Good morning and welcome to the AOTI Four-Year Results Investor Presentation. Throughout the recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time via the Q&A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself, however, the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO and President Mike Griffiths. Good morning to you, sir.
Yes, good morning. Welcome, everybody. I'm Mike Griffiths, CEO and one of the founders of AOTI, which is a category-leading MedTech company focused in the advanced wound care sector that went public on June 18th of 2024 on the AIM market, and we're going to be presenting our fiscal year 24 results. Normal disclaimers. A little bit of my background: I've been in the MedTech space for just approaching 40 years now, originally working for various corporate entities, larger conglomerates, and for the second half of my career in startups, where I did my first startup back in 2000, which I exited and started then in 2007, AOTI, which we are now building into an industry-leading entity. I'm here with my CFO, Jayesh Pankania. I'll let you.
Hi, everyone. I'm Jayesh Pankania, CFO of AOTI. I've got over 25 years of senior finance experience in mainly large listed businesses, and about seven years ago, I started to help smaller companies like AOTI scale. I've been with the business for about a year now. Thank you.
Thanks, Jayesh, so we're going to give a brief corporate overview, followed by a dive into the financials for 2024, a little bit then on our execution and commercial strategy with a conclusion, and then obviously, we will go to the questions and answers, so we're quite unique in the fact that we're not another me-too company with products in the wound care space. What we are doing is actually creating a new segment called topical oxygen therapy with a unique product that's been proven to demonstrate more sustained healing, so healing of chronic wounds and keeping them healed such that then we can articulate a strong value-based proposition for payers and clinicians and patients. If we look at who we are, our mission, our vision is to save the limbs and save the lives by healing these wounds more durably.
We'll see what we mean a little bit more about that in chronic wounds. Our mission is simple: helping people with chronic disease get back to living their lives to the fullest. By healing these wounds, they are allowed to mobilize and live life and move forward. The chronic wound care sector is part of chronic care, and this is where our values come into play. We're thinking big because we're addressing one of the largest consumers of healthcare resources, chronic care, with a more durable, sustainable outcome. We make a difference because we heal these wounds and keep them healed, so reducing suffering for patients, consumption of precious clinical resources, and of course, significant cost savings. We work together with all stakeholders. It's critical that we work with patients to engage them in their care, that we also work with providers and with payers.
Last but not least, unlike every company in the space of wound care, is we always do the right thing. We are focused on healing wounds and saving money the proper way and the right way. Our market is a huge market sector. The advanced wound care market itself, they estimate is around $15 billion. We're focused on those more hard-to-heal wounds within that sector currently, which is greater than the $5 billion market sector. If we look at how then the wounds, the type of wounds we're focused on, we'll start on the left here. We focus on initially is diabetic foot ulcers. This is related to patients who develop diabetes. As you know, diabetes is epidemic proportions everywhere in the Western world, double-digit prevalence. A third of all diabetics, though, will develop what they call a diabetic foot ulcer in their lifetime.
Those ulcers won't heal due to their diabetes, and half end up being infected. The number one reason diabetic patients are hospitalized is due to diabetic foot ulcer infections. Sadly, about 20% of them result in an amputation. Now, if you have a diabetic amputation, it has enormous impact on not just your quality of life, but potentially on your length of life. The U.S. alone spends over $200 billion managing diabetic complications. The diabetic foot care sector alone consumes close to $80 billion of that, which is about what the U.S. spends on all cancer treatments. If you look at the graph at the bottom, this shows correlating diabetic foot ulcers and potential amputations with the outcomes for various types of cancer. The way we look at success in cancer healing is the mortality over five years.
Just having a diabetic foot ulcer means that you have a mortality somewhat equivalent to the average of all cancers, so somewhere around 30%. If that then leads to a minor amputation, you lose some toes or half your foot. That increases nearly 50%. And sadly, if you end up having a major amputation above knee or below knee amputation, your likelihood of being alive at five years is less than half. So again, this is a hidden epidemic where the severity and the cost and the impact of it is really not known to the general population. Relating directly to the U.K., the U.K. spends about 1% of the entire NHS budget on diabetic foot care, which is, as you know, the entire budget is estimated to be about GBP 192 billion in 2025.
