TSP Advanced Technologies (AQUIS:TSP) — Final Results

0:01 Good morning, and welcome to the True Spine Technologies PLC final results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using 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 received during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now

0:32 like to hand you over to Chairman, Jeff Miller. Good morning to you. Good morning, and welcome, everybody, to the TruSpine results presentation for the year to 03/29/2024. Firstly, we have the presentation disclaimer, then the the summary. So the the year to March 2024 was a year of changing events and evolution for the company. New members of the the board came in at the end of the the period.

1:21 And I think having had now six months on the board, All of the the new board members are increasingly confident of the future prospects for the the company. The regulatory process continues and will be expanded in 2025, and we'll come on to that. The company is now fully aligned once more with the IP inventors. The board is going to be rationalized in the coming months. The balance sheet has been strengthened and will continue to be strengthened, and we believe that the outlook remains positive for the company.

2:15 On the regulatory approval process, during the period under review, the FDA application was submitted. The FDA has raised a number of points that it wishes us to address as part of the the process, and we're working with our US colleagues to address these issues. I've said on a number of occasions since taking the helm that we're no longer going to provide a running commentary on the FDA process, but we will, of course, provide an update if there's any material news without delay.

2:59 We're planning a application in Europe, and we will have further news on that in the months to come. We're looking at commercialization strategy across The US and Europe as we we move through the regulatory process. On the intellectual property, the approach that the company took during the year to March 24 was a very adversarial one. It's not one that I was entirely comfortable, was the was the most constructive way forward.

3:45 And since the changes in the board, we've taken a a very different approach to the inventors of the the IP and look to to bring them back into the fold. So Frank Baum and the rest of the the US team are now working with us to take the company through the regulatory process and on to commercialization. The company will look to enhance its already strong IP position with complementary technology as we move forward.

4:21 On corporate governance, I think it's important to understand that rather than being something which is just a a buzzword that people use, If used correctly, it can be an essential tool to ensure that there is effective decision making. We can maximize productivity, and we can ensure clear accountability. I think these are things which in the past, have been somewhat lacking. The new board members that came on at the end of the period possess all the skills necessary to run the company.

5:08 And Norman Lott, Nick Patel, and Tim Evans will be standing down from the board at the next AGM, the notice for which should be going out in the next week or so. We have said in the results that we will be giving further details of The US corporate governance that we intend to to bring in for the same reasons that we've reorganized things in The UK. The results themselves, the loss after tax was 561,000 for the year versus 654,000 the previous year.

5:58 The consolidated net assets, which is almost exclusively the intangible asset value of the the IP, was broadly unchanged from the previous year. Cash and cash equivalents were a 100,000 higher at the end of the this year than they were at the end of the previous year. And during the period, the company had taken steps to bolster the balance sheet. There had been 427,000 added in both equity and convertible loan, and there was 200,000 of debt, which was swapped for equity just before the the period end.

6:45 We do expect to to add further equity to the business in order to provide us with the working capital required to meet the the goals that we want to achieve. We will, as we have said previously, look at ways for all shareholders to participate in any further fundraising. Now I'd like to hand you over to Samuel Organzalu, who's one of our other directors, who will now take you through the technology itself. Good morning. The the essence of TruSpine technology is, I guess, as it says on the name, we aim to keep the spine true, which means we're trying to preserve nature's design.

7:39 The platform and and its implementation essentially means that we are not altering the bone anatomy, which is where our innovation is. We we we're not using screws or staples in our fixation

7:56 devices to the spine. Our system is therefore, we believe, safer, faster, and some surgeons say easier to install. Some of the key points with regards to our technology are that it's minimally invasive, by which we mean the incision and the space required to fit the devices is much less than fitting a screw based system because you you you don't need the space. You don't need the extra space to put the screws in because we're going clamping directly onto the bones. It also means that the risk of infection is much reduced because you're not opening up the body or the back as as you would do with a screw based system.

8:52 As part of all that, it allows the body and it allows the surgeon to preserve the biomechanical integrity of the patient. So it means that they can still move the back and the joint in a similar way that they could do before.

9:14 One of the other very, very important issues is fibrosis, otherwise known as scarring. So when you open up the body, when you close-up again, the body tries to heal itself, and it has an accelerated healing profile, which means it lays down scar tissue. By having a minimally invasive system,

9:40 we've reduced a lot of the possible complications. It also means that we've reduced the. And the other I guess, the idea behind all of this this this whole whole platform is that the patient will recover faster because, you know, you reduce the propensity for infection. You reduce the scarring potential. It's safer. It's quicker, and it's minimally invasive. So then looking at our specific technologies. The one we our initial our initial technology, the one that's in with the FDA at the moment, is our Cervilox system, which is based at the top of their cervical spine starting at c one, which is right right at the top here. And this system fix fixes the the way way the spine moves and hold it in place and creates stabilization right at the top of the spine.

