Welcome and good morning. Good morning, ladies and gentlemen. Thank you for joining us today, and welcome to the MedAdvisor Solutions Annual General Meeting for the 2025 financial year. I note that this meeting is being held as a virtual meeting only. I ask that everybody please note down the telephone number, which will be on the screen shortly. Excuse me. If you experience any technical difficulties during the meeting, please dial that number for assistance. I advise that in accordance with the company's constitution, a quorum is present, and accordingly, I declare the meeting open. I'm Kate Hill, and as Interim Chair of the Board of Directors, I will chair today's meeting. I would like to introduce my fellow directors on the call today: our CEO, our Company Secretary, and other attendees.
We have John Ciccio, our Managing Director and CEO, and you'll hear from him a little bit later on, Non-Executive Director Luke Merrow, Executive Director Sean Slattery. Sean is also our CFO, and we have Gillian Nairn, who's our Company Secretary. Also present today is Mathavan Parameswaran from RSM Australia, our auditors. The format for today's meeting will be as follows. Firstly, I'll present my Chair address. We'll then attend to the formal business of the meeting. The meeting will be closed once the formal business is concluded. Following the close of the meeting, John will present a business update. I'll now proceed with the Chair's address. Good morning again. I'm Kate Hill, and I'm pleased to address you today as Interim Chair of MedAdvisor Limited at our 2025 Annual General Meeting.
On behalf of the board, I would like to extend a warm welcome to our shareholders and to thank you for your continued support during what has been a year of considerable challenge and transformation for the company. Before outlining the key strategic actions taken during the year, I want to briefly address our financial results and the factors that have shaped them. Although the company reported a substantial statutory loss, it is important to note that the majority of this relates to a non-cash impairment of intangible assets in our U.S. business. This was a deliberate and responsible step to ensure the balance sheet accurately reflects prevailing market dynamics. The operational performance itself was impacted by factors affecting the wider healthcare sector, particularly reduced promotional activity by pharmaceutical manufacturers and also subdued demand for seasonal vaccinations.
Despite these headline numbers, it is important to recognize that the past year has been one of decisive action aimed at positioning the company for a more focused and sustainable future. Early in the financial year, we initiated a formal strategic options review to evaluate options for maximizing shareholder value. This process culminated in the sale of our Australian and New Zealand operations to Jonas Software Australia Pty Ltd, with completion announced early July 2025. The headline sales price of AUD 35 million, with a potential uncapped earnout of around AUD 7.4 million payable over three years, implies a 1.7x FY 2025 revenue multiple and demonstrates the inherent value of the ANZ business and the strength of the MedAdvisor platform developed over many years. The transaction also enabled the company to repay all debt obligations, leaving MedAdvisor debt-free and in a stronger financial position from which to consider future strategic options.
The financial year saw a difficult operating environment for our U.S. business. Revenue from the U.S. operations declined as pharmaceutical manufacturers and pharmacy chains reduced marketing and engagement budgets due to economic pressures, a delayed flu season, and lower than expected RSV and COVID vaccination rates. In addition, regulatory uncertainty and financial distress amongst major pharmacy groups resulted in a significantly reshaped competitive landscape. Against this backdrop, management acted early in the calendar year to preserve the financial position of the company, with a comprehensive cost reduction program implemented, achieving a 13% reduction in operating costs compared with the prior year. These measures served to align our cost base with expected revenue levels while maintaining a capability to respond quickly as the U.S. pharmaceutical and pharmacy sectors recover.
As John will outline in his presentation, we have in recent times gone further in this regard as the industry uncertainty continued during the year. Progress was also made on the U.S. platform redevelopment, with more than 70% of the work completed by year-end. Phase one of this project remains on track for completion in the second quarter of FY26, with migration of the pharmacy network expected to follow in the third quarter. I'd like to acknowledge the work of Rick Ratliff, our former CEO, who planned and executed this complete overhaul of our technology platform, which, once deployed, will set us apart from our competitors and add even more value for our pharmaceutical and pharmacy partners. During the year, the board was streamlined to reflect the company's downsized operating structure.