Now, another area of chronic wounds that relates to ulcers that appear or occur on the patient's legs, less on their feet, and due to a completely different condition is venous leg ulcers. And these are ulcers where there's a lot of swelling and your venous side of your blood supply results in leaking into the tissue. You get a lot of discoloration, a lot of swelling, and it's very, very painful. And these ulcers tend to, these patients tend to suffer with these wounds under a lot of pain and discomfort for decades. And as you can see here, the statistics are no better here. About 60% of them heal maybe over 12 weeks, but sadly, three-quarters of those then reoccur. So it's a revolving door of pain and suffering. So we can heal these types of ulcers more sustainably, more durably.
We can relieve a lot of suffering and obviously save a lot of healthcare resources. So what is our therapy? Well, we have a unique TWO2, we call it. It's a multi-modality therapy that combines oxygen with non-contact compression. By cycling the gas up and down, we compress the limb and humidification. It's the combination of this multi-modality therapy. You can see some pictures on the side here, which means a controller unit with a disposable chamber that goes around the limb if it's an extremity wound or with what we call a multi-bed system that's used on the body.
What's unique about this therapy is by combining these things, which we have patented this approach, we're able to demonstrate that we're not only better at healing these chronic wounds, and our studies show we're six times more likely to heal them at 12 weeks, but more importantly, the quality of the healing is such that we lessen their recurrence six-fold over 12 months. That results then in significant reductions in the need for hospitalizations and then in the amputations that result, over 80% reduction in hospitalizations and 71% reduction in amputation. It's this long-term durable healing that really separates us from other products in the wound care space. We also have a best-in-class disposable negative pressure, which is another adjunctive modality used in wound care that allows us to transition patients from hospital settings to subacute to home care more effectively.
If we look at the U.S. market, where we've been focused on predominantly, and we look at then the benefits of our therapy, because we heal these wounds more durably, we've been able to articulate a very clear budget impact model to payers, and if we look at four states that we've been able to open up in what we call the Medicaid sector, we can demonstrate with only 50% adoption of just diabetic foot ulcer patients alone, of these hard-to-heal diabetic foot ulcers, we can save generally about 16% of the total cost of managing those patients to the payers, so again, one of the benefits here is it's not only got enormous clinical and quality of life improvements for patients, but has significant cost-saving potential to the payers, whether it be the NHS or the government or the insurer in the U.S.
2024 was a great year for us, our first year since going public, a very solid performance, and we increased our market access for our unique TWO2 therapy. We were able to grow delivery across all business sectors, including, we'll see in a moment, the Medicaid sector, which grew much faster than we had expected. We are able to provide registrations in a number of new states so we can continue to expand into Medicaid sectors and have now nine Medicaid states where we're able to operate in. In the historical VA Federal Supply Schedule sector, which is the Veterans Administration, we were able to get a five-year extension to our contract and improve our payer terms. Our historical core business not only solidified, but we were able to improve payment terms.
We also commenced another multi-center state-of-the-art randomized trial for our therapy to show efficacy in venous leg ulcers to supplement that, what we have in diabetic foot ulcers. CMS, which is the Centers for Medicare and Medicaid Services in America, commenced their review of topical oxygen therapies for reimbursement in the traditional Medicare sector, which is the over 65 in America. We also invested significantly in opening up market channels in sectors outside of the VA, including workers' compensation, long-term care, and skilled nursing facilities, so broadening our portfolio of segments that we can market into. With our negative pressure, we launched our NEXA product last year after receiving expanded marketing clearance in the US, which is called FDA 510(k), to include the home care setting.
