2026 Interim Results

AOTI, Inc.

30 September 2026

 

30 September 2026

AOTI, INC. (the "Company" or "Group" or "AOTI")

2026 Interim Results

Significant progress towards obtaining Medicare coverage that will dramatically expand the growth potential for TWO2® therapy

Robust underlying business performance

AOTI, INC. (AIM: AOTI), a medical technology group focused on delivering outcomes-based care at home, by more durable healing of wounds and the prevention of amputations, announces its unaudited results for the six months ended 30 June 2026 ("the Period" or "H1 2026").

Financial Highlights

         Robust underlying revenue growth (excluding Arizona Medicaid) of 18.8% (H1 2025: 17.0%), and 10.8% on a reported basis.

o         Medicaid (41% of revenues) revenues grew by 21.5% on an underlying basis and 2.4% on a reported basis. Veterans Administration (VA), (57% of revenues) revenues grew by 16.0%.

         EBITDA grew 16.6% to $3.6m (H1 2025: $3.1m). EBITDA margin was 10.1% (H1 2025: 9.6%)

o         Impact of commercial team restructure with a greater focus on patient outcomes and sales rep productivity is still in the early stages of realisation.

         Positive operating cash flow at $0.9m (H1 2025: $4.7m outflow).

        Net debt at 30 June 2026 was $6.3m (31 Dec 2025: $6.5m).

Operational Highlights (inc. post Period)

         In July, the Durable Medical Equipment Medicare Administrative Contractors (DME MACs) on behalf of the Centers for Medicare & Medicaid Services (CMS), published the proposed Local Coverage Determination (LCD) for topical oxygen therapy (TOT). Once finalised, this transformational milestone will dramatically expand the US addressable market and growth potential for TWO2® therapy.

         Medicaid Provider IDs have now been obtained in 27 US states (FY 2025: 19) further underpinning mid- and longer-term growth.

         Large real-world study in 3,126 patients published that further demonstrated superior durable healing of chronic wounds with AOTI's TWO2® therapy, bolstering the growing evidence base and supporting the Company’s outcomes-based value proposition.

Arizona State Medicaid:

As noted in the July Trading Update, the Company ceased treatment of new Medicaid patients in Arizona from 1 April 2026 and our actions to obtain formal Medicaid coverage policy in that State for our therapy and recover historical claims remain ongoing. Though timing is uncertain, the Board remains confident in its ability to collect historical debt from Arizona Medicaid and will update the market as appropriate. Consequently, in September, the Company reached agreement with Runway Growth Finance Corporation ("Runway") (who acquired SWK Funding LLC) to revise the revenue and EBITDA covenants in its loan, as the covenants had been set prior to the decision to cease taking on new Arizona Medicaid patients.

Outlook:

         2026 is a transformative year not only as we move towards the Final CMS LCD and resulting mandated Medicare coverage, but also due to optimising our sales structure and execution to deliver the full potential of our dramatically expanded US addressable market opportunity.

         We expect full year 2026 EBITDA to be in line with current consensus[1] and are confident with our net debt position and cash flow outlook for the remainder of the year.

         We continue to expect full year top-line growth to be in line with our guidance provided at the time of our full year results of underlying mid-teens revenue growth i.e. ex- Arizona Medicaid (low-single digit reported growth).

Dr. Mike Griffiths, Chief Executive Officer & President of AOTI, said: “Despite having to make the difficult decision to cease treating new patients from 1 April in Arizona and continued macro headwinds, I am pleased that we still delivered robust underlying revenue growth and profitability.

Impending Medicare coverage will be transformative for AOTI, significantly expanding access to our therapy. We are well positioned to access the vast majority of the US patient population, and to drive growth with our already market-leading position in the topical oxygen therapy market segment.”

Analyst Presentation

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: [e-mail].

Shareholder Presentation

A presentation for all existing and potential shareholders will be held later today via the Investor Meet Company platform at 11:45 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.  

END

AOTI, INC. Dr. Mike Griffiths, Chief Executive Officer Jayesh Pankhania, Chief Financial Officer	[phone] [e-mail]
Peel Hunt LLP (Nominated Adviser and Joint Broker) Dr. Christopher Golden, James Steel	[phone]
Panmure Liberum Limited (Joint Broker) Emma Earl, Will Goode, Mark Rogers Rupert Dearden	[phone]
FTI Consulting (Financial PR & IR) Ben Atwell, Simon Conway, Natalie Garland-Collins	[phone] [e-mail]

ABOUT AOTI, INC.

