Final Results

AOTI, Inc.

30 March 2026

 

30 March 2026

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

2025 Final Results

Good revenue growth despite US healthcare market disruption

Meaningful operational progress strengthening the core business and capabilities

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 audited results for the year ended 31 December 2025 ("the Period" or "FY 2025").

Operational Highlights:

·      Revenue growth 14.0% despite the impact of US government efficiency measures and the One Big Beautiful Bill Act (OBBBA) initiatives.

·      Organisational and operational changes have now been implemented, allowing for greater focus on patient outcomes and sales rep productivity, and these are already showing traction.

·      Medicaid Provider ID now obtained in 19 states (FY 2024: nine) further underpinning mid- and longer-term growth.

·      Multiple significant payer endorsements of TWO₂^® in the Period, which validates the Board's expectation of a positive Centers for Medicare & Medicaid Services (CMS) local coverage determination in the near term:

o  US: Medicaid Provider ID awarded in California, the largest Medicaid market in the US and positive ECRI Health technology assessment and resultant Cigna commercial insurer coverage for topical oxygen therapy.

o  Germany: Nationwide TWO₂^® recommendation by the Federal Joint Committee (G-BA).

o  UK: National Institute for Health and Care Excellence (NICE) treatment recommendation; TWO₂^® therapy now available across the NHS.

·      Good progress in the continued roll out of Eyes on the Wound™.

Financial Highlights:

$'000	FY 2025	FY 2024	Change
Revenue	66,537	58,359	+14.0%
Adjusted EBITDA1	7,542	8,057	-6.4%
EBITDA	7,542	2,878	+162%
Profit / (Loss) before tax	3,048	(945)	n.m.2
(Net Debt) / Net Cash	(6,536)	858	n.m.2

¹  Adjusted EBITDA is an unaudited non-GAAP measure: Earnings before interest, taxation, depreciation, amortization and non-underlying items - There were no adjustments for FY2025.

²  n.m. = not meaningful

·      Revenues grew by 14% to $66.5m (2024: $58.4m). Growth driven by Medicaid (45% of total revenues) which was up by 38%, driven primarily by expansion in New York.

o  Group revenue growth ex-revenues from Arizona state Medicaid was 15% (FY 2024 c.19%). 

·      Adjusted EBITDA of $7.5m (Adjusted EBITDA 2024: $8.1m). Driven by investments in market access and non‑cash receivables provisions under the FASB CECL³ methodology. Adjusted EBITDA margin 11.3% (FY 2024: 13.8%).

·      Receivables increased to $21.8m (2024: $13.4m), mainly due to Arizona state Medicaid, where the receivables balance is $15.6m (2024: $8.2m). 31 December 2025 net debt of $6.5m (2024: net cash $0.9m), reflecting the drawdown from the SWK Funding LLC (SWK) loan facility, as receivables increased.

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)

Arizona State Medicaid:

As described in the February Trading Update, the Company has intensified its efforts with the Arizona state Medicaid agency to secure a positive resolution to the ongoing reimbursement issues that have persisted for more than a year.  These discussions remain ongoing and progress has been made.  However, a resolution is not expected by 1 April 2026.  Consequently, the Company has no alternative but to cease the treatment of new Medicaid patients in Arizona from this date. This will limit further debtor build‑up, reduce working capital needs, and support the maintenance of the Group's positive operating cash flow position.

The Company has taken legal and regulatory advice in relation to its position, and the Board remains confident in its ability to collect historical debt from Arizona Medicaid.

Outlook:

The Board remains confident that AOTI has adapted where needed to navigate market headwinds and is positioned for sustainable revenue and Adjusted EBITDA growth over the medium and longer term. The Company has sufficient cash generation and headroom in its SWK facility to support its ongoing working capital needs.

2025 was marked by significant uncertainty across the US healthcare sector, driven most visibly by major US policy shifts that disrupted sector funding pathways. These headwinds also reinforced the strength of our value‑driven proposition where delivering outcomes is the core component. TWO₂^®'s proven long-term durable healing outcomes and meaningful health economic savings position AOTI on the right side of this change. As the market recalibrates, we expect today's headwinds to become future tailwinds.

2026 is expected to remain a transitional year as we work through ongoing challenges and embed our optimised sales structure to drive stronger productivity and create market leverage. As the established leader of the Topical Oxygen Therapy segment of the Advanced Wound Care market, with a differentiated, clinically proven and cost-effective therapy delivered through our direct to patient model, we believe the Company is well placed to benefit as broader payer coverage, including Medicare, develops over time.

Following the decision to cease enrolling new Medicaid patients in Arizona, the key revenue drivers in 2026 are expected to be the core Veterans Administration (VA) business and New York Medicaid where there is mandated coverage for our products.

The Board expects revenue growth in FY 2026 to be in the low single digits compared to FY 2025 (equivalent to mid-teens underlying growth excluding Arizona state Medicaid revenues). Adjusted EBITDA margin for the year is expected to be high single digits, lower than FY 2025 due to the decision to curtail the higher margin Arizona Medicaid revenue, sales force optimisation and increased market access costs as we continue to navigate US healthcare headwinds. We anticipate Adjusted EBITDA to be weighted to the second half of the year as changes made in 2025 progressively show benefits.

We continue to expect a CMS local coverage determination in the near term, which will be transformational for the Company over time.

Dr. Mike Griffiths, Chief Executive Officer & President of AOTI, said: "Our unique outcomes-based platform underpins AOTI's long-term sustainable growth and is fully aligned with the goals of the shift towards outcomes-based care in the US. Despite the major challenges caused by the implementation of US policy initiatives in the year, the business delivered good revenue growth and made meaningful operational progress that will enable AOTI to benefit once US healthcare market headwinds abate. We continue to expect a CMS local coverage determination in the near term, which will be transformational for the Company over time."

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 18:00 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 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 (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 hospitalizations 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

CHAIR'S STATEMENT

2025 was a challenging year for us, managing a number of unexpected external market headwinds which were largely out of our control. Despite these external pressures, AOTI delivered a strong performance with good revenue growth. The fundamentals of the Company have never been stronger and this demonstrates the resilience of our business model that drives long-term sustainable growth. I am pleased that the business has been proactive in addressing market challenges and sharpened its operational focus to ensure it is well positioned to benefit when market conditions improve.

Continuing to build a new outcomes-based at home category within the Advanced Wound Care market and long-term sustainable growth strategy

I am pleased with the progress we've made in rolling out our outcomes‑based care strategy because this is how we create true "stickiness" with prescribers and payers. By stickiness, I mean repeatable, evidence‑backed adoption: clinicians who trust our therapy in their workflows and payers who see the clinical and economic outcomes they are funding. This only works because we've invested and continue to invest in building the full platform to support our outcomes-based strategy, and this includes Eyes on the Wound™ which now gives us the full suite of capabilities required to support our long-term strategy.

Our platform is what makes AOTI such a unique leader in the wound care space; no-one else has this range of capabilities and this is key to the sustainability of our business model and high growth strategy.

Talent management and building the right capability sets

I believe that AOTI is well positioned to benefit from the structural shift in US healthcare towards value-based care which perfectly aligns with our ability to deliver improved outcomes. Central to realising this opportunity is our people, who remain the Company's greatest asset.

I have seen the commitment, integrity and professionalism of our employees and this has been instrumental in establishing AOTI as an undisputed leader in the Topical Oxygen Therapy segment of the Advanced Wound Care market. Their belief in our Mission and alignment with our values underpin the execution of our strategy.

I would like to take this opportunity to thank our employees, and all our advisors, for their dedication and hard work. It is a testament to their professionalism and commitment that, despite the many external challenges we faced in 2025, the business has continued to grow at a substantially higher rate than the Advanced Wound Care Devices market in 2025⁴.

⁴ Source: SmartTRAK Business Intelligence

Governance

As the Group continues to grow and mature, the Board remains focused on ensuring that our governance framework evolves in line with the increasing scale and complexity of the business. During 2025, alongside strengthening our operational capabilities, we invested in further enhancing the integration and effectiveness of our enterprise systems and internal controls.

These developments build on an already strong control environment and reflect our commitment to continuous improvement. By further embedding systems, processes and data visibility across the organisation, we have strengthened management insight, enhanced agility and ensured the business is well equipped to respond efficiently to changing market conditions as we pursue our long-term growth strategy.