This is a unique product that allows, as we said, more effective transition of patients out of hospitals to long-term care or home care. To help target the skilled nursing and long-term care sector, we signed a distribution agreement with a large wholesale medical- surgical supplier to give us some feet on the ground into that sector. We were able to add the NEXA product line to our federal contract, which will allow our reps in the federal space to also start marketing. We continue to strengthen building our organization out, and we were able to build ourselves up to 85 full-time equivalent sales reps in the U.S. now, up from 67.
We also strengthened our senior management team with the appointment of Jayesh, you heard, as our CFO, and the movement of our Chief Operating Officer, sorry, our previous CFO into the Chief Operating Officer role to focus on execution of operations and by bringing on board a new independent board of directors with experience. And we've further expanded our market access team, focusing on our value-based implementation model, which we'll talk about in a little bit later. So what I'll do is I'm going to pass you over to Jayesh. He's going to walk through the financial review.
Thanks, Mike. So how did we do for 2024? We showed strong revenue growth, up almost 33% across all the business segments to $58.4 million compared to $43.9 million in 2023. The VA was up 9% at $34.4 million. Medicaid had a really strong performance, up 84% at $21.5 million.
Other areas, which consist of international, U.S. commercial, and NEXA, grew threefold to $2.5 million. As per our strategy at IPO, the mix has shifted away from the VA. In 2023, the VA represented about 70% of our revenues, and now in 2024, it's under 60%. In terms of the margin performance, we've maintained margins at the high 80s level in the year. You can see that that's a consistent theme over the last five years. Over the last five years, you can see we've consistently delivered revenue growth of 32% per annum on average. Just wanted to remind folks that 2022 and 2023 were our accelerated investment periods where we made deliberate investments in our market access, commercial, and finance teams to really strengthen the organization for future growth. In those years, Adjusted EBITDA were typically lower than you would expect.
So they were around under 10% Adjusted EBITDA margin. And so in 2024, we're starting to head towards more level of Adjusted EBITDA margin than you would expect. And 2024, we got to under 13.8%. And in the medium term, you'd expect that to be sort of nearer 20%. Key drivers of growth then for 2025 would be expansion into new states and also accessing some of the third-party private channels such as distribution, skilled nursing facilities, Workers' Compensation, and post-acute. In terms of our income statement, I've spoken about revenue before. And just to highlight that our gross profit margin improved between 2023 and 2024 from 85.6%- 88%. And that's driven mainly by a mix away from VA towards Medicaid and other areas, which has a higher margin.
On a profit side of things, our loss before tax improved from a loss of $7.7 million to a loss of $0.9 million. And if you take out one-off costs, which I'll explain on the next slide, our underlying loss went from a loss of $1.6 million in 2023 to a profit of $4.3 million in 2024. So you can see some operating leverage come through the business as we scale. This slide shows us how we arrive at our Adjusted EBITDA margin. Adjusted EBITDA went from $1.7 million last year to $8.1 million this year, a growth of over 300%. The key adjustments to Adjusted EBITDA are one-off costs as a result of our IPO. And the margin improved almost 10% from 3.9% to 30.8%. On the balance sheet side of things, the first thing to point out is our cash balance has improved tremendously.
We had a cash balance of around $800,000 in 2023, and that's up to over $9 million in 2024. Similarly, our net debt position has moved to a net cash position. We did have a net debt of $11.2 million, and that's now improved to a net cash position of $0.9 million. The other area of change is our trade accounts receivables balance. That was $5.2 million last year, and it's increased to $30.4 million this year. That's mainly for two reasons. VA tends to pay on provision of service, which is pretty much in advance, whereas the other areas of the business pay on normal commercial credit terms. The business has seen that side of business double almost, and so you would expect to see some increase as a result of that.
In addition to that, we had some certain payer issues in one state, which has meant that the time it takes to process and approve invoices is taking much longer than normal, and that's led to a build-up in some of that balance. That situation is now starting to resolve itself. On the net cash side, as I said, our net debt started out at -$11.2 million at the end of 2023. Our operating cash flow for the period was an outflow of $5.9 million, and that's mainly the consequence of the increase in the trade accounts receivables. We invested around $1.9 million in our property, plant and equipment, which consists mainly of our home care controllers and also an investment in our Eyes on the Wound platform, which Mike will take you through a little bit later in this presentation.