AOTI, INC. was founded in 2006 and is based in Oceanside, California, US and Galway, Ireland, providing innovative solutions that deliver outcome based care and 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 (TWO2®) 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 hospitalisations and 71 per cent. reduction in amputations over 12 months. TWO2® therapy can be administered by the patient at home, improving access to care and enhancing treatment compliance. TWO2® 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. TWO2® 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

CHIEF EXECUTIVE OFFICER'S REPORT

The first half of 2026 saw robust revenue growth across all segments of the business. We delivered high-teens underlying revenue growth against a backdrop of ongoing US healthcare and One Big Beautiful Bill Act (OBBBA)-related headwinds continuing to affect our Medicaid expansion plans. Underlying performance was strengthened by our significant commercial restructure, which we continue to embed and is in the early stages of realisation, alongside a greater focus on patient outcomes and sales rep productivity.

On an underlying basis, excluding Arizona Medicaid, Medicaid revenues grew 21.5% and on a reported basis by 2.4%. VA delivered strong revenue growth, with revenues increasing 16.0% year-on-year.

Importantly, in H1 2026 we have now started to see a positive operating cash flow due to a strong VA performance and improved working capital. We ceased taking on new patients in Arizona Medicaid in April, which has improved our working capital position.  

Veterans Administration

As highlighted earlier, the impacts to the VA from the US Department of Government Efficiency (DOGE) efficiency programme from early 2025 that impacted the processing of purchase orders for our therapy, have now abated. The strong revenue growth is expected to continue as we penetrate this segment further.

Medicaid

As a result of ongoing US healthcare headwinds affecting our state Medicaid expansion plans, our near-term growth efforts remain focused on our established Medicaid states. New York, where state mandated coverage is in place, remains the primary revenue contributor alongside meaningful revenue from New Jersey. We have continued to increase the number of Provider IDs and now have Provider IDs in 27 states. This ongoing increase further underpins this segment’s mid-and longer-term growth prospects.

As we communicated earlier in the year, the Company ceased treatment of new Medicaid patients in Arizona from 1 April, where prolonged disruption to billing and payment from insurers in this state increased the Company receivables balance. This action limited debtor build‑up in H1 2026, reduced working capital needs, and no longer masks the company’s otherwise positive operating cashflow. Efforts to solve the issues in Arizona Medicaid remain ongoing.

Other 

This segment includes areas of the business that are in the early stages of commercial traction and is expected to remain a non-material revenue segment for the near to medium term. The largest area in this segment is our international business where we are present in key strategic markets (UK where we received a positive NICE treatment recommendation for DFUs, Germany, Saudi Arabia) at an early commercial stage.

Large real-world study published

Superior durable synergistic healing of chronic wounds with TWO2® therapy demonstrated

In April, findings from a large multicentre retrospective cohort study were published in the Journal of Vascular Surgery-Vascular Insights evaluating the effectiveness of TWO2® therapy in the treatment of chronic lower extremity wounds. The study shows 64.8% overall complete healing rate and a remarkable 2.7% reoccurrence for chronic lower extremity wounds when using AOTI's intermittent TWO2® therapy as an adjunct to standard of care in hard-to-heal wounds that had failed to heal with other advanced wound care for an average of seven months. It encompassed 3,126 patients with broad wound types, including diabetic foot ulcers (DFUs), venous leg ulcers (VLUs), arterial ulcers and atypical wounds, building on previously published randomised clinical trial data and real-world evidence as to the therapy's efficacy in healing DFUs.

These results build on our growing body of evidence comprising our robust randomised controlled trial and earlier real-world evidence validating the role our unique therapy plays in improving patient outcomes in a meaningful way. In addition, multiple published peer-reviewed studies have highlighted the cost-saving potential of using TWO2® as an adjunctive at home treatment for lower extremity wounds.[2]  

Significant commercial restructuring and outcomes-based care at home model supporting sustainable long-term growth and readiness for full US coverage, scaling and reimbursement

The commercial restructure included refocusing our sales teams from a market segment model to a geographic model, enabling them to capture opportunities more effectively across VA, Medicaid, Commercial, and in time Medicare. 

The benefits of the restructuring continue to be embedded positively across the business, where we have seen gains in performance and productivity across the VA and New Jersey Medicaid. Further time will be required to optimise the structural changes in New York, where they have been most extensive, resulting in moderated growth in the period which is expected to continue in the near term.