Balance Sheet and cash

As stated previously, the Group remains committed to removing the current debt from its balance sheet in the medium term. In the short term however, it has seen the need to strengthen its balance sheet, increasing debt through drawdown from the SWK Funding LLC (SWK) loan facility. This has ensured the business is able to navigate effectively through the swift and unprecedented changes seen across the entire US public healthcare system (VA, Medicaid and Medicare), while still being able to build the business to deliver long-term value creation for shareholders.

Positioned to re-accelerate growth

I am proud of the way the Company has responded so positively and proactively to the challenging market conditions. During the year, we restructured our commercial teams and implemented key metrics to better drive performance in all targeted market segments. These measures are intended not only to address current headwinds, but also to strengthen the foundation of the business, enabling us to re-accelerate growth as market conditions improve and capitalise on the potentially transformational opportunity presented by US national coverage.

I am grateful to all our shareholders for their support in what has been a challenging year for AOTI, and I look forward to reporting on our progress and achievements in 2026.

Douglas Le Fort

Chair

27 March 2026

CHIEF EXECUTIVE OFFICER'S REPORT

I am pleased to present the CEO report for AOTI in our second and first full year as a public company. The unprecedented headwinds across the US healthcare system in 2025 were an unexpected challenge to all, but we responded deftly and decisively and continued to deliver good revenue growth. I am particularly inspired by how the entire team adapted across the year as market conditions rapidly evolved, allowing us to address near-term performance challenges whilst remaining focused on our Mission of helping all people with chronic conditions get back to living their lives to the fullest.

Executing on our strategy in the face of unprecedented US healthcare sector headwinds

In 2025 we delivered revenue of $66.5m, representing growth of 14.0%. Despite top line momentum pressures, we were profitable and delivered Adjusted EBITDA of $7.5m (Adjusted EBITDA 2024: $8.1m), all while continuing to build the foundations of our long-term growth strategy and ensure the business is well positioned to re-accelerate growth as the US healthcare market headwinds abate.

The disruption of the US Department of Government Efficiency (DOGE) efficiency initiatives from the second quarter of the year, and the impact of the One Big Beautiful Bill Act (OBBBA) in the second half of the year, on the US healthcare landscape have been well publicised. For AOTI specifically, the challenges started with the administrative headcount reductions in the VA under DOGE which disrupted the initiation of our therapy for veterans. This was followed by the implied impact of cost containment to insurers and reduced Federal government contributions in the Medicaid sector as part of the OBBBA. When combined, these created significant uncertainty within our two largest market segments, depressing the growth and predictability of both our VA and Medicaid segments.

By the end of the year, we started to see disruption abate in the VA. New York Medicaid performed well during the period, which is underpinned by mandated coverage for the therapy within Medicaid in that particular state. Whilst this is not a pre-requisite for reimbursement by insurers, we are pursuing mandated Medicaid coverage in other states as part of our market access strategy. We expect disruption to continue across the Medicaid sector throughout 2026.

To ensure we maintain a sustainable platform for future growth whilst adapting to headwinds, we continued to make investments in market access and restructured our sales infrastructure to better execute on the wider opportunity as broader payer coverage continues to be established.

Building a scalable outcomes-based care platform in a changing healthcare world

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. TWO₂^® is already the clear market leader with >75% share of today's Topical Oxygen Therapy market.

As healthcare systems increasingly prioritise measurable clinical outcomes and cost savings, our integrated outcomes-based platform, combines three pillars: (1) a clinically effective, differentiated therapy, (2) patient data analytics, and (3) direct patient access at home. These all significantly differentiates AOTI from other solutions. This platform is scalable and underpins our long-term sustainable growth strategy.

These pillars create a significant strategic advantage for the Company and meaningful barriers to entry for competitors and in the long term, will deliver a 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 (DME) 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 truly engaged outcomes.  

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

AOTI's Eyes on the Wound™ 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 to the therapy and stickiness with prescribers. The system is currently being rolled out in stages across the business.  

All three pillars enable us access and the ability to deliver cost saving and clinical outcomes to the full value chain of patients, caregivers, prescribers, clinicians and payers.

In the face of progressively more intense cost containment pressures in the healthcare market where delivering outcomes is a core component, it is the combination of these three pillars and strategic capabilities of our outcomes-based platform that give AOTI its unique position.

Expanding market access for TWO₂^® therapy in an evolving reimbursement and market landscape

AOTI's approach to market access is a phased expansion plan. Ultimately, as these phases are implemented, the remaining payer categories will also provide reimbursement. The Company is targeting these sectors because they have the highest diabetes and chronic wound prevalence rates.

Market access is a hugely complex and often very lengthy process, with many levels of decision makers and influencers involved. Notwithstanding, the more recent US market headwinds discussed earlier, in 2025 we have still made progress.

·      The first phase of the Company's reimbursement strategy has been completed successfully with reimbursement for the Company's TWO₂^® therapy having been secured within the VA and New York Medicaid for a number of years. 

·      The second phase of expanding wider state Medicaid payer coverage is ongoing, and now is very well progressed with Medicaid provider IDs secured in 19 Medicaid states. This includes seven additional states in 2025, including California (the largest), which has almost 15 million residents enrolled in its Medicaid programme (MediCal) and three in 2026. This phase of our strategy is key to our ability to accelerate our growth and profitability, once broad market reimbursement (post CMS coverage) has been attained. Whilst we are billing in six states currently, we do not expect material revenue contributions from these (with the exception of New York) in the near term given the challenges from current headwinds with the payers/insurance companies who are 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 whole Medicare population. This will also allow for accelerated access to Medicaid and Commercial payer populations. CMS is currently conducting their coverage review for topical oxygen therapy.

In 2025 we received several independent endorsements of our TWO₂^® therapy's evidence portfolio and proven clinical and health economic outcomes, further validating our offering. NICE in the UK, the American Diabetes Association (ADA), ECRI in the US and G-BA in Germany. Each of these provide supportive precedents for further expanded payer coverage in the US and in Europe. The endorsement of TWO₂^® therapy by the evidence-based decision-making bodies in Germany and the UK, along with its inclusion on the NHS supply schedule, will allow for steady expanded access and revenue in these two markets as 2026 progresses, ultimately creating another more material revenue source longer-term. All of these positive endorsements provide valuable precedents for receiving Medicare coverage and reimbursement. Medicare coverage would dramatically expand our US addressable market and open up not just the over 65 population (with a 25% diabetes prevalence rate) but also facilitate easier access to our therapy across Medicaid state programmes and other payer segments.

It is clear that the traditional healthcare fee-for-service approach is under increased challenge globally.  In the US, the well-publicised fraud and abuse within the Cellular Tissue Based Products (CTPs) segment of the wound care market in the US has drawn much attention from both regulators and the legal authorities. This has driven a new and welcome focus on clinically evidenced treatments that can also reduce the ongoing cost burden for the growing wound care patient population, and which do not avail themselves to possible "perverse incentives" for providers to prescribe and apply in clinic. TWO₂^® therapy possesses the strongest long-term clinical and health economic evidence available of any product in the wound care space, and since it is applied by the patient at home, it is immune to these questionable treatment in-clinic decisions that have been well publicised, therefore providing a solution that payers are clearly looking for.

For all these reasons, we strongly believe that the headwinds encountered in 2025 will progressively turn into tailwinds.

Outcomes-focused wound care providing sustainable long-term growth while building the foundations for full US coverage

We have completed an extensive sales management restructuring in late 2025, with the appointment of a new Chief Commercial Officer, VP of Sales (expanded role from VP of VA) and a largely new regional management team. This will enable us to execute on our strategy in the near term and provide longer term operating leverage as we anticipate significant market expansion. Our existing commercial infrastructure across 26 states, gives us access to c.86% of the US population. We have restructured and refocused our sales teams geographically, as opposed to by market segment. This allows us to take advantage more effectively of any business opportunities that exist in a territory, be that VA, Medicaid, Commercial, or in the future, Medicare related.

By leveraging our established infrastructure, we will be able to move at pace as soon as broader coverage and reimbursement, such as Medicare, becomes available, and without the need for significant additional investment. When combined with our ongoing efforts to better cascade proven effective tactics for creating prescriber engagement, stickiness and delivering therapy outcomes, we expect to be able to meaningfully increase median sales rep productivity incrementally across 2026 and beyond. 

These expected productivity improvements, the ability for sales reps to access all business in a territory, and our medium-term migration toward higher reimbursement business, will ultimately drive revenue growth and profitability levels over time.

