Member Info for AquaeSulis01

Autumn begins next month

Bazzaman, the known placing money you quote was gross; net likely to have been £3.8M further strengthening the line that the launch did not have to be advanced. However, what it did very handily do is help disguise the magnitude of the Croda cash

Bazzaman, the cash figure despite an initial outlay for the Superdrug launch before June 25 does not support your argument that SA needed the Superdrug launch to be brought forward does it?

Ox123, thankyou for your input on the Singer figures; I believe we both also agree that SBTX using the Singer Adj EBITDA figure for 2025 of ( £0.3M ) as a comparator in the TU for their own predicted Adj EBITDA loss of circa (£0.3M) is meaningless and misleading

Indeed, very difficult to value the Company with the information publicly available.

The Singer note had 2024 Adj EBITDA as ( £2.7M ) and 2025 Forecast EBITDA as (£0.3M) whilst the SBTX TU has 2024 Adj EBITDA as ( £2.2M) and 2025 Adj EBITDA as (£0.3). Now the difference in the 2024 figures is likely due to the deferred acquisition cost of £500K being included in SBTX adj numbers whilst Singer excluded it so logically the same thing will have occurred for 2025 (where a second deferred acquisition consideration of £500k is recorded) meaning on a true like-for-like basis Singer would have Adj EBITDA as a £0.2M Gain against the SBTX (£0.3M) loss.

Also, if the Goalposts had not been moved by SBTX, then EBITDA rather than Adj EBITDA would be used. From the Investor Meets EOY Presentation using EBITDA (NOT ADJ), forecasts were as follows; Axis contribution (£1.8M) , Derma contribution + £0.7M, BTS for full year was £0.9 so pro rata eight months +£0.6M and there were +£0.6M synergy contributions with a total positive EBITDA of £0.1M, this would have translated to a positive adj EBITDA of approx £0.8M based on the Company's own expectations.

So if the published revenue of £4.5-£4.8M was inclusive of a substantial amount of pure cost free revenue from Croda in lieu of non-Croda revenue (as opposed to it being posted in deferred payment and hence by-passing the EBITDA calculation) wouldn't we have expected the adj EBITDA reported by SBTX to be near the +£0.8M figure?

None-the-less, cash is king and despite the potentially big outlay before the end of Jun to cover stocking for the Superdrug launch, cash beat Singer expectations by £0.7M so Croda contributions appear to be sizeable, we just don't know by how much the rest of the Business underperformed.

Toyin, agree totally this NDA has tied SA up in knots leading to misleading and incorrect statements in the RNS. For instance "SkinBioTherapeutics records its revenues under regulatory accounting rule FRS 102 and will continue to segment it geographically as before in its published accounts." when has SBTX ever reported their results on a geographic basis?

Yes it's all guess work for now but my line is;

Example: Zenakine™ Upfront Payment

Let’s say Croda pays SkinBioTherapeutics £500K upfront for Zenakine™ licensing, but the product hasn’t launched yet:

- Under IFRS 15, this sits as deferred income on the balance sheet.

- It’s not recognised as revenue, so it doesn’t flow into EBITDA.

Once the product launches and revenue is recognised:

- The deferred income is released to revenue.

- EBITDA increases accordingly, assuming no new matching costs.

So the revenue line of £4.5-£4.8 I believe is the extent of the missed combined revenues without Croda as the narrative implies "driven by a full year's trading by Dermatonics, eight months trading by Bio-Tech Solutions (BTS), as well as ongoing growth of organic sales of AxisBiotix. Revenues were slightly lower than market expectations due to timing of orders for Dermatonics and BTS, much of which occurred just after the year end."

Toyin, I suspect that at least £500k has been banked but I do not believe it is included in the Revenue figure. I also believe once Croda's Customers start selling end products with Zenakine in them then Singer's 2026 onwards royalty projections in their broker's note will prove to be a severe underestimate

So what are the payments that Skinbiotherapeutics have already received in advance of any products containing zenakine being sold by Croda's customers?

