies and gentlemen, now it's noon. Thank you for coming here to to attend our annual general meeting. I'm Christopher Pierce, as you heard, chairman, and I shall be chairing the meeting today. May I introduce those members of the board to you who are at this meeting? On my right, I've got Mariola Songin. To his right, we're very pleased to welcome for the first time, Abdul Amari, who joined us as finance director in September of last year.

0:53 To the back to my right is Martin Diggle. Behind me, Richard Dennis, our chief commercial officer, Ian Pike, chief scientific officer, and Victoria First, our company secretary. Unfortunately, Roger McDowell, one of our directors, is unable to attend the meeting, and he sent his apologies to you all. Quorum for this annual general meeting is two members. As there are more than two members present, I declare the meeting open. I'll read you a short statement, which has been released on the RNS this morning. Questions relating to the AGM statement may be asked before moving to the formal business of the meeting. PROTEOME SCIENCE has had a strong performance in the year ended 12/31/2022, with total revenue increasing by 52% to 7,780,000.

1:46 And in '21, it was 5,130,000. Biomarker services grew by 45% to 2,750,000, and TMT TMT PRO revenues increased 56% to 5 point naught 3,000,000, with adjusted EBITDA rising 479% to 2,430,000. The cash position increased by 1,600,000 to 3,990,000. These results include the costs incurred for the investment we've made in additional instrumentation and skilled personnel in our workforce to promote the strategic decision to introduce our single cell proteomics platform in 2023 and to develop to undertake the development of new and complementary range of chemical tags to our TMT TMT pro reagents.

2:38 Both new offerings are expected to expand our growth in revenue and recognition of our expertise in the marketplace. The board is confident that the progress over the recent years has created an excellent platform for further development of the group. Following the investment made over the last two years, a strong order book, new projects, high customer interest, a healthy cash position, and recently announced expansion into The US, the group has a strong base for 2023 and beyond. PROTEOME SCIENCES is well set to achieve a step change in growth, which gives the board increased confidence that the business can can continue to grow significantly revenue and EBITDA in the coming years. That ends the AGM statement.

3:26 From the proxies received today, totaling 55,000,000, 99.9% of the votes cast are in favor of all the resolutions one to six. For this reason, I do not intend to read out the proxy results after each resolution. Unless a poll is demanded, each of the resolutions will be voted on a show of hands. This being the case, I can just remind those present that on a show of hands, each member and appointed proxy has one vote. The notice convening the meeting has been in your hands for the statutory period. With your permission, I'll take the notice as read. Resolution one, is receipt of financial statements. The first resolution in the notice is to receive the financial statements and the reports of the directors and auditor for the year ended 12/31/2022.

4:17 If you will turn to pages 25 to 29 of the financial statements, you will find the director's report and the auditor's report is on page 30 to 34. With your permission, I will take these reports as read. Before I propose the first resolution formally, are there any questions? There being no questions, I now propose and this is an ordinary resolution receipt of the financial statements and reports. May I call upon you by a show of hands to indicate first those in support of the resolution? Thank you. Those against? Fine. I now declare the first resolution carried.

5:03 Resolution two. The second resolution in the notice concerns the reappointment of Roger McDowell as a director. I apologized on his behalf. He's unable to attend the meeting today. Roger retires in accordance with article 109 b to the company's articles of association, which requires one third of the directors to retire at each AGM. Roger McDowell has stated his willingness to continue in office. Before the resolution is put to the vote, are there any questions? I now propose as an ordinary resolution, resolution two is set out in the notice to reappoint Roger McDowell as the director. May I call upon you by a show of hands to indicate first those in support of the resolution? Thank you. Those against? I now declare the resolution universally carried.

5:52 Resolution three. The third resolution in the notice is to reappoint Abdulghani Omari as a director. Abdul retires in accordance with article one one four of the company's articles of association, which requires that any director appointed between annual general meetings must retire at the next following AGM. Before the resolution is put to the vote, are there any questions? I now propose as an ordinary resolution, resolution three, as set out in the notice to reappoint Abdul Omari as a director. May I call upon you by a show of hands to indicate first those in support of the resolution? Thank you. Are there any against? I now declare the resolution carried.