Continuing to recruit, train, and develop a best-in-class commercial infrastructure is critical to our success. Our sustainable, cash-generating growth model enables us to fund this expansion ourselves in the near to medium term.

Veterans Administration

As mentioned earlier, the VA business was impacted from the DOGE efficiency programme in early 2025 that resulted in headcount uncertainty and reductions, especially within the administrative functions that process the purchase orders for our therapy. We did not see any meaningful reduction in clinical demand for TWO₂^® therapy, just a reduction in the ability for the VA to process these orders as effectively as in the past. As 2025 progressed and DOGE headwinds abated, this impact has also reduced with the VA settling into the new normal staffing levels and workloads. Consequentially, we saw a steady normalisation of growth in this segment by the end of the 2025 and an improving trend already in 2026 that we expect to continue.

Medicaid

Much of this growth in this segment was driven by New York Medicaid where we have mandated coverage in place.

Whilst the business has provider ID in 19 states, the combination of a) the OBBBA on Federal contributions to individual state Medicaid budgets b) manged care insurer loss run miscalculations and c) resultant retraction in this sector across 2025 led to a longer time frame to convert new Medicaid states to consistent billing patterns. This disruption is expected to continue into 2026.

In addition, we continued to experience delays on payments in Arizona state that was additionally impacted by significant CTP fraud/abuse and Medicaid director vacancies, where we have continued to treat patients, under the clear expectation to recoup payment, as we have met the required statutory requirements for reimbursement and as explained above, the Company has no alternative but to cease treating new Arizona Medicaid patients from 1 April 2026.

We expect by mid-2026 to have Medicaid provider IDs established in the majority of the 26 strategic states mentioned earlier which positions us well for the future. However, due to the continued headwinds of the OBBBA creating fiscal uncertainty for state Medicaid agencies and managed Medicaid insurers, we expect it to continue to be difficult to convert these states into consistent billing. As a result, we will continue in the near term to focus our growth efforts in established Medicaid states and with meaningful revenue contribution primarily from New York where there is mandated coverage as well as from New Jersey.

Other

This segment includes both the UK and Germany, which both achieved positive therapy validation milestones in 2025. They are expected to remain non-material revenue contributors for the near to medium term inherent of early-stage commercial markets. 

In the UK, TWO₂^® therapy received a positive NICE treatment recommendation after being awarded inclusion by NHS Supply Chain to the framework agreement for Advanced Wound Care effective in the last quarter of 2025. Likewise, in Germany, we received a positive G-BA recommendation for the use of TWO₂^® therapy in Diabetic Foot Ulcers and formal coverage is proceeding through the mandated HTA and coding process, which we expect to complete in 2026.

In Saudi Arabia we transitioned to a new distribution partner in 2025 and expect this, along with the Saudi Ministry of Health (MOH) focus on diabetes care, to stimulate improved growth within the high diabetes prevalence region of the Middle East in 2026.

Dr Mike Griffiths

Chief Executive Officer

27 March 2026

CHIEF FINANCIAL OFFICER'S REPORT

Despite challenges across the US healthcare market, AOTI delivered 14% revenue growth with a reduction in Adjusted EBITDA primarily as a result of costs to support long‑term growth and as it navigated the US market headwinds.

Consolidated Statement of Operations

We report our financial results in accordance with U.S. GAAP; however, management believes that certain non-GAAP financial measures provide investors with useful information to supplement our financial operating performance in accordance with U.S. GAAP. We use Adjusted EBITDA as a measure of profitability, the calculation of which is shown below. For FY 2025, there were no adjusting items.

Financial Highlights

$'000 (unless stated)	2025	2024	Change
Revenue	66,537	58,359	+ 14.0%
Gross Profit	58,215	51,355	+13.4%
Gross Margin (%)	87.5%	88.0%	-57 bps
Operating Expenses	52,687	50,100	+5.2%
Gain from Operations	5,528	1,255	+340.5%
Adjusted EBITDA	7,542	8,057	- 6.4%
Basic earnings / (loss) per share (cents per share)	0.03	(0.02)	n.m.1
Diluted earnings / (loss) per share (cents per share)	0.02	(0.02)	n.m.1
Operating Cash Flow	(4,795)	(5,910)	-18.9%
Financing Cash Flow	10,704	16,409	-34.8%
Net (Debt) / Cash	(6,536)	858	n.m.1

¹ n.m - not meaningful

Revenues

·      Revenues increased by 14.0% to $66.5m (2024: $58.4m), driven primarily by growth in Medicaid states of 37.6% to $29.6m (2024: $21.5m), and with this driven primarily by expansion in New York (up 39.6%). Growth in this segment is continuing to be impacted by changes in the US healthcare system and OBBBA. Growth from the VA was 3.0% to $35.4m (2024: $34.4m). Growth was lower due to significant disruption from the impact of DOGE efficiencies early in the year, but where we started to see disruption abate, with Q4 2025 growth of c.5%.

·      Revenues in our Other segment were $1.5m (2024: $2.5m) as a result of stocking orders in 2024 that as expected, were not repeated in 2025.

Gross Profit

Gross profit was $58.2m (2024: $51.4m), an increase of 13.4%. Gross profit margin decreased slightly from 88.0% to 87.5% despite an increase in more structurally profitable Medicaid revenues mainly due to consumables usage.

Adjusted EBITDA

Adjusted EBITDA² is calculated as below:

$'000		2025	2024
Net profit / (loss)		2,666	(1,756)
Income taxes		382	811
Interest (net)		2,334	1,853
Depreciation and amortization		2,160	1,970
EBITDA		7,542	2,878
Adjustments to EBITDA
Share based payment		-	5,077
Strategic advisory and IPO preparation		-	102
Total Adjustments		-	5,179
Adjusted EBITDA		7,542	8,057
Adjusted EBITDA margin		11.3%	13.8%

Adjusted EBITDA decreased from $8.1m in 2024 to $7.5m in 2025. This reduction was primarily driven by increased investment in headcount, higher market access costs to support long‑term growth, and an increase in non‑cash accounting provisions under the FASB CECL³ methodology.

Adjusted EBITDA margin declined by approximately 250 basis points to 11.3% (2024: 13.8%). The margin reduction reflected continued investments in market access and expansion of sales footprint, relative to revenue growth and is expected to contribute to growth going forwards. 

The receivables balance increased to $21.8m (2024: $13.4m) driven primarily by an increase in the Arizona Medicaid debtor balance as well as a relatively small increase due to increased trading in Medicaid. This has led to an increase in the CECL provision balance impacting Adjusted EBITDA.

² Adjusted EBITDA is an unaudited non-GAAP measure: Earnings before interest, taxation, depreciation, amortization and non-underlying items

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 5.2% to $52.7m (2024: $50.1m). After taking into account adjustments as noted in the above table, underlying operating expenses for 2024 were $44.9m, an underlying increase of 17.3%. This increase includes investments in headcount which focused on expanding sales, market access and operations teams, which will support long-term growth. Other cost increases include commissions, listing related costs for a full year (six months of 2024 was pre-IPO) and non-cash CECL provision.

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

Interest expense on our loan with SWK was $2.4m (2024: $1.8m). The Company made an amendment to its existing loan agreement, providing an additional $11.0m loan at a reduced interest rate and longer amortization terms. This, together with cash on hand, provides adequate headroom to accessible capital to enable the Company to continue to execute its growth strategy.

Profit / (Loss) before tax

Profit before tax was $3.0m (2024: $0.9m loss) and taxes were $0.4m (2024: $0.8m).

Earnings / (Loss) per share

Basic earnings per share was $0.03 (2024: $0.02 loss) and diluted earnings per share was $0.02 (2024: $0.02 loss). The number of shares in issue was broadly unchanged in 2025.

Consolidated Balance Sheet

Cash

Cash at year end was $13.4m (2024: $9.3m), supported by the additional loan from SWK of $11.0m. Net debt was $6.5m (2024: net cash $0.9m).

Trade Accounts Receivable

Trade accounts receivables increased to $21.8m ($13.4m). The increase is primarily due to the issues experienced in Arizona Medicaid, where the debtor balance for this state is $15.6m. A small increase was a result of the Company moving to a higher proportion of non-VA business which pays on more typical commercial terms than the VA.