Executing today while continuing to recruit and train our sales team and develop a best-in-class commercial infrastructure remains critical to our success. Our existing commercial infrastructure covers the majority of the US population and can be rapidly leveraged following the CMS LCD becoming effective without the need for a significant ramp-up of sales operations in the near term.

Critical to our outcomes-based strategy and successful long-term growth, is how we create true “stickiness” with prescribers and payers. Meaning repeatable, evidence backed adoption from prescribers/clinicians that trust our therapy and from payers who see the clinical and economic benefits.

Leveraging our established commercial infrastructure, combined with enhancing our patient engagement through our at-home model, will enable greater sales rep productivity as coverage expands, with many of the same prescribers and payors operating broadly across the patient segments.

Our Eyes on the Wound™ platform is an important component of our strategy, supporting adoption and delivery of our outcomes-based at-home model, and strengthening engagement with patients, prescribers and payers. Together, the capabilities of this remote therapy monitoring technology and patient app underpin a scalable and sustainable growth model as we move towards broader Medicare coverage and reimbursement.

The improvements in performance as a result of the commercial team restructuring are expected to become increasingly meaningful into 2027, driving revenue growth and profitability levels. This sustainable, cash-generative growth model enables AOTI to fund this expansion organically over the near to medium term.

Building a scalable outcomes-based care platform

AOTI is at the forefront of addressing the unsustainable growth in global healthcare spending and the need for outcomes-based care. The Company currently operates in the large and growing Advanced Wound Care market where AOTI’s differentiated multi-modality topical wound oxygen TWO2® therapy focuses on the high-growth, high-value, ‘hard-to-heal’ wound care segment.

AOTI is the clear market leader in the topical oxygen segment with a 75% market share, driven by the unique and differentiated value proposition of its intermittent topical oxygen (TWO2®) therapy which has been demonstrated in multiple substantive peer-reviewed clinical studies to deliver superior durable healing outcomes when compared to continuous topical oxygen therapy and other advanced wound care treatments.

As healthcare systems increasingly prioritise measurable clinical outcomes and cost savings, our integrated outcomes-based platform delivers these through the combination of three pillars: (1) a clinically effective, differentiated therapy, (2) patient data analytics and treatment adherence, and (3) direct patient access at home. Together, these significantly differentiate AOTI from other solutions, creating significant strategic advantage for the Company, meaningful barriers to entry for competitors, and the ability to deliver cost saving and clinical outcomes to the full value chain of patients, caregivers, prescribers, clinicians and payers. This platform is scalable and underpins our long-term sustainable growth strategy through delivering a unique, disruptive value-based care proposition.

·           Differentiated therapy with proven long-term clinical outcomes & health economic savings

While other treatments may help heal chronic wounds, TWO2® therapy has demonstrated clinical superiority and more durable wound healing with lower resultant rates of recurrence, hospitalisations and amputations, leading to an overall reduction in cost of care. This is a key component of the Company’s outcomes-based care proposition.

·           Direct patient access to chronic care patients

As an accredited Durable Medical Equipment provider, unlike our competitors, AOTI has direct relationships with patients in their homes, enabling access whilst helping to facilitate effective treatment pathways for very comorbid patient populations through delivering truly engaged outcomes.  

·           Patient data analytics and treatment adherence through remote monitoring and real-time data capability

AOTI’s Eyes on the Wound™ platform has been developed to allow us to enhance patient and provider engagement with remote therapy monitoring and real-world AI driven data analysis that will enhance proactive interactions, patient adherence and new referrals to the therapy and stickiness with prescribers. The system is currently being rolled out in stages across the business and is setting the stage for an optimal ramp when Medicare comes online. 

Transformational milestone that will dramatically expand the US addressable market with significant growth potential

As previously announced, AOTI's approach to its market access and reimbursement strategy is structured around a three-phased expansion plan targeting sectors chosen for their highest prevalence of diabetes and chronic wounds, with reimbursement established as each phase is implemented. The initial phases covering the VA and New York Medicaid are generating significant revenue, and wider Medicaid expansion into other states is ongoing with Medicaid Provider ID now obtained in over half the States and potentially covering over 80% of all eligible Medicaid enrolees.