As part of this consolidation, the board reduced from nine directors to four, including the appointment of our CFO, Sean Slattery, as an Executive Director. Earlier this month, Rick Ratliff stepped down as Managing Director and CEO, and we were pleased to appoint John Ciccio as his successor. John brings more than 12 years of experience within our U.S. business and a deep understanding of its operations. I'd like to sincerely thank Rick and our former directors for their contributions over the last few years and warmly welcome John back to the company. As part of the strategic options review, the company received several non-binding indicative offers for the U.S. business. However, none progressed to a stage that would warrant consideration by shareholders.
Accordingly, in September 2025, the board resolved that in order to maximize shareholder value, it will prioritize the comprehensive transformation of the U.S. operations, modernizing systems, strengthening commercial performance, and positioning the business for sustainable growth ahead of any potential sale. The board does, however, retain the option to revisit a trade sale when the business is on a stronger footing and market conditions are more favorable. Looking ahead, the board is confident that the decisive actions taken over the past year, including the sale of the ANZ operations, the significant cost reductions, and the continued progress on the U.S. platform transformation, have created a more focused and financially resilient organization.
As John will outline shortly, we are optimistic that the fundamentals of our business are sound and that our strategy to broaden the health program pipeline and advance the rollout of our digital engagement platform will resonate strongly with our program partners. Before I close, I would like to acknowledge and thank our former CEO, Rick Ratliff, and his executive team for their professionalism and commitment during a very difficult year. I also extend my sincere thanks to our staff across all regions whose hard work and adaptability have sustained MedAdvisor through this period of transformation. Finally, I would like to thank my fellow directors and our shareholders for their continued confidence and support. Thank you. I will now proceed with the formal aspects of the meeting.
The purpose of this meeting is set out in the notice of meeting, which was made available to all shareholders on the 8th of October 2025. Unless anyone has any objections, I will take the notice as read. I'll briefly explain our voting and question procedures. Shareholders can vote online using the online voting platform link, which is found in the notice of meeting. The link is also shown on the screen. Once you have registered and logged into the platform, you can commence voting when I open the polls by using the vote icon shown on your screen. Please ensure you see a tick against the item you are voting, as that indicates that your vote has been received. You may change your vote at any time until the polls are closed by selecting the icon on your screen. Change your vote.
I will just say that if you've already lodged your vote by proxy, then please could you not vote again unless you wish to change your vote. Thank you. If you're a shareholder, you can submit a question by using the Q&A function in Zoom. When addressed, your question will be read out loud to the meeting by the company secretary. Please include your registered holder name with your question. We will address questions at the appropriate time in the meeting. If we receive a number of questions on a similar topic, we may choose to amalgamate them, and we may not attribute a question to the person who asked it. There are six items of business today, as detailed on the slide.
As we move through the items of business for voting items, we will present on individual slides the proposed resolution and the votes received prior to the AGM on the resolution. The specific voting preferences indicated by proxies who had either directed their voting preferences or who had left their voting preferences open to be cast by the nominated representative or the chair are available for inspection. Where a proxy vote has been given to the chair with instructions to vote in favor of a resolution in accordance with the directions on the proxy form, I intend to vote in favor. Any undirected proxies will also be voted in favor of a resolution. Voting on all resolutions at today's meeting will be by way of a poll.
The company's share registry, Computershare, will process the poll votes at the end of the meeting, and the results will be announced to the ASX once they're available. The polls are now open, and the results of the valid proxies received are shown on the screen. The results for the individual resolutions will also be shown as we consider each resolution. The first item is to receive and consider the financial statements for the financial year ended 30 June 2025, consisting of the directors' report, the financial report, the directors' declaration, and the auditor's report. It is not a requirement that shareholders vote in relation to the accounts. However, we are pleased to answer any questions relating to them and any other matters you would like us to raise at this moment.