The net cash share proceeds from the IPO was $19.9 million, which leaves us with a net cash position at the end of last year of $0.9 million. Now, where do we see ourselves in 2025? We're still expecting to see strong revenue growth in the range of around 27-30%, and that's despite some uncertainties in the anticipated U.S. market at the moment. On that basis, we're expecting Adjusted EBITDA to be in the range of 14-16%, mainly in the second half, weighted towards the second half of the business, as some of the new business areas that we're investing in start to gain meaningful traction. I'll hand back over now to Mike to talk us through a bit more on the commercial model.
Thank you, Jayesh. We, as a company, have a number of key pillars that are critical to our commercial success. The first is we're in a very large market segment that has a lot of costs associated to these hard-to-heal chronic wounds, which focus around diabetes, venous, and pressure ulcers. We have a unique best-in-class patent-protected and transformative therapy that delivers sustained clinical outcomes and an exceptional level of evidence supporting that, both randomized clinical trials, but also real-world studies showing generalizability. We have built and continue to build an experienced team in the chronic disease and wound care space. And last but not least, we are strategically a durable medical equipment provider. We don't just make the products.
We actually deliver and manage the patients at home on the products, which puts us in the patient's home, which is an enviable position to be, particularly in the wound care space, because it allows us to actually control delivery of outcomes and performance-based value care. Now, if you're not familiar with the U.S. healthcare sector, the U.S. healthcare sector is quite a complex interplay between players, providers, patients, and, of course, more recently, politics, but it's about $4.5 trillion in size, and about 90% of that is consumed by chronic disease. Well, if you look at this diabetes and diabetic foot ulcers, about two-thirds of the payments for diabetes is government-funded healthcare. And it's broken really into three groups. On the left, the Federal Supply Schedule is the Veterans Administration, and we have been in that sector the longest.
They pay on provision of service, so as Jayesh says, upfront, but they also, by law, have the best pricing, so they are the lowest price. What we've been focused on is expanding, building on our business and continuing to grow the veterans business, but also building on our business into managed Medicaid, which is about 90 million lives and predominantly low-income or disabled people, and was significantly expanded during the Affordable Care Act or Obamacare to cover people that were uninsured. Currently, we're not servicing Medicare, and most players in the U.S. space, in any, not just wound care, but any healthcare field, usually focus purely on Medicare as their starter to start marketing, and we're working on Medicare, and it will open up 65 million covered lives of the over 65, and this is controlled by CMS, Centers for Medicare and Medicaid Services.
As we mentioned earlier, they have started their review. At some point in the future, we will bring that along as well. We've been able to expand and diversify between now and when we began into more private care sectors, including workers' comp, skilled nursing facilities. The important thing is, as we grow in all of these sectors prior to Medicare, we're forming relationships with subsidiaries of the biggest insurance companies, as you can see illustrated below, which will put us in good stead when Medicare comes along. If we look at our strategy then for commercialization, it was built around different phases. Our phase one was completed in 2022, and that was where we were focused on the Veterans Administration and also on New York State Medicaid. We built our business along those lines.
Phase two, which has been where we are at the moment, and we've been seeing great progress, was to take the success we had in New York State Medicaid and start opening up other state Medicaids, where the first step is to get the ability to do business with provider IDs. The second step then is to turn that and translate that and to grow the business by putting feet on the ground and getting prescribers to order the therapy. That process can take 12 - 18 months in total based on the state and how quickly it works. That's where we're focused at the moment, whilst we diversify also into other skilled nursing, long-term care, and workers' comp type sectors.