In July, the DME MACs on behalf of the CMS published the proposed LCD affirming that topical oxygen therapy is reasonable and necessary for Medicare enrolees for the treatment of diabetic foot ulcers that have failed to heal with four consecutive weeks of optimised diabetic foot ulcer care. This represents the third phase of our market access strategy and, once the LCD is final, will establish full US national coverage. Importantly, once finalised it will mandate coverage and reimbursement for c.70m Medicare beneficiaries (Americans over 65 years of age) who have as high as a 32% prevalence rate of diabetes and disproportionally higher (c.13%) rate of diabetic foot ulcers. This will also be catalytic for access to Medicaid and Commercial payer populations.

Finalisation of the LCD will not only open access to the very significant Medicare market, it is expected it will also improve and expand access to Medicaid and other US commercial and managed care market segments.

In time, AOTI’s addressable market is expected to include Medicare, Medicaid, US Commercial and managed care and VA segments. Access to these markets will expand the US addressable market by c.65-fold to c.$26bn.

CMS/Medicare Proposed Topical Oxygen Therapy LCD progress and timelines

Following the issue of the proposed LCD on 23 July, there was a 45-day public comment period which included a virtual open public meeting in August and intended to solicit stakeholder comments on the proposed language of the LCD ahead of its finalisation. During the meeting, all commenters were unanimously in support of the proposed LCD.

The formal public comment process concluded on 5 September 2026, and the Durable Medical Equipment Medicare Administrative Contractors, who are assigned by CMS the task of developing LCDs for Durable Medical Equipment, Prostheses, Orthoses, and Supplies, are now reviewing comments. The DME MACs must finalise the proposed LCD within a year of its publication date (365 days). Once the final LCD is published, there is a further 45-day notice period before coverage is effective.

Conclusion:

We have delivered robust underlying revenue growth despite sustained US healthcare headwinds. The positive proposed LCD is significant progress towards obtaining Medicare coverage and reimbursement, a milestone that will dramatically expand the growth potential for TWO2® therapy and be transformative for AOTI.

Dr Mike Griffiths

Chief Executive Officer

29 September 2026

CHIEF FINANCIAL OFFICER'S REPORT

Financial Highlights

$'000 (unless stated)	H1 2026 Unaudited	H1 2025 Unaudited	Change
Revenue	35,283	31,843	+ 10.8%
Underlying revenue (excl. Arizona Medicaid)	31,913	26,857	+18.8%
Gross Profit	31,321	27,913	+12.2%
Gross Margin (%)	88.8%	87.7%	+110 bps
Operating Expenses	28,777	25,942	+10.9%
Profit from Operations	2,544	1,971	+29.1%
EBITDA	3,578	3,070	+ 16.6%
Basic earnings per share ($ per share)	0.01	0.00	n.m.1
Diluted earnings per share ($ per share)	0.01	0.00	n.m.1
Operating Cash Flow	921	(4,693)	n.m.1
Financing Cash Flow	-	10,908	n.m.1
Net Debt	(6,291)	(5,396)	+ 16.6%

1 n.m – not meaningful

Revenues

• Robust underlying revenue growth excluding Arizona Medicaid was 18.8% (H1 2025: 17.0%). Reported revenues increased by 10.8% to $35.3m (H1 2025: $31.8m).
• Revenue growth was driven primarily by growth in the VA of 16.0%, which has seen growth improving following the impact of DOGE efficiency measures abating and supported by the commercial restructure.
• Underlying growth in Medicaid was 21.5%, with reported growth of 2.4% to $14.4m (H1 2025: $14.0m), and with this driven primarily by expansion in New York and New Jersey. Growth in this segment is continuing to be impacted by changes in the US healthcare system and OBBBA.

• Revenues in our Other segment were $0.9m (H1 2025: $0.5m) with growth from international markets and US commercial insurers.

Gross Profit

Gross profit was $31.3m (H1 2025: $27.9m), an increase of 12.2%. Gross profit margin increased by 110 bps from 87.7% to 88.8% due to more efficient use of controllers and concentrators and reduced consumable spend.

EBITDA

EBITDA2 is calculated as below:

$'000		H1 2026 Unaudited	H1 2025 Unaudited
Net profit		938	248
Income taxes		437	540
Interest (net)		1,156	1,117
Depreciation and amortization		1,047	1,165
EBITDA		3,578	3,070
EBITDA margin		10.1%	9.6%

EBITDA increased from $3.1m in H1 2025 to $3.6m in H1 2026. This increase was primarily driven by increased revenue, sales rep productivity and reduced commission costs being offset by investments to support growth and non-cash accounting provisions under the FASB CECL3 methodology.