11:01 This will be followed by our system called Fassiloc. Give me a okay. Yeah. This will be followed by a system called Fasiloc. And where Fasiloc is positioned is below the cervical spine in the lumbar and thoracic region. So it provides stabilization along the larger vertebrae in that in that region. And our our final system is grasp. Now what grasp does is it allows surgeons to decompress the spine in situations where there are protrusions or the cervical vertebrae is squeezing on the spinal cord.

11:58 So our system allows the surgeons to open up the vertebrae and decompress the spinal cord. And it's it's very novel in the sense that it also protects the spinal cord as part of the installation of this particular innovation.

12:19 So, again, the strategic advantages are it's minimally invasive, lower infection risk, part a faster patient recovery. Those are crucial in any operation, but especially in a spinal operation.

12:41 So looking ahead, we have we have our dedication to developing proprietary mill minimally invasive technologies. We remain committed to advancing our our novel technologies, and we are looking at complementary technologies, which will allow us to be in a position where the true spine suite of solutions, hopefully, can sit on every surgeon's table. Thanks, Sam. So just in in summary then,

13:31 The company has the nascent potential to revolutionize the spine stabilization market. However, historically, it has tried to do too much, too quickly with too little capital. The new board is looking to reset this and to ensure that we have an adequate capital base from which to achieve our company goals. We want to make sure that those goals are clearly defined, that any timelines that we give are achievable, and we want to ensure that there is clear responsibility to ensure that we have accountability of those that are actually doing the the work.

14:30 These are not things which were necessarily in place in the past, which is why the company finds itself where it does today. I think the prospects for the business are as exciting today as they were at the time of the company's admission to Aquis, and we look forward to the future with confidence. That concludes the formal part of the the presentation, and, we'd like now to move on to That's great, Jeff. Samuel, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the top right corner of your screen. While we take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via our investor dashboard.

15:28 Jeff, Samuel, we have received a number of questions both pre submitted and throughout today's meeting from investors. And if I may start the Q and A session with the following question. Are True Spine still working with Frank Bowen?

15:41 And if so, in what capacity? Thanks. Yes. Frank is a is a key member of our US team. Sam and I have just flown back this morning from an off-site which we had over the weekend with the members of the the US team to discuss both the the short term and long term strategy of the business.

16:10 And as we have have said in the announce in the announcement of the financials, we are going to give further details of how we're going to organize The US corporate governance at the forthcoming AGM. Thank you for clarifying this. Next question we've got, what have the company invested over a £100,000 in stated in the financial statement? So the £107,000 of increase in assets was an increase in the intangible assets that that I referred to earlier. That breaks down between £56,000 in development costs and £51,000 in patent rights.

17:03 That compares to 300 and 55,000 and 8,000, respectively, in the previous year. Thank you, Jeff. How have TruSpine made such a large loss in the last year? What has the money been spent on? And what income do you have to justify this? So the full breakdown of the administrative expenses, which account for all of the the losses of the company are shown in note six to the accounts. And so you can see the details fully in in there. The losses were 22% down on the previous year at 656,000 versus 846,000 in 2023.

17:56 These costs reflect the running costs of the business. And until we have regulatory approvals for our products, we're not expecting to have any offsetting revenues. Thank you. Moving on topics. Since starting your role as chairman, do you feel the company now has a better executive management in place? I I think we have a very strong management team now in place that has been significantly bolstered by the addition of the the US team coming back on board. So, yes, I think we have a very strong team. Another quick question for you here is for those that are unaware, can you clarify about the shareholding?

18:44 Sure. So my shareholding is currently 14,111,828 shares as as shown on the website. And I also hold a $160,136,573 pounds of our convertible loan notes, which will convert by the end of June next year into 9,104,866 shares, which will take my holding to 23,216,666 shares, which represents 14.3% of the enlarged share capital.

19:33 Perfect. Thank you very much. Next question. Are there any hidden large shareholders investors should be aware of? The the straightforward answer is no. The there is a full list of shareholders over 3% and the shareholdings of all the directors on the the website. There are no shareholders above 3% that are not listed on the website, and it is something which the company regularly reviews. It has online access to its share register. So there are no large shareholders that haven't been disclosed to the market. Thank you. Next question, you have touched on during the presentation, but in case there was anything to add here, the current situation regarding FDA clearance.