As I mentioned earlier, we have Mathavan from RSM with us here today to answer any questions on the conduct of the audit. Are there any questions or comments in relation to the reports under consideration?
Yeah, there are two questions of a general nature from Stephen Mayne. First question is, will you undertake to make sure a full copy of the AGM webcast is published? I've been asked this already . Will you undertake to make sure a full copy of the AGM webcast is published on your website for the benefit of the thousands of shareholders unable to tune in live to a virtual AGM on Zoom at 10:00 A.M. on a workday? Also, please run a hybrid AGM next year, which is better for shareholder access and board accountability.
Thank you, Stephen.
I think it is our normal practice to post the video of the AGM. We're certainly recording it, and we have held hybrid AGMs in the past. This year, we chose for cost purposes to hold a purely virtual one, but we'll take your comment on consideration for next year. Thank you. Any other questions?
There's a second question from Stephen Mayne. Stephen says, best practice is to disclose the proxy position early to the ASX along with the formal addresses, which you haven't done today. In light of the multiple resolutions which were defeated at the AGM earlier this year, please inform the meeting in a timely manner if there has been any material protest votes against any of today's resolutions. For instance, have we received a remuneration strike, and has the Interim Chair, Kate Hill, been re-elected based on the proxy votes?
Thank you. Thank you again, Stephen.
We didn't actually release the proxy results to the ASX ahead of the meeting. I understand that's a practice adopted at the bigger end of town, and we will take your comment on consideration. We have already shown the votes, the proxy votes received on a previous slide, and perhaps we could flip back to that slide just to make sure people could see it. I think that perhaps answers your questions, Stephen. Any more questions, Gillian?
There are no further questions, Chair.
Thank you. I'll move now to the resolutions. The first item requiring a vote is the adoption of the remuneration report forming part of the director's report for the financial year ended 30 June 2025.
The Corporations Act requires that a resolution be put to members to adopt the remuneration report as disclosed in the director's report section of the 2025 annual financial report. In accordance with the legislation, the vote on the resolution is advisory only and does not bind the directors of the company. However, the board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the company. I now refer shareholders to the screen displaying the resolution and the valid proxy results. As Chair, I will now formally move that Resolution 1 at the remuneration report be put to the meeting in the form set out in the notice of meeting and call a poll on this resolution to be held at the end of the meeting. Do any shareholders have any questions or comments?
There are no questions, Chair.
Thank you. Please vote on Resolution 1. The second resolution seeks the approval of shareholders for the election of Sean Slattery as a director of the company. I now refer shareholders to the screen displaying the resolution in full and the valid proxy results. I now formally move the motion that resolution two be put to the meeting in the form set out in the notice of meeting, calling a poll on this resolution to be held at the end of the meeting. Do any shareholders have any questions or comments?
Chair, one of the shareholders has asked, could you please make the slides bigger? They're hard to see.
Oh. Gorka, can you manage that?
Yep, on it.
One option perhaps is not to have the videos and just the slides, but I'll leave that to you.
This should be better.
If anyone is still having issues, please let us know, and we will remove the videos. Thank you. Thank you.
Thanks, Gorka. Any more questions?
There are no further questions, Chair.
Thank you. I now put Resolution 2 to the vote. The third resolution seeks the approval of shareholders for my own re-election, so I will hand the chair to Luke Merrow for this item.
Thank you, Kate. I now refer the shareholders to the screen displaying the resolution in full and the valid proxy results. I formally move the motion that resolution three be put to the meeting in the form set out in the notice of meeting, calling a poll on the resolution to be held at the end of the meeting. Do any shareholders have any questions or comments?
There are no questions, Chair.
Given that there are no further questions, I will hand the Chair back to Kate for the remainder of the meeting.
Thank you, Luke. We'll now move on to Resolution 4. The next resolution seeks the approval of shareholders to change the company's name to Adheris Health Limited. I now refer shareholders to the screen displaying the resolution in full and the valid proxy results. I formally move the motion that resolution four be put to the meeting in the form set out in the notice of meeting, calling a poll on this resolution to be held at the end of the meeting. Do any shareholders have any questions or comments?