In 2025, Arizona contributed approximately $9.2m (2024: $8.5m) of revenue. As previously communicated, claims for Medicaid sales into Arizona have continued to be denied by insurers delaying payment for services provided and in turn, increasing the Receivables balance. AOTI has continued to pursue claims with insurers and to date has successfully processed initial claims through the Medicaid arbitration process that have been paid in full ($1.1m). While effective, the arbitration process is both time‑consuming and costly, as claims must be prepared and submitted on a patient‑by‑patient basis.

The Group has been managing the associated risk to cash as working capital increases and expanded its loan principal with SWK by $11.0m in the year to $19.5m.

Inventory

Inventory increased to $5.1m (2024: $2.5m) which was mainly due to commitments to purchase consumables in anticipation of growth. This is expected to normalise in 2026 as the stock is consumed over a longer period than planned.

Other receivables and prepayments

Other receivables and prepayments were $1.7m (2023: $1.4m). This primarily reflects prepayments for 2026 conference costs, product manufacturing and materials, and income tax.

Property, plant and equipment

Property, plant and equipment decreased to $2.8m (2024: $3.3m). During the year, the Company improved efficiency across the asset base, resulting in reduced operational requirements.

Intangible assets

Intangible assets were $9.6m (2024: $9.0m) and represent primarily the amortized value of the intangible asset on the acquisition of Nexa Medical Limited. The increase relates to investment in Eyes on the Wound™ net of amortisation.

Accounts payable and accrued expenses

Accounts payable reduced to $1.2m (2023: $1.6m), due to timing of invoices and payments. Accrued expenses increased to $9.3m (2024: $7.3m) due mainly to higher sales commissions, deferred revenues, professional fees and travel costs.

Long term debt

Long term debt represents a term loan with SWK. The balance increased to $19.9m (2024: $8.5m) in 2025 and was due to a further $11.0m drawdown at a reduced interest rate with a longer maturity term. The Board felt it prudent to retain access to liquidity in light of uncertainties in the US healthcare market and as the Group enters new market segments (e.g. Medicare).

Consolidated Statement of Cash Flows

Cash used in operating activities decreased to $4.8m (2024: $5.9m). This decrease is mainly the result of an increase in accounts receivable due to delays in payments from Arizona Medicaid insurers and a greater proportion of non-VA business as well as an increase in inventory as explained above.

Purchases of property, plant, equipment and intangible assets reduced from $1.9m to $1.8m, which was primarily our Hyperbox homecare controllers and oxygen concentrators for our TWO₂^® therapy and investment in Eyes on the Wound™.

Financing activities includes the proceeds from an increase in the SWK loan of $11.0m (2024: $4.0m reduction). In 2024 the Company raised $19.9m in net IPO proceeds.

Jayesh Pankhania

Chief Financial Officer

27 March 2026

AOTI, Inc.

Consolidated Balance Sheet

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

		December 31,
Assets		2025		2024
Current assets
Cash and cash equivalents		$     13,436		$         9,336
Trade accounts receivable, net		21,755		13,433
Inventory		5,082		2,514
Other receivables and prepayments		1,659		1,401
Total current assets		41,932		26,684
Property and equipment, net		2,811		3,346
Intangible assets, net		9,579		9,015
Operating lease right of use assets		1,272		469
Deposits		26		26
Total assets		$      55,620		$       39,540
Liabilities and shareholders' equity (deficit)
Current liabilities
Accounts payable - trade		$           1,238		$             1,550
Accrued expenses		9,314		7,313
Deferred revenue		2,509		2,381
Current portion of operating lease liabilities		411		189
Income tax payable		-		87
Total current liabilities		13,472		11,520
Long-term debt, net		19,857		8,433
Deferred income tax liabilities		1,438		1,844
Long-term operating lease liabilities		917		302
Total liabilities		$      35,684		$         22,099
Shareholders' equity (deficit)
Common share, $0.00001 par value, 106,359,163
authorized, issued, and outstanding
as of December 31, 2025 and 2024, respectively		$               1		$                  1
Shares held by employee benefit trust, at cost		(204)		-
Additional paid-in capital		35,119		35,086
Retained deficit		(14,980)		(17,646)
Total shareholders' equity (deficit)		$      19,936		$         17,441
Total liabilities and shareholders' equity		$      55,620		$         39,540

See notes to consolidated financial statements.

                                                                                  AOTI, Inc.

Consolidated Statement of Operations

		Year Ended December 31,
		2025		2024
Revenue		$       66,537		$        58,359
Cost of revenue		(8,322)		(7,004)
Gross profit		58,215		51,355
Operating expenses
Commissions		(13,706)		(11,871)
Salaries, wages and benefits		(22,421)		(25,064)
Other operating expenses		(16,560)		(13,165)
Total operating expenses		(52,687)		(50,100)
Gain from operations		5,528		1,255
Other income (expense)
Realized losses on foreign currency transactions		(146)		(129)
Other expense		-		(218)
Interest expense, net		(2,334)		(1,853)
Profit / (Loss) before income taxes		3,048		(945)
Provision for income taxes		(382)		(811)
Net Profit / (Loss)		$       2,666		$        (1,756)
Profit / (Loss) per common share:
Basic earnings / (loss) per share		0.03		(0.02)
Diluted earnings / (loss) per share		0.02		(0.02)

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

See notes to consolidated financial statements.

AOTI, Inc.

Consolidated Statement of Changes in Shareholders' Equity (Deficit)

(in thousands, except number of shares)

	Common Share			Additional Paid-In Capital		Retained Earnings (Deficit)	Total Shareholders' Equity (Deficit)
	Shares		$		Employee Benefit Trust
Balances at January 01, 2024	82,405,340		$        1	$       9,978	$               -	$ (15,890)	$          (5,911)
Issuance of new common shares	23,953,823		-	24,735	-	-	24,735
Shares issued as repayment of related party 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 compensation	-		-	5,077	-	-	5,077
Loss for the period and total comprehensive income			-	-	-	(1,756)	(1,756)
Balances at December 31, 2024	106,359,163		$        1	$     35,086	$              -	$ (17,646)	$          17,441
Profit for the period and total comprehensive income	-		-	-	-	2,666	2,666
Share based payment expense	-		-	33	-	-	33
Purchases of shares by Employee Benefit Trust	-		-	-	(204)	-	(204)
Balances at December 31, 2025	106,359,163		$         1	$     35,119	$    (204)	$ (14,980)	$          19,936

See notes to consolidated financial statements.

                                                                                   AOTI, Inc.

Consolidated Statement of Cash Flows (in thousands)

		Year Ended December 31,
		2025		2024
Cash flows from operating activities
Net profit/(loss)		$        2,666		$         (1,756)
Adjustments to reconcile net profit / (loss) to net cash used in operating activities
Depreciation and amortization		2,160		1,730
Loss / (gain) on disposal of fixed assets		51		(22)
Loan fees and warrant amortization		22		260
Share-based compensation & other awards		33		5,177
Deferred income taxes		(405)		31
Allowance for credit losses		1,659		524
Changes in operating assets and liabilities:
Accounts receivable		(9,981)		(8,736)
Inventory		(2,568)		(311)
Other		494		-
Other receivables and prepayments		(258)		(1,262)
Accounts payable		(313)		(4,233)
Accrued expenses and income taxes payable		1,913		2,564
Right of use assets		(1,233)		(149)
Operating lease liabilities		837		(166)
Deferred revenue		128		439
Net cash used in operating activities		(4,795)		(5,910)
Cash flows from investing activities
Purchases of property and equipment		(1,809)		(1,941)
Net cash used in investing activities		(1,809)		(1,941)
Cash flows from financing activities
Proceeds from IPO		-		24,735
Issuance costs related to IPO		-		(4,804)
Proceeds from loans		11,000		2,000
Repayment of loans		-		(6,000)
Interest capitalization		-		478
Proceeds from related party loans		-		1,000
Repayments of related party loans		-		(900)
Repayment of loans - related parties through share grant		-		(100)
Financing fees		(92)		-
Purchase of shares by Employee Benefit Trust		(204)		-
Net cash provided by financing activities		10,704		16,409
Net increase in cash and cash equivalents		4,100		8,558
Cash and cash equivalents - beginning of year		9,336		778
Cash and cash equivalents - end of year		$      13,436		$         9,336
Supplemental disclosures of cash flow information
Cash paid during the year for interest		$         1,705		$           1,865
Cash paid during the year for income taxes		1,415		1,365

See notes to consolidated financial statement.