6:40 Resolution four. The fourth resolution, the notice is to reappoint Cooper Perry Group Limited as the company's auditors and to authorize the directors to fix the auditors remuneration. Before that resolution is put to the vote, are there any questions? I now propose as an ordinary resolution the reappointment of Cooper Perry Group Limited as auditors of the company until the conclusion of the next annual general meeting and to authorize the directors to fix their remuneration. May I call upon you by a show of hands to indicate first those in support of the resolution? Thank you. Any against? I now declare that resolution carried. Resolution five, the fifth resolution in the notice of the meeting is an ordinary resolution to authorize the directors to allot shares in terms of section five five one of the Companies Act 2,006 up to the limit as set out in resolution six of the notice.

7:40 Before that resolution is put to the vote, are there any questions? I now propose as an ordinary resolution, resolution five as set out in the notice of the meeting. May I call upon you by a show of hands to indicate first those in support of the resolution? Thank you. Those against? Hold on. Thank you. I now declare that resolution carried. Resolution six. The sixth resolution in the notice of the meeting is a special resolution to disupply shareholder statutory preemption rights in relation to the issue of shares subject to certain defined limits as set out in the notice. The full extent of the resolution and the applicable limits set out in resolution six of the notice.

8:26 I now propose as a special resolution, resolution six, set out in the notice of the meeting. May I call upon you by a show of hands to indicate first those in support of the resolution? Thank you. Those against? Thank you. I now I now declare the resolution carried. This completes the formal business of the meeting. Are there any further questions? Yes. Thank you. I'm just disappointed. We're glad you've come. I'm glad you asked this question because I see I read in the beginning of your very comprehensive. The principal risks and uncertainties.

9:13 At the bottom of my mind, this is commercialization of activities, uncertain whether our range of contract printing incentives will generate sufficient revenues, etcetera. And it seems to what you've obviously done recently, your spending with.

9:25 My key question is this. When you when you win business, when you get something new, you're a rate caps of the air, to what extent do you think, well, actually, that's gonna cost us a heck of a lot of do you have capacity usually simply to accept that business and do it without incurring more capital? That's your point. So that's what that's question I'm referring to is how easy is it to penetrate your market would you consider? Very good. I shall start from a high level, and then I shall pass across to my learned colleagues to go and answer more comprehensively if you need to know any more. We have capacity currently in excess of our requirements in Europe for the when I say for the foreseeable future, we progressively upgraded the capacity that we have in place. And clearly, with the advancement of technology and so on, it it is a a moving curve.

10:26 And clearly, both in terms of the equipment side and particularly the bioinformatics side, we have to pay continued attention to it. But it's a progressive thing rather than something which is extraordinary. The announcements which we made on Friday about opening a new facility in The US is a continuation of that. We highlighted in the release that one of the problems there is is the issues relating to customs, to transportation, and the time and the inconvenience that that actually carries. A lot of our business currently is already carried out in The US market, but we believe we know that we would get far more business from The US entity on the basis that we had a local facility.

11:17 Addressing the second part of your question, opening a facility for us will largely be a marginal cost because it is not going to be the same sort of size or stature of the facilities in Germany where we have a chemistry facility and various other bits which are not required. So it will be, something which requires progressive investment over time. It will not start with a large workforce. Very much the informatics side will be processed centrally from our European facilities. So it is a relatively low cost, low risk facility for us to open, and we're very encouraged at this point in time that the demand is in The US given in the pharma world and biotechnology that broadly 50% of it exists in North America. So we think we will benefit significantly at a low cost entry point where we will hope to be able to start generating reasonable revenues from the end of nine 2023.

12:21 We'll probably be open in the first quarter as our the last sorry, the fourth quarter, and that we will start seeing revenue pick up in 2024. So the answer is it is not particularly capital intensive. We have not got big commitments to go and do it. We think it will considerably enhance our revenue capabilities on the biomarker services activity, which is growing very strongly as you can see by the performance we've achieved the last two years with it. Thank you. And and my second part, my personal last part, was the penetration point. So to what extent would you consider that your business is easy to penetrate? And I I think I we're a 100 guys that that that Okay. That a million together and and your business.

13:07 The barriers to entry are very high. It is incredibly skilled, high precision, very specialist. The reason why pharmaceutical companies are using us to go and undertake this work for them is because they don't have the scale or the skill sets in volume applications to be able to deal with the technology as such. There are certainly, there will be academic groups who can actually do some of this work in house, but not on a commercial scale. So we would say that these barriers to entry are high. We have a unique advantage that we have developed, the tag TMT, TMT PRO, which I mentioned, in the AGM statement, where we have we we have a commanding global penetration in that marketplace.