EBITDA margin increased by approximately 50 basis points to 10.1% (H1 2025: 9.6%). The improved margin is due to the reasons above. 

The receivables balance increased to $24.3m (FY 2025: $21.8m) driven primarily by an increase in the Arizona Medicaid debtor balance as well as a relatively small increase due to increased trading in Medicaid and Other segments.

2 EBITDA is an unaudited non-GAAP measure: Earnings before interest, taxation, depreciation and amortisation

3 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)

Operating expenses

Operating expenses increased by 10.9% to $28.8m (H1 2025: $25.9m). This increase includes investments in headcount to support sales, market access and operations teams, which will support long-term growth. Other cost increases include travel related to sales activities, listing related costs, as well as non-cash CECL provision.

Other income and expenses include gains and losses on foreign currency and interest expense.

Interest expense on our loan with Runway was $1.2m (H1 2025: $1.1m).

Profit before tax

Profit before tax was $1.4m (H1 2025: $0.8m) and taxes were $0.4m (H1 2025: $0.5m).

Earnings per share

Basic earnings per share was $0.01 (H1 2025: nil) and diluted earnings per share was $0.01 (H1 2025: nil). The number of shares in issue was broadly unchanged in 2025.

Cash

Cash at H1 2026 was $13.8m (FY 2025: $13.4m), supported by VA revenues and better working capital performance. This was helped by the cessation of treating new patients from Arizona Medicaid from 1 April 2026. Net debt was $6.3m, a small decrease from the end of 2025. (FY 2025: $6.5m; H1 2025: $5.4m).

Trade Accounts Receivable

Trade accounts receivables increased to $24.3m (FY 2025: $21.8m). The increase is primarily due to increases in Arizona Medicaid debt, where the gross receivables balance is $18.7m (FY 2025: $15.6m).

Inventory

Inventory decreased to $4.0m (FY 2025: $5.1m) which was mainly due to deferral of purchases into the second half.

Operating Cash Flow

The Company showed a positive operating cash flow for the period at $0.9m inflow (H1 2025: $4.7m outflow). This has been supported by VA revenues, better working capital and cessation of treating new patients from Arizona Medicaid.

Short and Long Term Debt

The Company maintains a loan of $20.0m (FY 2025: $19.9m) with Runway, who acquired the original lender, SWK Funding LLC, in April 2026.

In September 2026, the Company reached agreement with Runway to revise the revenue and EBITDA covenants as they had been set prior to the decision to cease taking on new Arizona Medicaid patients.

The revised covenants are tested calendar quarterly and are (1) Minimum Consolidated Unencumbered Liquid Assets being the greater of $2.0m 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 $66.7m between 30 September 2026 until June 2027 and reaching $72.5m from 31 March 2028 onwards; and (3) Minimum EBITDA on a last twelve month basis of $6.2m between 30 September 2026 until June 2027 and reaching $6.8m from 31 March 2028 onwards. At 30 June 2026, the Company was in compliance with all required covenants.

JAYESH PANKHANIA

Chief Financial Officer 29 September 2026

Condensed Consolidated Interim Financial Statements (unaudited)

Condensed Consolidated Balance Sheet

(in thousands, except number of shares and per share amounts)

		30 June 2026 Unaudited	31 December 2025 Audited
		$’000	$’000
Assets
Current assets
Cash and cash equivalents		13,774	13,436
Trade accounts receivable, net		24,324	21,755
Inventory		4,013	5,082
Other receivables and prepayments		1,669	1,659
Total current assets		43,780	41,932
Non-current assets
Property and equipment, net		2,335	2,811
Intangible assets, net		9,813	9,579
Operating lease right of use assets		1,104	1,272
Deposits		28	26
Total non-current assets		13,280	13,688
Total assets		57,060	55,620
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable - trade		550	1,238
Accrued expenses		10,137	9,314
Deferred revenue		2,874	2,509
Current portion of operating lease liabilities		431	411
Long-term debt due within one year		1,393	-
Total current liabilities		15,385	13,472
Non-current liabilities
Long-term debt		18,570	19,857
Deferred income tax liabilities		1,438	1,438
Long-term operating lease liabilities		741	917
Total non-current liabilities		20,749	22,212
Total liabilities		36,134	35,684
Shareholders’ Equity
Common shares, $0.00001 par value, 106,359,163		1	1
Additional paid-in capital		35,171	35,119
Shares held by employee trust, at cost		(204)	(204)
Retained earnings (deficit)		(14,042)	(14,980)
Total shareholders’ equity		20,926	19,936
Total liabilities and shareholders’ equity		57,060	55,620