Notes to Consolidated Financial Statements

Note 1 - Nature of Business and Basis of Presentation

Nature of Business

AOTI, Inc., a Florida corporation, was incorporated in 2008. References to the "Company" and "Group" in these consolidated financial statements are to AOTI, Inc. and its wholly owned consolidated subsidiaries. The specific purposes of the Company are to patent, manufacture, rent, and sell medical devices to help resolve severe acute and chronic wounds for customers globally. The Company provides innovative and efficacious topical wound oxygen solutions for use in both the institutional and the home care settings to improve the health, well-being, and independence of patients. The Company completed an Initial Public Offering ("IPO") on the Alternative Investment Market ("AIM") of the London Stock Exchange on June 18, 2024 referred to as the "Admission".

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). The accompanying consolidated financial statements for the years ended December 31, 2025 and 2024, include the accounts of AOTI, Inc., and its wholly owned subsidiaries, Advanced Oxygen Therapy, Inc., AOTI Limited, Nexa Medical Limited and AOTI GmbH. In 2025, the Company established the 'AOTI Employee Benefit Trust' for the purpose of holding shares to satisfy the requirement of any share schemes operated by the Company.

The financial statements are presented in U.S dollar (USD) and all values are rounded to the nearest thousand ($000), except as otherwise indicated.

The financial statements are prepared on a going concern basis which the Directors believe to be appropriate. In preparing their assessment of going concern, the Directors have considered available cash resources, financial performance, cashflow forecast, as well as the Company's principal risks and the general uncertainties in the market, including the longer than expected delays in collecting payment from certain customers as described in the Accounts Receivable and Concentration of Credit Risk below. The Company has available cash on hand at December 31, 2025, of $13,436,000. The Company is currently financed with a $19,478,000 loan principal with SWK Funding LLC that was refinanced in 2025. No principal repayments are due within the twelve‑month period following the date the financial statements are issued.

Based on management's assessment of the Company's current financial position and cash flow forecasts for the twelve‑month period following the date the financial statements are issued, management has concluded that the Company will have sufficient liquidity to meet its obligations as they become due and continue as going concern.

Note 2 - Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include assumptions regarding the allowance for credit losses, the impairment assessment of intangible assets, and income taxes (including valuation allowances). These estimates are based on information available as of the date of the consolidated financial statements, and assumptions are inherently subjective in nature. Therefore, actual results could differ from those estimates.

Segments

The Company operates in one reportable segment, which comprises the development and sale of innovative medical devices for therapeutic care. The majority of the Company's sales are to customers located in the United States and the majority of its assets are located in the United States.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company's accounts at each U.S. financial institution are insured by the Federal Deposit Insurance Corporation ("FDIC"). At various times during the year cash balances may exceed the FDIC limit which provides basic coverage up to $250,000 per owner. Generally, these deposits may be redeemed upon demand and, therefore, are believed to bear minimal risk.

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, adjusted for changes in economic conditions and customer‑specific risk characteristics. In developing its estimate of expected credit losses, the Company considers all relevant information, including historical write‑off experience, current conditions, and reasonable and supportable forecasts over the contractual life of the receivable.

The historical loss‑rate model 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 recognized at the time the receivable is recorded and is reassessed quarterly based on management's expectations regarding collectability.

The Company's accounts receivable primarily relate to customers whose payments are reimbursed through Medicaid Services directly with the payor (insurance companies). When management determines that a specific customer is unable to meet its financial obligations, the related receivable is written down through an adjustment to the allowance for credit losses to reflect the amount that is expected to be collected.

Accounts receivable written off to bad debt expense, including movements in the allowance for credit losses, were $2,892,000 and $1,091,000 for the years ended December 31, 2025 and 2024, respectively. The Company's allowance for credit losses totaled $2,503,000 and $1,170,000 as of December 31, 2025 and 2024, respectively.

Due to the nature of medical billings and the potential for Medicaid claim denials occurring after services have been rendered the allowance for credit losses represents a significant estimate. Actual collections on accounts receivable may differ materially from management's estimates.

The Company has intensified its efforts with the Arizona state Medicaid agency to secure a positive resolution to the ongoing reimbursement issues that have persisted for more than a year. Medicaid payments in Arizona have continued to be denied by insurers, leading to an increase in receivables where the year-end balance is $15.6m (2024: $8.2m). The Group submitted claims totalling $1.1m to the Medicaid arbitration process in Arizona, all of which were settled in full during the year. While effective, the arbitration process is both time‑consuming and costly, as claims must be prepared and submitted on a patient‑by‑patient basis. In parallel, the Group has been actively engaging with the state Medicaid agency to support recovery efforts during the year. The Company expects to collect the outstanding accounts receivables balance in full.

The Company's exposure to credit losses may increase if its customers are adversely affected by changes in healthcare laws, coverage and reimbursement and economic pressures.

Major Customers

One customer represented 38% and two customers represented 47% of the Company's gross accounts receivable at December 31, 2025 and 2024, respectively. No one customer represented greater than 10% of the total net revenues for the year end December 31, 2025 and 2024 respectively.

Inventory

Inventory is stated at the lower of cost (first-in, first-out method) or net realizable value. Inventory consists of the following as of December 31, 2025 and 2024 (in thousands):

	December 31,
	2025		2024
Raw Materials	$          1,098		$             967
Finished goods	3,984		1,547
	$          5,082		$          2,514

Property and Equipment

Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets.

The estimated useful lives of the assets are as follows:

                                 Medical equipment, available for lease                             5 years

                                 Computers and software                                                   3 years

                                 Furniture and equipment                                                   5 years

Repairs and maintenance expenditures that do not significantly add to the value of the property, or prolong its life, are charged to expense as incurred. Major additions are capitalized and depreciated over the remaining estimated useful lives of the related assets. When property and equipment is sold or retired, the cost and accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the consolidated statements of operations.

Intangible Assets

Intangible assets consist of patents, license agreement and software in development costs. Patents are carried at cost related to legal fees incurred in perfecting the assets, net of accumulated amortization. Amortization is calculated on a straight-line basis over the useful lives of the respective assets. The useful lives of patents are up to 20 years, plus any extension period within the respective patent agreements. The estimated useful lives of patents are based on the benefits that the patent provides for its remaining terms unless competitive, technological obsolescence or other factors indicate a shorter life. Intellectual property was acquired through an asset acquisition and is recorded at its cost at the date of acquisition. Cost is comprised of cash consideration, legal fees, and the present value of deferred and contingent consideration. Amortization of the licensed developed technology is calculated on a straight-line basis over the 20-year initial term of the license.

The Company develops certain software applications related to product offerings. Research and planning phase costs related to software development are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. The Company amortizes its software development costs, upon initial release of the software or additional features, on a straight-line basis over an estimated useful life between 3 to 7 years.

Impairment of Long-Lived Assets

Finite lived intangible assets including capitalized software are tested for recoverability whenever events or changes in circumstances indicate that it's carrying amount may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. An impairment expense is recognized when the estimated undiscounted future cash flows are less than the asset's carrying amount being the excess of the carrying value of the impaired asset over its fair value.

Leases

The Company determines if an arrangement is a lease at inception. Right-of-use ("ROU") assets and liabilities for operating leases and finance leases are recognized at the commencement date based on the present value of future minimum lease payments over the lease term. When the rate implicit in the lease is not known or determinable, the Company uses its incremental borrowing rate at lease commencement to measure lease liabilities and ROU assets. The lease term may include an option to extend or terminate early when exercise of that option is considered reasonably certain. Reductions to finance lease ROU assets are recognized as amortization on a straight-line basis over the lease term. Reductions to operating lease ROU assets are recognized as lease cost on a straight-line basis over the lease term.

Fair Value of Financial Instruments

The Company's financial instruments including cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses are carried at historical cost. As of December 31, 2025 and 2024, the carrying amounts of these financial instruments approximated their fair values because of their short-term nature. The carrying amount of the long-term debt outstanding under the SWK Loan Agreement approximate their fair values, as interest rates on these borrowings approximate current market rates.

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels.

Level 1 Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, at the measurement date.

Level 3 Inputs are unobservable for the asset or liability and usually reflect the reporting entity's best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

The Company determined that certain warrants to purchase common stock satisfy the criteria for classification as equity instruments as the settlement provisions require physical settlement or net-share settlement. The Company also determined that certain contingent common shares issued in connection with the Nexa acquisition satisfy the criteria for classification as equity instruments as the settlement obligation is in a fixed number of shares of the Company or cash settlement. These shares were issued and settled as part of the Admission in 2024.

