This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

21 July 2025

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

Half Year Trading and FY 2025 Guidance Update

Strong trading performance in Q1 2025 - c.26% growth

Q2 2025 saw a more significant impact than expected from US government initiatives

Growth strategy remains unchanged; TWO₂^®'s proven clinical efficacy and cost-saving potential aligns with US government focus on health economics, which is expected to drive medium-term US growth opportunity

Breaking news today in a separate announcement; Medicaid Provider ID received in California, providing access to the largest Medicaid state by enrollment numbers

AOTI, INC. (AIM: AOTI), a medical technology group focused on the durable healing of wounds and the prevention of amputations, announces its trading update for the six months ended 30 June 2025 ("the Period") as well as an update to FY 2025 guidance.

The Company expects to report revenue for the Period of not less than $31 million (H1 2024: $26.3 million), representing growth of not less than 18% (H1 2024: 26.4%).

In the first three months of the Period the Group recorded revenue growth of approximately 26%. Revenue growth in the six-month period ended 31 March 2025 was approximately 37%, reflecting the strong momentum within the business post the IPO. Trading in Q2 2025 has been more volatile and weaker than anticipated, in common with our peers with significant exposure to the US healthcare sector. This is due to the impact of US government tax and spending initiatives that continues to cause greater disruption across payers than we had anticipated at the time of publishing our final results in late April 2025.

The Company now expects revenue growth for FY 2025 to be in the mid-teens and adjusted EBITDA margin to be low double digit, reflecting our current assessment of the likely impact of these headwinds. At present, the Company expects these immediate headwinds to be transitional in nature and we remain focused on executing our growth strategy and achieving greater growth in the medium term.

This update to guidance reflects the following segment specific factors:

Veterans Administration (VA) (approximately 54% of total revenues in H1 2025): Revenue growth was weaker than anticipated in the second quarter due to greater than expected disruption from the impact of VA head count reduction and efficiency initiatives. While we now expect the disruption to extend into H2 2025, we anticipate this to abate as the year progresses as it has been reported that most of these initiatives have now been implemented¹.

Medicaid and commercial channels (approximately 46% of total revenues in H1 2025): Medicaid segment revenue growth for the Period remained robust and is expected to be between 50%-55% (H1 2024: 83.8%). Revenue growth in H1 2025 would have been higher if not for the continuing disruption with billing and payment in one state, Arizona, which has significantly impacted our ability to project the level of revenue arising from this state (see "Receivables" below).

During the Period the Company added two new Medicaid states, and very recently received its provider ID for California, as disclosed today in a separate announcement. This progress is in line with Company guidance of adding two to three states per year.

In H2 2025 we now expect to see business disruption as a direct and indirect result of the US government cost containment initiatives within the healthcare provisions of the recently passed "One Big Beautiful Bill Act". Given the significant implications of this Act across the healthcare industry, and in particular for Medicare and Medicaid, it is likely to impact progress in securing informal coverage in new expansion states and patient populations prior to receipt of more definitive coverage determinations and has the potential to cause disruption into the middle of 2026. However, the Board believes that the implementation of this Act, that focuses largely on cost reductions and value based care, should ultimately provide AOTI with a more favorable health economic framework to drive accelerated growth in the medium and long term, due to the Company's products' proven durable clinical outcomes and cost savings.

In response to these external challenges, the Company has implemented a number of organisational and operational changes across its commercial teams, as well as making targeted cost savings to ensure it is better positioned, more agile, and able to adapt to a landscape that is changing at an unprecedented rate.

Receivables

Against a backdrop of major upheavals in the Arizona healthcare system,² the Company remains actively engaged with Medicaid insurers in the state and with the State Medicaid agency, and continues to make progress in resolving the previously flagged payment issues. Payment of legitimate claims, although making progress, have been taking significantly longer than previously experienced. The Company is monitoring the situation closely.

Cash and Debt

The Company has made an amendment to its existing loan agreement with SWK Funding LLC, providing an additional $11.0m loan with a reduced overall interest rate and longer amortization terms. Other terms and covenants are consistent with those previously in place (see details below). The Board believes that this, together with cash on hand, provides ample headroom to accessible capital to enable the Company to continue to execute on its growth strategy.

The Company expects to announce its interim results for the six months ended 30 June 2025 in September 2025.

Outlook

The Board believes that AOTI is uniquely positioned to deliver effective value-based care through its innovative TWO₂^® therapy. While the uncertainties and disruption caused by US government efficiency initiatives are greater than was foreseen at the time of our earlier 2025 guidance announced in late April, the Board is encouraged by the US Administration's indication that these initiatives are transitional in nature. Furthermore, the compelling cost saving benefits of TWO₂^® therapy align with the US Administration's focus to deliver value-based care.³ As a result, the Board is confident that the Company is well-placed to deliver on its strategic priorities and growth drivers in the medium term.

Dr. Mike Griffiths, Chief Executive Officer & President of AOTI, Inc., said:

"Despite current headwinds caused by the ongoing transformation of the US healthcare landscape, which has been faster and more ambitious than previously anticipated, I am confident in our medium and longer-term outlook as we continue to establish a new market segment for Topical Oxygen. In particular, the recent positive G-BA recommendation in Germany for TWO₂^® not only strengthens our position across Europe but also serves as a valuable benchmark for other reimbursement bodies, including the CMS in the US. Additionally, receiving our California Medicaid Provider ID is a significant milestone  in our growth strategy and further validation of the value proposition of TWO₂^®. We are also continuing to move into new and higher-value market channels to diversify our revenue streams. We remain fully committed to our strategy of expanding market access, building awareness and adoption of our innovative TWO₂^® therapy, and driving market penetration to ensure sustainable, profitable growth."

1. https://www.nytimes.com/2025/07/07/us/politics/veterans-affairs-layoffs-jobs.html#

2. https://azmirror.com/briefs/two-top-arizona-health-officials-resign-amid-unprecedented-politicization-of-process/

3. https://www.cms.gov/newsroom/press-releases/cms-proposes-physician-payment-rule-significantly-cut-spending-waste-enhance-quality-measures-and

ENDS

The person responsible for making this announcement on behalf of the Group is Jayesh Pankhania (Chief Financial Officer).

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 recommendation from the Federal Joint Committee of Gemeinsamer Bundesausschuss (G-BA) in Germany. Also see www.aotinc.net

Key terms for the revised SWK Funding LLC loan

The loan has been increased by $11.0 million to a facility of $19.5 million at an interest cost of SOFR plus 7.75% (reduced from SOFR plus 9.50%), with maturity extended to February 2029 and an interest only period until February 2027.

The SOFR floor has reduced from 3.50% to 3.15%.

Covenants are tested calendar quarterly 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 $61.6 million as at 30 June 2025 increasing quarterly to $67.2 million as at 31 December 2025 and reaching $75.0 million from 31 December 2026 onwards; and (3) Minimum EBITDA on a last twelve month basis of $5.5 million as at 30 June 2025 increasing quarterly to $6,000,000 as at 31 December 2025 and reaching $6.8 million from 31 December 2026 onwards.