As of the latest disclosures, SkinBioTherapeutics has not itemised specific advance payments received from Croda tied directly to future royalties on Zenakine™-containing products. However, we can infer a few things from the available information:

💰 Known Financial Flows

• Upfront payments or milestone fees: While the original agreement with Croda likely included upfront or milestone-based payments (standard in licensing deals), these have not been broken out in recent RNS updates or trading statements.

• No royalty income yet: As of the 13 August 2025 trading update, there’s no mention of royalty income from Zenakine™. That suggests Croda’s customers have not yet begun selling Zenakine™-formulated products at scale—or if they have, the royalty flows haven’t yet hit SkinBioTherapeutics’ books.

📊 Cash Position Context

• The company reported £4.8m cash at 30 June 2025, up from £1.2m at year-end 2024, largely due to the £4.2m placing and WRAP Retail Offer to support the Superdrug AxisBiotix launch—not Croda-related royalties.

• The FY25 revenue uplift (to £4.5–£4.8m) was driven by Dermatonics, BTS, and AxisBiotix—not Zenakine™.

🧾 Accounting Treatment

If SkinBioTherapeutics had received non-refundable upfront payments from Croda, they would likely be recognised as deferred income under FRS 102 until the associated performance obligations (e.g. product sales by Croda’s customers) are met. But no such deferred income has been disclosed in relation to Zenakine™ yet.

As we are all guessing I'll give you the AI interpretation as to what may have occurred:

The skinbiotherapeutics RNS on 19th November 2024 stated "The terms are based on the original agreement with SkinBioTherapeutics being paid tiered royalties based on global sales revenues on any licensed products derived from the partnership." Does this refer to Global sales of the zenakine ingredient or Croda's customer sells of end products containing zenakine?

Great question, Mark—and one that cuts straight to the heart of how royalty mechanics are interpreted in biotech-commercialisation partnerships.

Based on the RNS from 19 November 2024, the phrase “tiered royalties based on global sales revenues on any licensed products derived from the partnership” refers to Croda’s customer sales of end products containing the Zenakine™ (SkinBiotix™) ingredient, not Croda’s internal sales of the ingredient itself.

Here’s why that interpretation holds:

🧩 Breakdown of the Language

• “Licensed products derived from the partnership”: This points to finished goods—formulated skincare or cosmetic products—developed by Croda’s customers using Zenakine™ as an active.

• “Global sales revenues”: This typically refers to the retail or wholesale revenues generated by those end products in the market, not intermediate ingredient sales between Croda and its B2B clients.

Strategic Implication

• This structure aligns with standard royalty models in ingredient licensing, where the licensor (SkinBioTherapeutics) earns a percentage of the final product’s sales, reflecting the value added by the active ingredient. It also incentivises Croda to drive adoption across its customer base, since higher downstream sales mean higher royalties.

🔍 Confidentiality Caveat

• The RNS also notes that formulation and financial expectations remain confidential, which suggests that the royalty tiers and exact revenue attribution mechanisms are not publicly disclosed. But the phrasing strongly implies that SkinBioTherapeutics benefits from the commercial success of products containing Zenakine™, rather than just Croda’s ingredient distribution.

The extra £700k based on your own assumption that at least £500k has been committed before the end of June on the Superdrug launch? That would be the Croda milestone payment sat in deferred income which was not disclosed as a separate figure in the TU but will need to be in the Audited Final Accounts

Besides the £250K Macq Bank Warrant money, if Dermatonics hasn't met performance conditions that would be another £250K earn out in deferred current liabilities that wont have been paid May 25 and of course If SkinBioTherapeutics had received non-refundable upfront payments from Croda, they would likely be recognised as deferred income under FRS 102 until the associated performance obligations (e.g. product sales by Croda’s customers) are met