13:58 The intellectual property we have which supports and defends that lasts until the mid two two thousand and thirties. So we're comfortable that anybody using that type of tagging technology will have to come and request from us and obtain licenses in order to go and move into that space. So we were in an unusual position that we have this command over the the tandem mass tagging. Very good. So no more questions in the room. We we only have two online. I would encourage people who are with us online, use the q and a tab in the control window and type your questions in there, and and we'll answer them if we can. So the first question that we have received is someone saying that they're concerned about the loan from mister Pierce, and could we share our thoughts on that?

14:55 Yesterday? Well, I think I I think I have a gamekeeper and poacher, you you can perhaps answer. I I I think I have a conflict of interest here. Just very simply, historically, the company would not have been able to continue in operations in the early mid two thousands, between 2005 and 2010 without the support I gave. If you recall, the system, particularly the investment community, was not investing at all, and the company would not have survived. Clearly, I wanted to see the success of the business materialize. And as you can see reflected by the performance of the numbers and how our crash cash is now growing significantly within our balance sheet, that at some stage in due course, there will be the ability to go and see the disappearance of those loans. But what I do not want to do is inhibit the opportunities, particularly for us to maximize, I think, the advantage we have in the marketplace in terms of our proteomic services business, including the control we have on the tagging market.

16:10 Thank you, Chris. The other question we have is, are there any plans for a US listing? And a clarifying comment from that that's being asked from someone who is, an institutional investor with an HQ in New York. So perhaps a leading question tagging the business, but Krishna. This is something that, we review from time to time. We've had a number of approaches. Given at the moment the size and the specialist area within which we've operated, we have not felt up until now that it's been appropriate to pursue an American listing because the requirements administratively are very onerous on a small company.

16:58 I think all may change down the road in the future simply because if we have a US facility ourselves over there and it is going to be successful, which, we we very much hope and anticipate, then I think, all things will be re explored again. But just to go and say, I think our technology is probably better understood in The US, and by US investors than it is necessary in Europe. And we think that should we go down that route in the longer term that, typically, you get a much higher value and rating for your business. So this is something clearly all of the directors are concerned about. We think we have a successful business. We have a very good niche position in it. We're very optimistic in terms of how the future's developing.

17:47 And so the answer is yes. We will go and look. But we found historically that the cost of entry to do this is a, expensive, and b, it's very onerous in terms of the amount of annual additional annual reporting we have to do to comply with those requirements. Thank you, Krishna. And sadly, I'm all out. Haven't done anymore. And I think that's probably a testament to the fact that, you know, a month or so ago, we did the investor meets company presentation. We had a lot of questions on there. So if you're online for the AGM but you haven't seen that, I believe you can review that. There should be a link from our website. Oh, and we have one last question that we'll refer to later. Is the CEO happy? Yes.

18:34 I believe so, Marietta. Would you like to answer that? Of course. I mean, the performance in 2022 was excellent. So it was a very exceptional year. I think we have a great basis for everything to come, and I think the market should really take this as a positive sign that that we are opening the US lab. We wouldn't do that if we hadn't really strong confidence that this is a business that is going and continue to flourish. Absolutely. So they're flooding in now. We have a we have a second late minute entry. Will PROTEOME SCIENCES US, Inc. Be a wholly owned subsidiary of PROTEOME SCIENCES PLC? The answer is yes. It is. Okay. No more to say. Okay. Well, thank you very much, Ian, for for managing that process, and, we're very delighted that we have been able to share the news and our prospects with you today, and as you said, by the previous website meeting which was conducted.

19:36 So I think it's now the we've completed the formal part of the business meeting now. I'd like to thank you all very much indeed for attending the AGM, and I declare the meeting closed. Many thanks to you all. That's great. Thank you, Christopher, and thank you to the board of PROTEOME SCIENCES. Ladies and gentlemen, please do not close the sessions. We'll now automatically redirect you for the opportunity to provide your feedback in order the company can better understand your views and expectations. This only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the board of PROTEOME SCIENCES PLC, we'd like to thank you for attending today's annual general meeting online. Good more good afternoon to you all.