Earnings (Loss) Per Share

The Company computes basic earnings (loss) per share by dividing income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding. The weighted average number of shares includes shares held by the AOTI Employee Benefit Trust ("EBT"). The Company computes diluted earnings (loss) per share after giving consideration to all potentially dilutive securities outstanding during the period using the treasury stock method or the if-converted method based on the nature of such securities. For periods in which the Company reports net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because potentially dilutive shares are not assumed to have been issued if their effect is anti-dilutive. 

Prior to Admission in 2024, the Company affected a share split and the common stock pre-Admission of par value $0.0001 in the Company was split into ten common shares increasing the number of options held by a multiple of ten.

Revenue Recognition

The Company enters into contracts to sell single-use and consumable extremity or sacral systems and/or to rent reusable extremity systems. The selling and rental portions of the invoices are capable of being distinct and accounted for as separate performance obligations.

Revenue Accounting under ASC 606

The Company's sale of medical equipment, parts and supplies provided to customers are recognized under ASC 606, Revenue from Contracts with Customers. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for such products. Performance obligations are complete, and revenue is recognized 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.

Revenue Accounting under ASC 842

The Company's rental transactions are accounted for under ASC 842, Leases. Equipment rental revenue includes revenue generated from renting medical equipment to customers and is recognized 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.

Managed Medicaid

For customers whose payments are reimbursed through Medicaid Services ("Medicaid"), the Company enters arrangements either directly with the payor (insurer), through in‑network agreements, or via single‑case agreements for the provision of covered services under Federal and State Law.

Prior to revenue being recognised, the following conditions must be in place:

·      Prior approval from the payor (insurer) when required under Medicaid rules,

·      Validation of the patient's insurance coverage to confirm eligibility for the covered service and patient consent,

·      Confirmation that the therapy is medically necessary, consistent with State and Federal directives,

·      Receipt of the therapy or equipment by the patient, indicating that access to the therapy has been provided

Once these conditions are met, the Company begins satisfying its performance obligation by making the therapy available for the patient's use and maintaining it in functional condition throughout the treatment term. The performance obligation related to the rented equipment is considered satisfied over the rental period, and the performance obligation related to the consumable products are considered satisfied at the point of delivery.

Veteran's Administration

In 2009, the Group was awarded a five-year Federal Supply Schedule (FSS) contract for the therapy within the US Department of Veterans Affairs (VA) which has seen contract extensions over that time. The Company's FSS contract is now active through to 14 June 2029, enabling AOTI to continue to provide its therapy and products to clinicians and veterans within the VA and other federal healthcare programs. The performance obligations of the Company's medical equipment rentals to customers through the Department of Veterans Affairs (the "VA") are satisfied over the period of time that the products are being rented by the customers, or the "rental period". Rental periods are typically for 30, 60, or 90 days. Performance obligations are deemed complete upon receipt of the equipment by the customer and revenue is fully recognized at the end of each 30 days during the rental period.

Other

For sales to distributors, hospitals and other health care service providers, revenue is recognised when title is transferred to the party and they have assumed control, the timing of which depends on the contractual terms.

Revenue consists of the following as of December 31 (in thousands):

	Year Ended December 31,
	2025		2024
Equipment rentals	$    37,661		$   32,439
Product sales, net of returns and allowances	28,876		25,920
Total revenues	$    66,537		$   58,359

Invoices with incomplete equipment rental period performance obligations as of the end of the period are recognized as deferred revenue on the consolidated balance sheets. Invoices for which payment was received and performance obligations, including rental periods and delivery of sales products, were incomplete as of the end of the period are recognized as deferred revenue on the consolidated balance sheets. Deferred revenue consisted of the following as of December 31 (in thousands):

	December 31,
	2025		2024
Incomplete equipment rental performance obligation	$         1,621		$       1,584
Payment received in advance of service delivery	888		797
	$         2,509		$       2,381

The United States accounted for 98% of consolidated revenue in 2025 (98% in 2024). The remaining revenue relates to markets across our international business. 

Payments from customers are generally due based on the contractual billing terms, which typically require prepayment, or payment within typically 30 - 90 days from the date of invoice, depending on the customer type and contractual arrangements. Frequency of claim denials, which can contribute to slower payment patterns will impact the timing of payment collectability.

Invoices are issued upon satisfaction of the related performance obligation or in accordance with agreed billing milestones. The Company has assessed its contracts with customers and determined that they do not contain a significant financing component, as the timing between the transfer of goods or services and customer payment is generally less than one year, and the primary purpose of the payment terms is to provide customers with standard credit terms rather than financing.

The Company generally expenses sales commissions when the corresponding revenue is recognized. These costs are recorded as operating expenses. Certain contracts provide for rebates and other customer incentives which are deemed to be variable consideration. The Company calculates and records these rebates as a reduction in sales based on contractual rates.

Income Tax

The Company uses the asset and liability method of accounting for and reporting income taxes in accordance with ASC 740. Deferred income tax assets and liabilities are computed annually and are recognized based on the differences between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to adjust deferred tax assets to the amount expected to be realized. The provision for income taxes represents the current taxes payable for the period and the change during the period in deferred tax assets and liabilities.

The Company's federal income tax returns for 2022 tax year and beyond remain subject to examination by the Internal Revenue Service. The Company's state income tax returns for 2021 tax year and beyond remain subject to examination by state tax jurisdictions. The Company's wholly owned foreign subsidiary, AOTI Limited, files tax returns in Ireland. The Company's wholly owned foreign subsidiary, Nexa Medical Limited, files tax returns in The United Kingdom. The Company recognizes interest and penalties for unrecognized tax benefits, if any, through interest and operating expenses, respectively. No interest and penalties for unrecognized tax benefits were recognized during any of the periods presented.

ASC 740 provides detailed guidance for financial statement recognition, measurement, and disclosure of uncertain tax positions. It requires an entity to recognize the financial statement impact of a tax position when it is more likely than not that the position will not be substantiated under examination. The Company files income tax returns in the United States and various state and local jurisdictions. As of December 31, 2025, the Company had no uncertain tax positions. See below 'Accounting Standards Adopted in 2025' for the impact of the adoption of ASU 2023-09, Income Taxes.

In July 2024, the One Big Beautiful Bill Act (the 'Act') was enacted, extending or reinstating certain provisions of the 2017 Tax Cuts and Jobs Act. Management evaluated the Act's implications on our current ‑year tax position and implemented the changes enacted. The changes did not have a material impact on our effective tax rate, cash tax expectations, or deferred tax balances for the year. We will continue to monitor future regulatory guidance and assess any potential impacts on our tax strategy and projected result.

Advertising Costs

The Company expenses advertising costs as they are incurred. Advertising expense for the years ended December 31, 2025 and 2024, was approximately $2,371,000 and $2,038,000, respectively, and is reflected within other operating expense in the consolidated statements of operations.

Share-based Payments

The Company's share-based compensation consists of share options and restricted share units. The Company recognizes share-based compensation as a cost within salaries, wages and benefits in the consolidated statements of operations. Equity-classified awards are measured based on the grant date fair value of the share-based compensation award. The grant date fair value of restricted share awards is determined based on the quoted trading price of the Company's share on the London Stock Exchange on the date of the grant. Restricted share awards are equity classified awards. The Company recognizes share-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period using the straight-line method. For share options with performance conditions, the Company records compensation expense when it is deemed probable that the performance condition will be met. Excess tax benefits of awards related to share option exercises are recognized as an income tax benefit in the consolidated statements of operations and reflected in operating activities in the statement of cash flows. The Company recognizes forfeitures at the time they occur.

Offering Costs:

The Company applies ASC 340 Other Assets and Deferred Costs for the treatment of offering costs. The Company identified specific incremental costs directly related to the Admission in 2024. These costs consist primarily of legal, advisory and accounting expenses and are directly linked to the Admission. Total costs of $7,136,000 were charged against the gross proceeds of the Admission transaction, of which, $4,804,000 was settled by way of cash and $2,332,000 was settled by way of restrictive shares issued to an independent contractor which have been capitalized as part of the Admission transaction.  No additional costs were incurred in 2025 related to the Admission.

Comprehensive Income (Loss)

For all periods presented, net profit (loss) is the same as comprehensive income (loss) as there are no comprehensive income items.