There are no questions, Chair.
Thank you. I'll put the resolution to the meeting and move to Resolution five.
The next resolution seeks the approval of shareholders to amend the constitution to reflect the company's name change to Adheris Health Limited. I now refer shareholders to the screen displaying the resolution in full and the valid proxy results. I formally move the motion that resolution five be put to the meeting in the form set out in the notice of meeting, calling a poll on this resolution to be held at the end of the meeting. Do any shareholders have any questions or comments?
There are no questions, Chair.
Thank you. That brings to an end the resolutions required to be voted on at this meeting. As advised, all resolutions for consideration at today's meeting will now be decided upon by a poll of shareholder votes.
I will ask Maria, I cannot pronounce her name, sorry, Maria, from our share registry, Computershare, to act as returning officer. I ask you all to lodge your final votes, please. I assume that voting has now all taken place. Shareholders are entitled to ask questions or make comments on the management of the company. Do any shareholders wish to avail themselves of this opportunity?
There are no questions, Chair.
Thank you. Ladies and gentlemen, that concludes the formal items of business for today's meeting. As mentioned earlier, the results of the AGM will be announced to the ASX later today and placed on the website. I now declare the meeting, the formal meeting closed, and I will ask our CEO, John Ciccio, to provide a business update. Over to you, John.
Thank you, Kate, and good morning, everyone.
Before we get started, I'll just briefly acknowledge the important notice and disclaimer on the following slide. This presentation contains general information only, and the financial figures shared today are presented in AUD. The full disclaimer is included here for your reference. Next slide, please. Let's start with who we are and the position we hold in the market. First, I'll highlight our industry relationships because these continue to be among our greatest strengths. We work with all of the top 10 pharma companies and 17 of the top 20, with an average partnership of more than 15 years. On the pharmacy side, we partner with nine of the top 10 chains in the country, and those relationships average more than 20 years. These long-standing partnerships form the foundation of the business. At a high level, our role is straightforward.
We sit between pharma and pharmacy, delivering educational programs that improve the medication journey and support better patient outcomes. With more than 30 years of experience in this space, we're now innovating on that model with more advanced technology and analytical techniques while maintaining the same plug-and-play approach that our stakeholders rely on. Next slide, please. Next slide, George, please. I'll spend a minute here to walk through the financials. As Kate mentioned in her address, a variety of U.S. market dynamics negatively impacted our performance this year. Revenue came in at AUD 63 million, which was down 36% year over year. Gross profit was AUD 32.9 million, down about 38.5%. Gross margin was 52.3% compared with 54.4% a year ago. EBITDA for the year was a loss of AUD 10.7 million, down AUD 13.9 million year over year. Next slide, please.
I would like to summarize some key highlights for the year. As we have covered before, fiscal 2025 was impacted by U.S. market pressures, regulatory uncertainty, and budget tightening, which drove the decline in revenue and profit along with the non-cash impairment on U.S. intangibles. With respect to our capital position, we completed a full strategic options review and ultimately divested the ANZ business after year-end. We ended September with net cash of AUD 13 million, excluding approximately AUD 8 million held back as part of the terms of the divestiture. Operationally, the health program pipeline heading into fiscal 2026 remained solid across most major brands. Our Transformation 360 program is progressing well, on track and on budget, and we expect the U.S. platform deployment to be completed by the end of next month. We also continue to advance the cost outwork.
The T360 program was designed to deliver a 15% reduction in operating costs for the continuing business in fiscal 2026. Beyond that initial plan, I've been taking a deeper look at our OpEx position, and I anticipate that there will be additional opportunities to pursue as we move into the new calendar year. Next slide, please. This slide provides a closer look at the work completed through the strategic options review. As you know, we launched this process in late 2024 to evaluate a full range of options to unlock shareholder value and to address the valuation disconnect that we were seeing in the market. As part of this review process, we completed the divestment of the ANZ business after year end.