Condensed Consolidated Statement of Operations for the six months ended 30 June 2026

(in thousands, except number of shares and per share amounts)

		30 June 2026 Unaudited	30 June 2025 Unaudited
		$’000	$’000
Revenue		35,283	31,843
Cost of revenue		(3,962)	(3,930)
Gross Profit		31,321	27,913
Operating expenses
Commissions		(6,109)	(6,864)
Salaries, wages and benefits		(13,681)	(11,494)
Other operating expenses		(8,987)	(7,584)
Total operating expenses		(28,777)	(25,942)
Profit from operations		2,544	1,971
Realised losses on foreign currency transactions		(13)	(66)
Interest expense		(1,156)	(1,117)
Profit before income taxes		1,375	788
Provision for income taxes		(437)	(540)
Net Profit		938	248
Other Comprehensive Income		-	-
Total Comprehensive Income for financial period		938	248
Profit per common share
Basic earnings per share (dollars per share)		0.01	0.00
Diluted earnings per share (dollars per share)		0.01	0.00
Weighted average shares outstanding		106,359,163	106,359,163

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	Employee Benefit Trust	Retained earnings	Total equity
	Shares	$’000	$’000	$’000	$’000	$’000
Balance at 1 January 2025	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
Profit for the period and total comprehensive income	-	-	-		2,418	2,418
Purchase of share by employee benefit trust	-	-	-	(204)	-	(204)
Share based payment expense	-	-	(22)	-	-	(22)
Balance at 31 December 2025 Audited	106,359,163	1	35,119	(204)	(14,980)	19,936
Profit for the period and total comprehensive income	-	-	-	-	938	938
Share-based payment expense	-	-	52	-	-	52
Balance at 30 June 2026 Unaudited	106,359,163	1	35,171	(204)	(14,042)	20,926

Condensed Consolidated Statement of Cash Flows

(in thousands)

	Six months to 30 June 2026 Unaudited	Six months to 30 June 2025 Unaudited
	$’000	$’000
Cash flows from operating activities
Net Profit	938	248
Adjustments to reconcile net profit to net cash used in operating activities:
Depreciation and amortisation	1,047	1,165
Loss on disposal of fixed assets	8	-
Loan fees amortisation	12	12
Share-based compensation & other awards	52	55
Movement in allowance for credit losses	1,274	776
Changes in assets and liabilities:
Accounts receivable	(3,842)	(7,080)
Inventory	1,068	(2,468)
Other	93	409
Other receivables and prepayments	(12)	214
Accounts payable	(688)	331
Accrued expenses and income tax payable	823	1,720
Operating lease liabilities	(218)	(188)
Deferred revenue and customer advances	366	113
Net cash generated from / (used in) operating activities	921	(4,693)
Cash flows from investing activities
Purchase of plant, equipment and intangible assets	(583)	(1,185)
Net cash used in investing activities	(583)	(1,185)
Cash flow from financing activities
Proceeds from loans	-	11,000
Financing fees	-	(92)
Net cash generated from financing activities	-	10,908
Increase in cash and cash equivalents	338	5,030
Cash and cash equivalents at beginning of period	13,436	9,336
Cash and cash equivalents at the end of the period	13,774	14,366
Supplemental disclosure of cash flow information
Cash paid during period for interest	1,113	609
Cash paid during period for tax	335	476
Rights of use assets obtained in exchange for lease liabilities	62	1,231

Notes to the unaudited Condensed Consolidated Financial Statements

1. General Information

AOTI, Inc. (the “Company”) is a corporation incorporated in the State of Florida whose shares are listed on the AIM Market of the London Stock Exchange. 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 2026 and have not been audited. The statements reflect all normal recurring adjustments necessary for a fair statement of the results. It should be noted that interim results are not necessarily indicative of the full year.

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 2026 annual financial statements and consistent with those disclosed in the 2025 Annual Report.

These condensed consolidated interim financial statements should be read in conjunction with the historical financial information contained within the 2025 Annual Report, which is available on the Group’s website at: https://aotinc.net

These condensed consolidated interim financial statements were approved by the Board of Directors on 29 September 2026.

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.