Prior to phase three coming into play, which is when we have national coverage and full CMS Medicare coverage, which will obviously accelerate everything else we're doing. So we're unique in the fact that we're able to grow a business as a compound at over 30% growth without having traditional coverage in play in Medicare. So we believe once that comes into play, it will just be an accelerant to everything that we're doing. So if we look at how we've delivered on this, as Jayesh has already outlined in 2023, 70% of our business was in the Veterans Administration. We had four Medicaid states that we were up and working with: New York, Arizona, New Jersey, and Virginia. And we then continued to invest across 2024. So now we've diversified that mix. There were only 60% in the VA, even though the VA continued to grow.
We're now actively working in nine Medicaid states and building in more of them. We're able to start distribution on our NEXA product line and open up and start selling into other commercial sectors, all while we're waiting on the CMS and what they refer to as the DME MACs, which are the contractors they work with, to complete their coverage determination and coverage in the traditional Medicare sector, so we were able to achieve this level of business prior to additional coverage coming into play. We've also been able to have targeted release and progress and growth into certain key international sectors, including the United Kingdom, and just recently, we were awarded addition to the Advanced Wound Care Framework, commencing in September of this year, and had a very strong health economic paper published showing positive quality-adjusted life years here in the U.K.
But also, we're focused on working on getting traction in Germany and in the Gulf region and the Middle East, where we're doing good growth and good contract progress within Saudi Arabia, particularly. So our strategy moving forward is to continue to do what we're doing, which I think we'll see our business migrating again, even though we will grow in the VA, so that our VA will be less than 50% moving forward of the total business. We do believe sometime in the future, although it's hard for us to predict when, there will be Medicare coverage through CMS.
We expect that we will continue to be able to open two to three Medicaid states per annum and that we will continue to penetrate deeper into the states we've opened and into the other commercial sectors, all while we expand international sales in the markets I just outlined, but also into further markets, and we've purposely taken a staged approach to this based on our limited resources as a company. Now, talking about value-based care, this is something that is critical to payers, whether it be insurers or the government, particularly in the U.S., and value-based care is providing high-quality, patient-centered care that improves health outcomes while lowering overall health costs. It's something a lot of people talk about, but it's very hard for people to deliver.
Even with the more recent political changes and the new Health and Human Services Secretary and CMS Administrator in the U.S., you can see that there's a clear focus on cost reduction, reduction of waste, and looking at ways to pay for outcomes rather than pay for services, so we, as a company, have been building on and continue to invest heavily in a differentiating platform called Eyes on the Wound, and this is our way of being able to deliver and articulate value-based care to payers. What it does, it allows us to integrate our proven therapy, which is our foundation that reduces these wounds' recurrence, by engaging with our unique ability because we are in the home with the patient.
So engaging with the patient and then being able to feed that back and provide that engagement both to providers, but also to payers to demonstrate delivery of the outcomes that we say we can do. Now, being in the home is key. We are the only wound care company focused on being in the patient's home. And as I said, we're not just a manufacturer of wound care products. We are a provider that delivers those products to the patient. When we're in the patient's home, we create relationships, which allows us, with our therapy support teams, to build trust and engagement. And engagement to the therapy is critical to have the patients adhere to using the treatment adequately, but also to be motivated to move forward with their care.
And what we're able to do is take this knowledge and this background to provide actionable insights to improve these outcomes of patients and reduce cost. However, what we need to be able to do is to scale this as the company builds, as we expand. And if you start in the top left-hand corner here, our therapy support team allows us then to have that engagement. But what we've already done is incorporated the ability to use artificial intelligence to transcribe the calls and discussions we have with patients as we're doing the home assessments to keep not just automated records, but to better fine-tune our engagement. We've also added in the last year remote therapy monitoring that allows us, with applications, to see if the device is being used to make sure the patient is utilizing it.
The standard protocol for our therapy is 90 minutes, five days a week. If they're using it somewhere close to the recommended protocol, then it's sufficient and you're going to have outcomes. If they're not, we can engage sooner rather than wait for there not to be progress to engage with their care and with prescribers. We're now moving into the yellow box here, and AIDA is our chatbot. Artificial intelligence data assistant, it's allowing us now to take not just the compliance data, but also the ability that we have to take measurements of the wounds and pictures of the wounds and provide this in reports back to providers and payers and organize our engagement with the patient so that we are learning how better to engage to deliver the outcomes that we say we can do.