Accounting Standards Adopted in 2025

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amended guidance enhances income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information. This guidance requires disclosure of specific categories in the effective tax rate reconciliation and additional information on reconciling items meeting a quantitative threshold. In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes. It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) are equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amended guidance is effective for annual periods beginning after 15 December 2024. We adopted this guidance prospectively for the annual period ending 31 December 2025. For additional information, see "Note 7 - Income Taxes."

Accounting Standards Issued But Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. This standard is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, on a prospective basis, with early adoption and retrospective application permitted. The Company has not yet adopted ASU 2024-03 and is still evaluating the impact of the adoption on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provided a practical expedient for all entities for the calculation of current expected credit losses on current accounts receivable and current contract assets. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which aims to modernize the guidance to better align with current software development practices. The amendments will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

No other new accounting pronouncements were recently issued or adopted that had or are expected to have a material impact on our financial statements.

Note 3 - Property and Equipment

Property and equipment consisted of the following as of December 31, 2025 and 2024 (in thousands):

	December 31,
	2025		2024
Medical equipment, available for lease	$      6,296		$     6,002
Computers and software	586		453
Furniture and equipment	140		90
Leasehold improvements	70		58
Property and equipment - cost	7,092		6,603
Less accumulated depreciation	(4,281)		(3,257)
Property and equipment - net	$      2,811		$     3,346

Depreciation expense for the years ended December 31, 2025 and 2024 was $1,226,000 and $925,000, respectively.

Note 4 - Intangible Assets

Intangible assets consisted of the following as of December 31, 2025 and 2024 (in thousands):

		December 31,
			2025							2024
			Weighted Average Remaining Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Nexa License			16.8	$    9,615		$  (1,522)		$    8,093		$    9,615		$      (1,042)		$8,573
Patents			4.2	508		(413)		95		508		(389)		119
Software in development			-	1,391		-		1,391		323		-		323
Total intangibles				$  11,514		$   (1,935)		$    9,579		$ 10,446		$       (1,431)		$ 9,015

Amortization expense was $504,000 and $490,000 for the years ended December 31, 2025 and 2024, respectively. In 2024, the Company reduced the gross carrying amount of the capitalized license following the settlement of the contingent deferred consideration payable as part of the Nexa acquisition.

We performed a qualitative assessment on the Nexa asset and respective license, considering historical performance, market outlook and updates to future operating plans, to determine if there was any triggering event for impairment testing. Based on this assessment, we concluded that there were triggering events for impairment testing for the Nexa License. After performing a recoverability test, we concluded that the carrying amount of this asset group is recoverable with the sum of the undiscounted cash flows expected to result from the use of the asset group exceeding its carrying amount as of December 31, 2025.

The estimated amortization expense, excluding software development costs that are not yet being amortized, for each of the five succeeding fiscal years and thereafter as of December 31, 2025, is as follows (in thousands):

Year ended December 31,
2026			$      504
2027			504
2028			504
2029			504
2030			482
Thereafter			5,690
Total amortization			$   8,188

Note 5 - Long-Term Debt

Long-term debt consisted of the following as of December 31, 2025 and 2024 (in thousands):

	December 31,
	2025		2024
Long-term commitment: Principal outstanding	$        19,478		$     8,478
Less: Unamortized financing fees	(115)		(45)
Plus: Accrued debt exit fee due on maturity	494		-
Total long-term debt	$        19,857		$     8,433

As of December 31, 2025, scheduled maturities of long-term debt by year were as follows (in thousands):

Year ended December 31,
2027			$      2,784
2028			5,568
2029			11,126
Total principal			$    19,478

Long-term Commitment

On March 21, 2022, the Company entered into a loan agreement with SWK Funding LLC for the principal amount of $12,000,000 with maturity on or before March 21, 2027.

In March 2023, the Company entered into the first amendment to the loan agreement which replaced LIBOR as the reference rate with the Term Secured Overnight Financing Rate ("SOFR"). In addition, the contract rate on borrowings was amended from LIBOR plus 9.95% to Term SOFR plus 10.20%. The Company and its lender agreed to a second amendment on September 10, 2023, to reduce the cash covenant from the end of October 2023.The Company and its lender agreed to a third amendment on February 14, 2024 to capitalize the February 2024 interest into the principal of the loan for an amount of $478,000. On April 26, 2024, the Company and its lender agreed on the fourth amendment, which increased the principal to $14,000,000 and completed a drawdown of an additional $2,000,000. The Group and its Lender agreed to an amendment on the 17^th of May 2024 to reduce its minimum EBITDA covenant requirement. In July 2024, the Company made a $6,000,000 payment reducing the outstanding principal to $8,478,000.

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 3.15% effective immediately.

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 upsizing of the facility by $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 $494,000 charge recorded within interest expense. The Company incurred and capitalized $93,000 of lender fees during the period. As of December 31, 2025, the total loan balance was $19,478,000, and the effective interest rate on the facility was 13.18%.

The loan agreement provides that the Company comply with certain financial covenants. The Company amended the covenants on its SWK loan in August 2025 reducing revenue and EBITDA thresholds. The covenants are tested on a calendar‑quarter basis 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 $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 $6,000,000 as at 31 December 2025 and reaching $6.8 million from 31 December 2026 onwards. At December 31, 2025 the Company was in compliance with all required covenants.

Note 6 - Leases

The Company leases properties for office, manufacturing and warehouse space. These leases may provide for periodic rent increases and may contain extension or early termination options. In calculating the lease liability, an option to extend or terminate the lease early is included in the lease term when it is reasonably certain the option will be exercised. Some leases require additional payments for common area maintenance, taxes, insurance, and other costs which are not included in calculating the lease liability by accounting policy election.

The ROU assets and lease liabilities are based on the lease components as identified in the underlying agreements. A lease component is the cost stated in the agreement that directly relates to the right to use the identified assets. Right of use asset depreciation was $430,000 and $315,000 for the years ended December 31, 2025 and 2024, respectively.

The Company made an accounting policy election to not apply the lease accounting requirements to short-term lease arrangements with an initial term of 12 months or less.

Operating lease expense was $445,000 and $333,000 for the years ended December 31, 2025, and 2024, respectively.

Supplemental quantitative information related to operating leases for the years ended December 31, 2025, and 2024 is as follows (in thousands):

	December 31,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from right of use assets and operating leases	$         396		$        315

	As of December 31,
	2025		2024
Weighted-average remaining lease term in years for operating leases	3.31		1.52
Weighted-average discount rate for operating leases	4.0%		4.2%

As of December 31, 2025, maturities of operating lease liabilities were as follows (in thousands):

Year ended December 31,
2026			$      454
2027			435
2028			249
2029			201
2030			78
Total lease payments			1,417
Less: amount representing interest			(89)
Present value of operating lease liabilities			1,328
Less: current portion of operating lease liabilities			(411)
Long-term operating lease liabilities, net of current portion			$      917

Note 7 - Income Tax

The income/(loss) from operations before tax (expense) benefit was as follows (in thousands):

	Year Ended December 31,
	2025		2024
Domestic	$             1,881		$          (6,025)
Foreign	1,167		5,080
Total income / (loss) before income taxes	$             3,048		$            (945)

The components of the income tax expense for the years ended December 31, 2025 and 2024, were as follows (in thousands):

	Year Ended December 31,
	2025		2024
Current:
Federal	$                501		$                   -
State	68		36
Foreign	218		744
Total current	787		780
Deferred:
Federal	$            (254)		$                269
State	-		-
Foreign	(151)		(237)
Total deferred	(405)		31
Total Income tax expense	$               382		$                811

The components of deferred tax assets and liabilities are as follows (in thousands) *:

	December 31,
Deferred tax assets	2025		2024
Net operating losses and credit carryforwards	$             2,091		$             2,560
Allowance for doubtful debts	673		290
Accrued expenses	814		166
Operating lease liabilities	270		65
Stock compensation	1,558		1,527
Business Interest Limitation	199		271
Other	117		94
Total deferred tax assets	5,722		4,973
Valuation allowance	(4,356)		(3,942)
Deferred tax assets recognized	1,366		1,031
Deferred tax liabilities
Right of use asset	(285)		(59)
Unremitted earnings	(1,329)		(1,583)
Depreciation and amortization	(1,190)		(1,233)
Total deferred tax liabilities	(2,804)		(2,875)
Net deferred tax assets / (liability)	$          (1,438)		$         (1,844)

*The deferred components have been realigned to more accurately represent each description.