In September 2026, the Company amended its existing financing arrangement with Runway, reducing the minimum revenue and EBITDA thresholds under its financial covenants through June 2027 to $66.7m and $6.2m, respectively and reaching a maximum of $72.5m revenue and $6.8m EBITDA from March 2028 onwards. The Directors are satisfied that Group is on track to meet all debt related financial covenants within next 12 months. See ‘Note 8 Long term debt’ for further detail on specific financial covenant requirements. 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 2025 Annual Report. No new accounting pronouncements were recently issued or adopted that had or are expected to have a material impact on our financial statements.

Accounts Receivable and Concentration of Credit Risk

Accounts receivable arise in the normal course of business and are recorded at the invoiced amount, net of an allowance for credit losses. The Company estimates expected credit losses using a historical loss‑rate methodology which incorporates past write‑offs of trade receivables over a three-year period consistent with the initial term of the Company’s portfolio.

The allowance for credit losses is recognised at the time the receivable is recorded and is reassessed quarterly based on management’s expectations regarding collectability.

Accounts receivable written off to bad debt expense, including movements in the allowance for credit losses, were $1,274,000 and $776,000 for the six months ended 30 June 2026 and 30 June 2025 respectively. The comparative amounts in the statement of cash flows have been reclassified to conform to the current-period presentation of accounts receivable and the allowance for credit losses. The reclassification had no impact on net cash flows from operating activities.

The Company’s allowance for credit losses totalled $3,683,000 and $2,503,000 at 30 June 2026 and 31 December 2025 respectively. The allowance included of $2,223,000 related to the receivables from Arizona (31 December 2025: $1,658,382). The Company ceased treatment of new Medicaid patients in Arizona from 1 April 2026 and our actions to obtain formal Medicaid coverage policy in that State for our therapy and recover historical claims remain ongoing. See further detail in the Chief Executive Officer’s Report above.

4. Revenue

The following table sets out the Group’s revenue by stream:

	Six months to 30 June 2026 Unaudited $’000	Six months to 30 June 2025 Unaudited $’000
Equipment rentals	20,653	18,222
Product sales, net of returns and allowances	14,630	13,621
Total revenues	35,283	31,843

The United States accounted for 98% of consolidated revenue for the six months ended 30 June 2026 (30 June 2025: 98%). The remaining revenue relates to markets across our international business.

The Company’s rental transactions are accounted for under ASC 842, Leases. Equipment rental revenue at 30 June 2026 of $20.7m (30 June 2025: $18.2m) includes revenue generated from renting medical equipment to customers and is recognised on a straight-line basis under operating leases over the length of the rental contract. Rental contracts are short-term in nature and do not include any provisions for the customers to acquire the equipment at the end of the lease term.

The Company’s sale of medical equipment, parts and supplies provided to customers of $14.6m at 30 June 2026 (30 June 2025: $13.6m) are recognised under ASC 606, Revenue from Contracts with Customers. The Company recognises revenue when it satisfies a performance obligation by transferring control over a product to a customer. The amount of revenue recognised reflects the consideration the Company expects to be entitled to in exchange for such products. Performance obligations are complete, and revenue is recognised at the point in time that the title to the products are transferred to the customer, typically upon delivery, meaning the customer has the ability to direct the use and obtain the benefit of the product.

5. Earnings per share

The calculation of basic and diluted earnings per share is based upon the profit 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 June 2026 Unaudited $’000	Six months to 30 June 2025 Unaudited $’000
Profit for the period from continuing activities	938	248
Basic weighted average number of ordinary shares in issue (number)	106,359,163	106,359,163
Dilutive impact of share awards (number)	10,299,928	7,558,333
Diluted weighted average ordinary shares in issue (number)	116,659,091	113,917,496
Basic earnings per share (dollars per share)	0.01	0.00
Diluted earnings per share (dollars per share)	0.01	0.00

The Group’s effective consolidated tax rate as of 30 June 2026 was 31.8% (30 June 2025: 68.5%). The reduction primarily reflects the implementation of a revised transfer pricing policy in the second half of 2025, designed to better align intercompany transactions with the Group’s organisational structure, business operations and overall tax strategy.