Yes, you certainly could bring in a suitable replacement for SA now and quite frankly the RNS Comms continues to be opaque and confusing and that very much needs to improve. However, the acquisitions are not dire and folks here need to bear in mind the easy thing for SA to have done was sit back fingers crossed and wait for the Croda revenue to come in with plenty of time for Corporate lunches and Executive meets on the Golf Course. Instead he took the difficult option of providing insurance in case the Croda deal fell through by acquiring Companies that meant SBTX would not go into administration costing Investors everything. I take it all Home Owners, car drivers and Overseas travellers on this BB all take out insurance as cover and hopefully none of you have to claim, but think of the money you could save annually if you hadn't needlessly taken out that insurance seems to be the line you are taking with SA

Hi shy, thinkit may be worth you re-reading the Wrap retail RNS announcement again:

"Superdrug is one of the UK's leading beauty and health retailers. The Commercial Agreement is on an exclusive basis for the sale of both AxisBiotix-Ps and AxisBiotix-Ac in Superdrug's UK stores for two years. This will be the first time AxisBiotix for acne has been made commercially available. SkinBioTherapeutics retains the worldwide rights to direct online retail sales of both products via the AxisBiotix website and Amazon.

The initial roll-out of both AxisBiotix products will occur in early September 2025 in Superdrug stores"

"Given the extremely short lead time for manufacture and delivery of both products to meet the stringent launch deadline, they will initially be sold in powder form. However, the longer term intention is to deliver a capsule and/or gum format. SkinBioTherapeutics will be working on these new formulations and looks to acquire additional capital equipment for encapsulation and blister-packaging to keep this work in-house."

Post 2of 2:

Summary Timeline

Phase Timing Cost Focus

Manufacturing Setup July–August 2025 Equipment, raw materials

Packaging & Compliance August 2025 Design, testing, regulatory

Marketing Activation Late Aug–Sept POS, digital, PR

Distribution & Logistics Early Sept 2025 Warehousing, fulfilment

Based on available disclosures, here’s a modeled estimate of how SkinBioTherapeutics is likely allocating the £4.1 million fundraise for the AxisBiotix launch into Superdrug:

💰 Estimated Allocation Breakdown

Cost Category Estimated Allocation Notes

Manufacturing Setup £1.2M – £1.4M Includes capsule-making and blister-pack equipment, raw materials

Packaging & Compliance £600K – £800K Retail-ready formats, regulatory testing, shelf compliance

Marketing & Activation £900K – £1.1M POS materials, digital campaigns, PR, influencer outreach

Inventory Build-Up £500K – £700K Stocking ahead of launch to meet Superdrug demand

Logistics & Distribution £300K – £400K Warehousing, fulfilment, possible slotting fees

Product Development (Capsules & Gum) £200K – £300K R&D and format expansion beyond sachets

Bearing in mind that the cash position was greater than anticipated despite revenues missing expectations and early spend on the Superdrug launch, an indication using AI of the Superdrug Launch spend profile using AI:

The first costs SkinBioTherapeutics will incur for the AxisBiotix launch into S (1of2 posts) superdrug are front-loaded and operationally critical. Here's a breakdown of what hits the books first:

🏭 1. Manufacturing Setup & Scale-Up

• Encapsulation Equipment: Capital expenditure to bring capsule production in-house, reducing reliance on third-party manufacturers.

• Blister-Pack Infrastructure: Required for Superdrug’s retail format; includes tooling, machinery, and compliance testing.

• Raw Material Procurement: Bulk buying of probiotic strains and excipients to meet Superdrug’s initial stocking volumes.

These costs are incurred immediately post-fundraise, as Superdrug’s September 2025 rollout demands readiness by late August.

2. Packaging & Retail Compliance

• Retail-Ready Packaging Design: Includes artwork, barcoding, and shelf-compliant formats.

• Regulatory Labelling: Ensures claims and ingredients meet UK/EU standards for over-the-counter supplements.

• Batch Testing & Stability Trials: Required for shelf-life validation and Superdrug acceptance.

These are incurred within the first 4–6 weeks post-fundraise.