20:29 Yep. As you say, we have we have touched on it in the the presentation. We've now got the the US team have reengaged on the application for server lock. We expect because we now have a broader range of resources to to apply to the application that we will be looking to bolster the existing application with the help of our our US colleagues. We have said that we won't be providing a running commentary on the FDA process, but we will, of course, update if there's any material changes without delay as required by our by Aquis.

21:26 And it is something that we keep our financial advisers fully appraised of the position in order that they can advise whether or not there's any requirements to make any announcements. Thank you, Jeff. Next question is on IP, which you also covered during the presentation. What is the position regarding ownership of the IP? So the position on the IP ownership has always been clearly described by the company since its admission to to Aquis. There have been suggestions in the past that there are question marks over the the IP ownership.

22:13 The company under the previous management took a a very adversarial approach to the US team, which added significant uncertainty over the ownership of the VIP. We've taken the reverse approach to ensure that there is no question that this is a clear position that the company has its IP, which Sam has has taken us through this afternoon or this morning. And we don't believe that there should be any question now over the the ownership of that IP. Thank you. Why was it necessary to issue more equity?

23:01 The company needs capital in order to make its way through its regulatory approval process initially in The US and prospectively in Europe. We will continue to to look at the the position. Obviously, how dilutive any fundraising is will depend on where the share price is at that time. Thank you. I believe you have answered the next question. Will you be seeking further funding to support working capital going forward? We'll we'll continue to to review the the position and make any decisions as and when.

23:47 Thank you. How likely is it that TrueSpine will need to be wound up? It's not something which is under any consideration by the board. Thank you very much. Do you feel Aquis is the right exchange to be quoted on right now? I I think Aquis is a very suitable market for emerging growth companies like TruSpine. So yes. Perfect. Thank you. Turning on to the next topic. Given the founders are US based and that there are US shareholders, are there any plans to dual list on the OTC exchange? It is something that we will look at. And if any decision is made in that regard in in the future, we will, of course, let the market know.

24:39 What near term milestones are you aiming for to end 2024 and in q one twenty twenty five? The regulatory approvals that we will be looking for still remain uncertain in terms of timelines. So I wouldn't like to to say that we would expect definitive news on on anything in particular, but I would say that by the end of the current financial year of the the company, we would expect to see material progress in that regard. And as we look into 2025, we then look to to see some definitive news on the commercialization process.

25:29 Perfect. Thank you. The next question is, is Linco Tech owned money by the company? We did owe some some money at the end of the the period under under review, having confirmed the amount that was owed to Linkatec with the company itself. That's been settled, so we don't owe any money to Linkatec as of today. Thank you very much. Next question. Has the company received any indications of fraud since inviting shareholders to come forward with any information? No shareholders have brought any information forward that has given us any indication of fraud within or by the company.

26:24 I continue to invite any shareholder with any specific information they believe that demonstrates any wrongdoing by anyone within the company to to come forward and share that company that information with the company. Thank you. Turning on to the next question. Is Mike Unwin a shadow director of the company? This is a subject which has come up several times. But to be absolutely clear, Mike Unwin has no role in the company, remunerated or otherwise. Neither does any entity in which Mike Unwin is involved have any role within the company remunerated or otherwise.

27:15 He's never acted as a shadow director within TrueSpine, and that remains the case. Thank you. Moving on to a live question here. With regards to the IP situation, I understand an agreement was signed with the inventors. But given their prior actions, it seems like a high level of oversight should be had over them. Is there a plan in place for the company to act in case the same disputes arise again? As I said in the the presentation, we will have a a proper corporate governance within the The US entity, we will ensure that we have very clear reporting lines and responsibilities.

28:10 So we're not going to run into the problems that have occurred in the past, which I would say are were down to lack of transparency across the The UK and US operations, which led to the misunderstandings that we had previously. So we will be able to explain explain more at the the AGM. As I said, we've Sam and I have just come back from spending two days with the US team, making sure that we we are all on the same page and all working together for the same goals.

28:58 Thank you. And one last question here, which I believe you have touched on as well. Are there plans to offer shareholders opportunities to participate in future fundraising rounds to maintain their shareholding proportion? Simple answer, yes. Perfect. Thank you very much, Jeff, Samuel. Thank you for addressing those questions for investors today. And of course, the company can review all questions submitted today, and we will publish those responses on the investment company platform. But before we redirect investors to provide you with their feedback, which I know is particularly important to the company, Jeff, could I please ask you for a few closing comments? Sure. I'd like to to thank everybody for for joining the presentation today.

29:43 I hope that we've been able to give a flavor for the excitement that we we feel about the prospects for the for the business and would encourage anybody that that wants to to to reach out to if they have any further questions that they need to answer in the future. Fantastic, Jeff. Samuel, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of True Spine Technologies PLC, we would like to thank you for attending today's presentation, and good morning to you all.