Last but not least is our ability and our evolved data repositories. We have developed a HIPAA-compliant Azure database, and as a provider, we have access to the health information exchange, which is the patient records, electronic record in the U.S. We're able not only to provide data to it, but to pull data from it to be able to submit requirements that the payers may need, but also allows us to do a lot of analysis and to demonstrate with our analytics the benefit that we're bringing in a value-based care model.
So this evolution into our Eyes on the Wound is the way that we will not only scale the business, but we will automate it and improve the business moving forward, but also opens up the world of possibilities because we're in the patient's home and these patients are suffering from chronic disease and no patient has just one chronic disease. On average, they have three to four different things going on. They might be obese, they may have diabetes, they may have obstructive sleep apnea, they may have COPD. So the more holistically we can help manage or help the payers and providers manage these patients, the more value we're bringing to Value-Based Care. So we see there's a world of opportunity in the future with this unique differentiation. So to conclude, we are a high-growth, profitable medical technology business.
We are clearly the market leader in the topical oxygen space, projected by SmartTRAK to be around 80% of the market, and we are differentiating ourselves by delivering sustainable outcomes in the hard-to-heal wounds, the most difficult wounds, predominantly DFUs and VLUs, but also other types of wounds like pressure ulcers. Our product is differentiated again by the extensive peer-reviewed evidence that shows long-term outcomes that provide significant clinical, but also cost savings to payers, which is really unique in the space. We're able, because we're uniquely in the patient's home, to deliver these outcomes and provide value-based care with our proprietary Eyes on the Wound platform, and as we continue to deliver and expand with our commercial rollout, we believe all our foundations are in place for continued and increasingly more profitable growth as we accelerate into the higher margin market sectors as we are seeing occur.
Lastly, but not least, we are an experienced founder-led management team and have a seasoned board, so we have and continue to build a team with the background needed to take this to the next level. So I think I will end there, and I think we will go to the questions and answers, if that's okay with you, Jayesh.
Sure. Thanks, Mike.
So I'm seeing some questions come up. First question is, why is AOTI a compelling investment case? And I guess from a finance perspective, my answer on that is that we're a company that's listed on AIM, is growing at over 30% per annum, and is delivering strong adjusted EBITDA growth as well. And I think that very few companies can say that. And our guidance this year is going to build upon that.
I think on that basis, it's a really good investment for people to make. I think additional to that is we are able to do this when we don't yet have traditional coverage in the U.S., where most players in the space would not even be marketing without. So the fact we're able to give this level of traction, I think there's enormous potential that once that broader coverage into the Medicare population occurs, and we can't predict exactly when it's in the future. But when it does, we do believe there's the opportunity for that growth to accelerate even more.
Thanks, Mike. Other question I've had is, what is your current market share in the advanced wound care market beyond the topical oxygen therapy segment, and how do you plan to expand? So I think that's a question around just market and expansion.
Yeah. I mean, if you think of it, we are doing close to $60 million in a market sector that advanced wound care is estimated to be about $15 billion. We are obviously still a small player in that sector, but clearly the leader, and we are creating the topical oxygen sector. I think the opportunity to expand. There have been predicates with devices in wound care. One that springs to mind is negative pressure wound therapy, which is about close to a $2.5-$3 billion part of that advanced wound care sector, which, again, started off in the tens and hundreds of million dollars and grew very quickly to over $2 billion and has maintained there for the last 10 to 15 years. I think that's a predicate of the opportunity in front of us.
I think we have a much more impactful product than that was in its day, and as long as we can continue to execute, obviously, based on those benefits.
Thanks, Mike. Got one question on working capital. How will you deal with the working capital requirement of the business given the uptick in receivables? How is the current balance sheet, and will more equity be needed over time? How do you get to new shareholders in the story given the poor performance of the equity post-IPO?