That sale generated AUD 35 million in initial proceeds, AUD 27 million upfront, and approximately AUD 8 million in a holdback that we expect to receive by the end of the calendar year, plus an uncapped earnout opportunity that we currently estimate at AUD 7.4 million. Importantly, the sale also allowed us to extinguish all outstanding debt and materially strengthen our balance sheet. On the U.S. side, we did receive interest from several third parties, but none of those discussions resulted in actionable offers. The board has now shifted its focus toward prioritizing the transformation of the continuing U.S. business. From a capital management standpoint, we closed last quarter with AUD 13 million in net cash, no debt, and the flexibility to support the transformation. The board is continuing to evaluate the best use of capital, and there are no immediate plans for capital return while we execute this strategy. Next slide, please.
Next slide, please, George. Thank you. As we look back on FY25, it's important to acknowledge the environment we faced during the year, but also to quickly pivot to how we're positioning ourselves in fiscal 2026. Broad market and revenue pressures, a slow start to the year, reduced margins due to an unfavorable product mix, and higher expenses during the platform transition all contributed to lower financial performance in FY25. Despite these challenges, however, several core strengths remain firmly in place. We entered fiscal 2026 with a strong and diversified pipeline of roughly $100 million U.S. dollars unweighted. Our long-standing partnerships across both pharma and pharmacy continue to anchor the business, and our national footprint with access to over 170 million patients and more than 25,000 pharmacies gives us unmatched reach.
Cost optimization initiatives are tracking well, and the platform migration is now nearing completion, enabling a significantly lower cost to serve. We're completing a smooth CEO transition with strong support from Rick. We will launch our next-generation patient engagement platform by the end of December, and we've strengthened our leadership team with the addition of two exceptional commercial executives with long and successful track records in the market. These leaders will be critical to driving accelerated pipeline conversion, and they've already begun to make progress in this area. We're also expanding our digital reach to capture greater brand market share and to improve program performance and renewal rates. We're progressing targeted AI partnerships that will enhance product differentiation and customer value. Next slide, please. As we look ahead, we are laser-focused on five key priorities for fiscal 2026 as we reposition the business and rebuild momentum.
The first is strengthening our operating model. We're targeting at least a 20% overall reduction in operating costs for the year, driven by more efficient delivery as the new U.S. platform goes live, as well as a realignment of our team structure to support the future state model. Second is diversifying and rebalancing the revenue mix. We need to better align with where pharma spends the most. More than 50% of U.S. spend is focused on specialty medications, while less than 20% of our revenue came from specialty brands last quarter. We also must aggressively promote our digital and THRiV solutions, which have declined as a percentage of revenue in recent periods. These products perform better, align more closely with pharma demand, and drive higher margins for our business. Third, expanding our digital footprint.
While we can access 25,000 pharmacies and more than 170 million patients, our digital reach is only a subset of that network right now. It is critical that we achieve maximum digital connectivity across our network in order to fully realize our potential. Fourth, sharpening our focus on capturing a greater share of direct-to-consumer and performance-based budgets. Traditional TV and other broad-based media spending is under pressure from the U.S. government, and brands are looking for measurable ROI-driven alternatives with scale. We are uniquely positioned to take advantage of that shift, with access to two-thirds of all Americans and the ability to communicate directly with patients without an opt-in. Finally, product innovation. Our new upgraded patient engagement platform, powered by targeted high-impact AI capabilities, will enable better personalization, enhanced predictive intelligence, and stronger support for specialty patients, helping them navigate complex drug regimens and a challenging payer environment.
These five priorities are the key levers we'll activate to rebuild momentum and expand our impact. Next slide, please. Thank you all for your time. Kate, back to you.
Thank you. There is an opportunity now to ask questions of John. Gillian, are there any questions?
There are no questions, Chair.
Thank you, everyone, for your attendance. As I mentioned before, the results of the poll will be available on the ASX once they've been finalized. Without further ado, I will close the meeting. Thank you.