A reconciliation of the statutory US income tax rate upon adoption of ASU 2023-09 is as follows (in thousands):

	Year Ended 31 December 2025
	$ Amount		%
US federal statutory income tax rate	$                  639		21.00%
State and local income tax, net of federal income tax effect**	54		1.78%
Foreign tax effects
Ireland
Foreign rate differential	(139)		(4.56%)
Unremitted earnings liability	(254)		(8.34%)
Return to provision	(49)		(1.63%)
Other foreign jurisdictions	(16)		(0.53%)
Effect of cross-border tax laws
Subpart F Income	147		4.83%
Tax Credits
Foreign tax credits	(137)		(4.51%)
Changes in valuation allowance	294		9.67%
Non-taxable or non-deductible items	55		1.79%
Other, net
Federal receivable true up	(212)		(6.96%)
Effective income tax rate	$           382		12.54%

** Arizona and Texas state taxes made up the majority (greater than 50%) of the tax effect.

Income tax expense for the year ended December 31, 2024, differed from the amounts computed by applying the U.S. federal income tax rate to pretax income as a result of the following:

	Year Ended 31 December 2024 *
Federal statutory income tax rate	21.00%
State taxes, net of federal benefit	5.65%
Foreign tax rate differential	63.63%
Effect of foreign/US eliminations	7.66%
Change in deferred tax liabilities	9.24%
Change in valuation allowance	(68.18%)
Federal permanent items	(136.89%)
Other, net	1.29%
Effective tax rate	(96.60%)

* As presented prior to the adoption of ASU 2023-09 that was adopted prospectively in 2025.

Cash paid for those jurisdictions in excess of 5% of the total income taxes paid, net of refunds were as follows (in thousands):

	Year Ended 31 December 2025
Federal	520
Ireland	796
Other	99
Total	1,415

The Company has utilized all federal net operating losses carried forward as of 31 December 2024. The Company had $8,240,000 and $10,300,000 of state net operating losses carried forward as of 31 December 2025 and 2024, respectively. The state net operating losses begin to expire in 2036. The Company had foreign net operating losses of $1,794,000 and $1,800,000 as of 31 December 2025 and 2024, respectively. The foreign net operating losses do not expire. Lastly, the Company had $1,160,000 and $1,539,000 of federal foreign tax credits carried forward as of 31 December 2025 and 2024, respectively.  The federal foreign tax credits begin to expire in 2031.

The Company evaluates the need for a valuation allowance, based upon both positive and negative evidence, if it is more-likely-than-not the deferred tax assets will not be utilized. The Company determined its US federal, and state deferred tax assets were more-likely-than-not to be realized. The valuation allowance as of 31 December 2025 and 2024 was $4,356,000 and $3,942,000, respectively.

The Company has asserted it is not permanently reinvested in its foreign jurisdictions, specifically Ireland. The Company has recorded a deferred tax liability for the unremitted earnings as of 31 December 2025, and 2024 in the amount of $1,329,000 and $1,583,000, respectively.

Note 8 - Related Party Transactions

There were no related party transactions in 2025. The Company received a $1,000,000 loan from certain executives during 2024, which was settled in full (part cash and shares) in conjunction with the IPO in June 2024 along with $24,000 of interest. The remuneration of the Directors is set out in the Remuneration Committee Report and in note 9.

Note 9 - Directors Emoluments

	Year Ended December 31,
(In thousands)	2025		2024
Remuneration for management services	$      1,590		$     1,574
Pension costs	54		47
Share-based payments	33		3,123
	$      1,677		$     4,744

Note 10 - Stock-based Compensation

On March 21, 2022, the Company adopted the AOTI Inc. 2022 Equity Incentive Plan (the "Plan") for the purpose of motivating, attracting, and retaining key employees and contractors. The aggregate number of shares reserved and available for issuance under Share Option Awards ("Share Options") granted under the Plan is 9,160,000 (916,000 prior to the share split referenced below. The Stock Options have a term of ten years. The Company recognizes expense on a straight-line basis over the requisite service period which is generally three years. In limited circumstances, the Company will issue Stock Options that vest upon issuance.

A summary of option activity under the Plan for the years ended December 31, 2025 and 2024, is presented below:

	Number of shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)
Balance, January 1, 2024	7,350,000		$               0.96		8.5
Granted	688,333		0.67		0.9
Exercised	-		-		-
Forfeited or expired	(480,000)		0.96		-
Balance, December 31, 2024	7,558,333		0.93		7.7
Granted	200,000		0.05		1.0
Exercised	-		-		-
Forfeited or expired	(50,000)		0.05		1.0
Balance, December 31, 2025	7,708,333		0.93		6.4

	Number of shares		Weighted Average Exercise Price
December 31, 2025:
Share options exercisable	7,350,000		$               0.96
Share options remaining to vest	358,333		-
December 31, 2024:
Share options exercisable	7,350,000		$               0.96
Share options remaining to vest	208,333		-

Compensation cost relating to share-based payment awards has been recognized as an operating expense in salaries, wages and benefits in the consolidated statement of operations, in the amount of $33,000 and $1,330,000 for the years ended December 31, 2025 and 2024, respectively, and is included in salaries, wages, and benefits expense in the consolidated statements of operations.

As of December 31, 2025, the remaining unrecognized compensation expense related to nonvested share awards is $50,000 to be recognized over the remaining vesting periods through 2027 (in thousands).

In 2024, four employees and one independent contractor of the Company were entitled to cash bonuses upon a sale of the Company or similar transaction which were intended to be paid by the Company in connection with the contemplated Admission. The Board of Directors approved satisfying such cash bonuses by the issuance of common shares in the capital of the Company in connection with the Admission, and such shares were issued by the Company on 1 September 2023. These shares are restricted stock and vested upon Admission. $3,747,000 is recognized within salaries and wages for the employees grant vesting on Admission. In relation to an independent contractor $2,332,000 is capitalized as part of the offering costs recognized on Admission. The independent contractor was subsequently appointed as Chairman to the Board following the Admission.

In December 2024, the Company granted an award over ordinary shares in the form of nominal cost options (Performance Awards) under the AOTI Long Term Incentive Plan (LTIP) to the CFO. The Performance Awards will vest three years from the grant date conditional on meeting three-year performance conditions. The number of performance awards granted was 208,333 ordinary shares with a nominal exercise price.

In 2025, the Company granted a restricted stock award to a non-employee. The number of restricted stock granted (RSU) was 200,000 ordinary shares with a nominal exercise price, and vesting is subject to performance conditions. RSU stock compensation cost is measured at our common stock's fair value based on the market price at the date of grant. We recognize stock compensation cost only for RSUs that we estimate will ultimately vest.

Shares held by Employee Benefit Trust

In 2025, the Company established the 'AOTI Employee Benefit Trust' for the purpose of holding shares to satisfy the requirement if any share schemes operated by the Company. At December 31, 2025, the trust held 254,060 of the Company's own shares, which were acquired at a total cumulative cost $204,000, in respect of potential future awards relating to the Company's employee share plans. There have been no shares transferred from the EBT during the year.

Note 11 - Commitments and Contingencies

Legal Proceedings

The Company is not currently subject to any material legal proceedings; however, the Company may from time to time become a party to various legal proceedings and claims arising in the ordinary course of business.

Note 12 - Earnings / (Loss) Per Share

The computation of basic and diluted earnings (loss) per share for the years ended December 31, 2025 and 2024, was as follows (in thousands, except number of shares and per-share amounts): 

	Year Ended December 31,
	2025		2024
Numerator:
Net profit / (loss)	$        2,666		$   (1,756)
Denominator:
Weighted-average shares outstanding, basic	106,359,163		95,756,651
Weighted-average shares outstanding, diluted	114,067,496		95,756,651
Earnings / (Loss) per share
Basic	$         0.03		$      (0.02)
Diluted	$         0.02		$      (0.02)

On 30 May 2024, the Company effected a share split pursuant to which each existing common share of par value $0.0001 was split into 10 Common Shares of par value $0.00001 each, so increasing the total number of shares in issue by a multiple of 10. Outstanding common shares for all periods presented have been restated to reflect the share split.

For the year ended December 31, 2024, the effect of 7,558,333 shared-based awards have been excluded as their effect would be anti-dilutive.

Note 13 - Subsequent Events

In February 2026, and with respect to the ongoing reimbursement issues in Arizona, the Company announced that to limit further exposure until a resolution was achieved, while minimizing the impact to existing patients, the Company expects to cease treating new Arizona Medicaid patients from 1 April 2026.

No other subsequent events were identified.

 

END