There's quite a lot to unpack there, but if I can start with the working capital question. One of the things that we had said at the IPO was to pay down the loan that we have. So we had about a $12 million loan at the beginning of 2024.
Our intention at IPO was to pay all of that down in the event we pay down around $4 million of that loan. We still have $8 million of that loan outstanding. Going forward, we're constantly looking at our working capital requirements, and we didn't pay the loan down fully because of the uncertainties in the market and obviously the receivables balance. We keep debt financing under review to help any sort of fluctuations in our working capital needs. I think relative to the share price, I think we've suffered during the lockup period in our initial year with quite a small float. Obviously, part of what we will be doing over time, obviously, is expanding that float, which we believe will allow that to right itself more appropriately.
Thank you. A technical question. Can you please elaborate on the reasons for the large increase in SBP, which I think is share-based payment, in 2024 versus 2023?
So the share-based payment charge increased from $1.5 million in 2023 to $5.1 million in 2024. It's important to say that this is a non-cash charge. And the reason why it was so high in 2024 is because of the IPO. This was the crystallization of restricted stock units and share options for employees as a result of the IPO. And so it was a one-off event and crystallized as a result of that. And those are now fully vested, and so there will be no more charges in relation to those share-based payments. Another question we've had is, when do you think Medicare access might be granted if you're optimistic? And related to that, can you get access to California?
I mean, all we can say is that CMS, Centers for Medicare and Medicaid Services, have commenced a review. It commenced in December of 2024. They are in that process, and it will be forthcoming. If any prediction we would do would be wrong, so we're not going to guess at what it would be, but it would definitely be in the coming years, but it's impossible. They're not bound by any statutory timeline to complete it. So we would have to leave that there. What was the other question? Can you get access to California? Yes. So regards to Medicaid, we're based in California. So obviously, it's very dear to our heart. We have submitted our application for California Medicaid, which is called PAVE, or Medi-Cal, as they call it. And just to give you an idea, California has 15 million people on Medicaid.
We do expect that to be forthcoming. But again, they can take as long as they need to complete that review. We would hope that would happen this year, but we can't predict it.
Thanks, Mike. Another question we've had is, does the patient wear the product for 24 hours a day? I think it's about how the patient uses the product.
Yes. No. Unlike other wound care products and other topical oxygen devices, ours is unique in both its multi-modality, but the fact it's intermittent. Other topical oxygen devices are referred to as continuous, and you wear them all the time. Ours, you wear our standard protocol is you use it for 90 minutes, so an hour and a half, and we recommend five days a week.
Now, there's no contraindications for patients to use it more often, but we wanted to validate in our studies a minimum protocol would be effective. So the nice thing about this is patients sit at home for 90 minutes. And as you can see in the pictures of the product, they just use the therapy. Usually, while they're watching television, having a cup of tea, and then they're done, they take it off. They do it over their existing dressing, so they don't have to undress the wound because most dressings are completely what they call gas permeable, which will allow the oxygen to diffuse through. So it makes it very easy for them to do, and it doesn't tie them to the device 24 hours a day.
Thanks, Mike. What is the extent of the evidence to support this in VLU? Is this less certain than DFU?
The extent of the evidence is actually quite good, but not quite to the level that we have in DFUs. In the real world, in the U.S., about 30% of the patients we treat are VLUs, and we have equally as significant outcomes. We have a strong controlled study that was done by vascular surgeons in Ireland a few years back that showed very similar healing efficacy at 12 weeks as we saw in DFUs, and these are for refractory venous ulcers of a minimum two-year duration, so really difficult venous ulcers, compared to standard compression dressing, which is the only effective alternate treatment, and more importantly, what it showed is they followed these patients over 36 months, so three years, and for ulcers that have a 75% recurrence year on year, they were only seeing, I think, a 6.25% reoccurrence.