📣 3. Marketing & Launch Activation

• Point-of-Sale Materials: Superdrug shelf talkers, leaflets, and in-store displays.

• Digital Campaigns: Paid media to drive footfall and online traffic.

• PR & Influencer Engagement: Especially around the National Psoriasis Foundation endorsement.

Marketing spend begins in late August, peaking in September 2025 with the launch.

🚚 4. Logistics & Distribution

• Warehousing & Fulfilment Prep: Ensuring SKUs are ready for Superdrug’s distribution centers.

• Retail Slotting Fees (if applicable): Some retailers charge for shelf space, though Superdrug’s terms are not publicly disclosed.

These costs are incurred just before product shipment, likely early September.

Not so sure the acquisitions have flopped although elements such as the Umesh Modi launch have I suspect not met expectations. We must also look at the bigger picture; the Superdrug launch for axis products would not be happening without the Dermatonics contacts and as for neurocosmetics gen z and milleni als are seen as a key market for the products going forward, they favour Superdrug, so any of sbtx products containing zenakine in the future will quickly find a home there

It is net. Cost control my 4rse. Group sales miss expectations because slipped into July, already incurred spend on the Superdrug launch this FY and yet cash £700k better than expected; think we know where the Croda royalties have been buried

Not quite nick, it is a percentage of profits i.e net of costd

Not sure why people are focused on the end product when calculating sbtx royalties on zenakine when it is more logical just to focus on ingredient production and sales by Croda to calculate royalties.

Croda has a 20000 litre dedicated fermentation VAT. Using Co-pilot AI estimates provided the following:

Manufacturing Process Overview

Zenakine™ is produced via biotechnology, specifically through micro-organism culture and biofermentation of Lactobacillus rhamnosus GG, followed by blending with carriers like glycerin, pentylene glycol, and xanthan gum.

⏱ Estimated Timeframes (Industry Benchmarks)

While Croda hasn’t published specific durations, similar biotech actives typically follow this kind of timeline:

• Microbial Cultivation: 2–5 days

o Includes growth of L. rhamnosus GG under controlled conditions.

• Fermentation & Extraction: 1–3 days

o Bioactive compounds are harvested and purified.

• Formulation & Blending: 1–2 days

o Mixed with carriers and stabilizers.

• Quality Control & Packaging: 2–4 days

• Includes microbial testing, stability checks, and final packaging.

Total Estimated Time: ~6 to 14 days per batch, depending on scale and QC protocols.

🧬 Factors That Influence Duration

• Fermentation yield variability

• Batch size and reactor capacity

• Regulatory testing requirements (especially for neurocosmetic claims)

• Storage and transport logistics if outsourced

Zenakine™ Product Launch Timeline (From Concept to Shelf)

Phase Estimated Duration Key Activities

Formulation R&D 4–8 weeks Lab trials, stability testing, sensory evaluation

Ingredient Procurement 3–6 weeks Zenakine™ bulk order, carrier materials, packaging

Regulatory & Claims Review 2–4 weeks INCI compliance, neurocosmetic claims substantiation

Pilot Batch Manufacturing 2–3 weeks Small-scale production, QC, packaging mockups

Consumer Testing / MVP 4–6 weeks Focus groups, feedback, iteration

Full-Scale Manufacturing 3–5 weeks Bulk production, final QC, labeling

Distribution & Retail Prep 2–4 weeks Logistics, retailer onboarding, e-commerce setup

• Total Time to Launch: ~5 to 7 months

(Can be compressed to ~3–4 months with pre-approved formulation and fast-track procurement)

Cost Structure Zenakine™

Ingredient Estimated Cost per L Formulation Complexity Typical Inclusion Rate Cost Impact per Unit

Zenakine™ £1,800 Moderate (aqueous base) 3% Medium–High

Margins likely to be in the range of 60-80% so in theory Croda could be raking in £20M profit on zenakine ingredient sales on a 20000l batch run every 5-6 weeks with sbtxs royalty share = £2M per complete batch sale