6. Intangible assets

	30 June 2026 Unaudited	31 December 2025 Audited
Cost	$’000	$’000
License agreements	9,615	9,615
Patents	508	508
Software in development	1,878	1,391
Gross carrying value	12,001	11,514
License agreements	(1,763)	(1,522)
Patents	(425)	(413)
Software in development	-	-
Accumulated amortisation	(2,188)	(1,935)
License agreements	7,852	8,093
Patents	83	95
Software in development	1,878	1,391
Net carrying amount	9,813	9,579

7. Long term debt

	30 June 2026 Unaudited	31 December 2025 Audited
	$’000	$’000
Long term commitments due to finance company	19,478	19,478
Unamortised financing fees	(103)	(115)
Accrued debt exit fee due on maturity	588	494
Total debt	19,963	19,857
Less current portion of long term debt	(1,393)	-
Total long term debt	18,570	19,857

Long-term Commitment

The Company maintains a loan agreement with Runway. In April 2026, SWK Funding LLC, the original lender, was acquired by Runway. The acquisition did not result in any changes to the terms of the Company's existing loan agreement.

The loan agreement provides that the Company comply with certain financial covenants. In September 2026, the Company reached agreement with Runway to prudently revise the revenue and EBITDA covenants for their loan.  The revised covenants are tested calendar quarterly and include (1) Minimum Consolidated Unencumbered Liquid Assets being the greater of $2.0m 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 $68.8m as at 30 June 2026, reducing to $66.7m between 30 September 2026 until June 2027 and reaching $72.5m from 31 March 2028 onwards; and (3) Minimum EBITDA on a last twelve month basis of $6.6m as at 30 June 2026, reducing to $6.2m between 30 September 2026 until June 2027 and reaching $6.8m from 31 March 2028 onwards.

On 30 June 2026, the Company was in compliance with all required covenants.

8. Share-based payment schemes

The Group operates employee share option schemes that are accounted for as equity-settled share-based payments.

During the period, the Company granted 2,711,595 performance-based share options (“Performance Awards”) under AOTI Long Term Incentive Plan (“Plan”) with an exercise price of £0.37. The exercise price was determined by reference to the closing market price of the Group’s shares on Alternative Investment Market of the London Stock Exchange on grant date of 8th April 2026. The term of awards is from grant date to end of the 2028 financial year as this was deemed a key period for the Group in terms of our reimbursement and coverage strategy. The Performance Awards vest subject to the achievement of specified Adjusted EBITDA and Adjusted EBITDA margin performance conditions related to the fiscal year ended December 2028.

The grant-date fair value of the Performance Awards was £0.14 per option. The fair value was estimated using the Black-Scholes option-pricing model. The significant assumptions used in the valuation included expected share price volatility based on the historical volatility of the Group and comparable companies, an expected dividend yield of 0%, a risk-free interest rate of 5%, and an expected term of 10 years.

Compensation expense associated with these awards is recognised over the requisite service period based, with estimates revised as necessary to reflect changes in expected performance outcomes. At 30 June 2026, a compensation expense of $52,000 has been recognised in Consolidated Statement of Operations under the Plan with a remaining compensation expense of $467,000 expected to be recognised evenly over periods until 31 December 2028. The Company has elected to account for forfeitures resulting from failure to satisfy service conditions as they occur.

A summary of options and restricted share unit activity for the six months ended 30 June 2026 is presented below:

	Number of shares
Balance at 31 December 2025	7,708,333
Granted	2,711,595
Exercised	-
Forfeited or expired	(120,000)
Balance at 30 June 2026	10,299,928

9. Related Party Transactions

No related party transactions were identified during the six months ended 30 June 2026, consistent with the year ended 31 December 2025.

10. Commitments and Contingencies

As of 30 June 2026, the Group had no significant commitments or contingencies requiring disclosure.

11. Subsequent events

In September 2026, the Company entered into an amendment to its existing financing arrangement with Runway. Under the amendment, the minimum revenue and EBITDA thresholds under its financial covenants through June 2027 have been reduced to March 2026 thresholds of $66.7m and $6.2m for revenue and EBITDA respectively and reaching a maximum of $72.5m revenue and $6.8m EBITDA from March 2028 onwards. All other material terms of the financing arrangement remained unchanged.

There were no other significant subsequent events after the reporting date requiring disclosure in the financial statements.

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[1] Current consensus EBITDA is $6.8m as of 29 September 2026

[2] Marion Kerr, Daisy Wild, Michael Edmonds, Andrew J.M. Boulton, Cost effectiveness of topical wound oxygen therapy for chronic diabetic foot ulcers, Journal of Diabetes and its Complications, Volume 39, Issue 5, 2025, 10901. https://doi.org/10.1016/j.jdiacomp.2025.109016.

 

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