So that would be an eightfold reduction over three years, so really, equally as substantial. And what we are doing with the randomized trial that I mentioned is validating those outcomes with a study of equal scientific rigor.
Thank you. We've got a question about growth. Is the access to new states needed to achieve the growth guidance? And then secondly, how does the situation in the U.S. influence the CMS review?
So obviously, accessing and building on new states allows us to have more places where we can go and market the product, or equally, if we can execute on implementing the access we already have more effectively in both the VA and existing states, and our strategy, obviously, is to do both.
We believe we will open two to three states every year at a minimum, but we also believe we have the opportunity to drive that sort of growth trajectory irrespective if we can continue with the penetration into the states and the markets we're already in. What was the second question?
How does the situation in the U.S. influence the CMS review?
Okay. By the situation, I presume you mean the political situation. I think what's really interesting. CMS obviously are the ones that are the decision makers on broader coverage of Medicare. I think what's very clear is the new administration are very much focused on reducing cost, taking cost out of chronic care. They're also very committed, as you can see from the slides earlier, to Value-Based Care.
I think our therapy and the outcomes we deliver that are longer term will resonate equally, if not more, with the current administration in the market. That's not to say there's not some upheaval as they go through their process. And certainly, when there's change, there's always uncertainty. I do believe it's all supportive of a positive outcome. Whether it will speed up or delay the process, it's hard to tell at this point. Brilliant.
Thank you, Mike. And then a question on the UK. To launch in the UK, do you have to wait for NICE to apply?
No, we've already actually started marketing in the UK. We are working currently with a number of hospital trusts who can independently use the therapy and are funding it on a local level.
What happened more recently is we were added or awarded addition to the Advanced Wound Care Framework for 2025, which comes into effect September 1st, which means we will be more formally in the NHS Supply Chain system with pricing established so that for trusts and providers, including those in the community, can order the therapy and the pricing exists. We certainly would like to have NICE pick this up and do a technology assessment and review and publish, hopefully, a recommendation because obviously that helps to drive adoption of the therapy. And we have submitted our NHS innovation pathways for that. But at this point, the way NICE works is you can't petition them directly. They have to decide to pick it up. So we're waiting to see, hopefully, that NICE will pick up in the future.
So no, we don't have to wait for NICE, but obviously, having a positive NICE recommendation certainly would help accelerate adoption.
Okay. Brilliant. Thanks, Mike. And then another question, looks like it's the last one, is what are you expecting to achieve in the next 12 months?
So I think as we outlined, I mean, from a business point of view, we expect, even with the uncertainties, to be able to drive the growth between 27% and 30% and produce EBITDA of between 14% and 16%.
However, we expect to keep implementing in all these channels and growing them in parallel whilst we do a better job of not just articulating, but building out all of the components needed for the Value-Based Care Eyes on the Wound model that we have, whilst we continue then to open up more sectors and more sales channels to diversify the company from being reliant on predominantly the VA and the current Medicaid sectors. We expect all those things to move forward. Obviously, we are cautious in our guidance based on the various turbulence that's in the general marketplace, but we will continue to implement along that strategy.
Thanks, Mike. I think that's all the questions we've had so far. So if there's anyone else that wants to ask a question, please do submit it.
Mike, Jayesh, I might just jump in and thank you for answering those questions from investors. Of course, the company can review all the questions submitted today, and we will publish the responses on the Investor Meet Company platform. But just before redirecting investors to provide you with their feedback, which I know is particularly important to you both, Mike, could I just ask you for a few closing comments?
Thank you. I think we are an exciting company that have been growing a compound over 30% revenue for the last five or six years. We're producing positive EBITDA that we believe will improve even further over time as we execute in higher-paying segments, and we're just at the beginning of our growth trajectory as a company.
So I think this is an opportunity for investors doing something good in society by reducing the clinical quality of life and cost burden that chronic wounds impose on society as a whole.
That's great. Mike, Jayesh, I'd like to thank you for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback and all of the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team for AOTI, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you.