CRYOSITE LIMITED — AGM Information 2013

Nov 5, 2013

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6th November 2013

Australian Securities Exchange

Chairman’s Address to Shareholders at the Annual Meeting of Members held on Wednesday 6 November 2013

Good morning ladies and gentlemen and welcome to the 2013 Annual General Meeting of shareholders of Cryosite Limited.

I would like to introduce myself; my name is Andrew Kroger, Chairman of Cryosite. My first job this morning to welcome you to this Annual General Meeting of Cryosite. Firstly, I would like to introduce you to my fellow directors and the executive management team. I would then like to provide you with a review of the company’s results for last year, to highlight the areas of most interest, and most importantly to give you an insight into where the Board and management team believe the company is heading.

As you will be aware, we recently appointed a new non-executive director, Christy Boyce.

I would like to formally welcome Christy to the team and we look forward to tapping into her experience to help the board and management continue to help set the company’s strategic goals and provide general advice and guidance.

I think that you will also know our Managing Director,, Gordon Milliken, our executive director of quality and reg affairs, Graeme Moore, Philip Alger, CFO and company secretary, Bryan Dulhunty.

Now I would like to move onto a review of last year’s key financial indicators:

SALES:

The total sales revenue for the year was $8,497,803, an increase of 9.5% on last year’s figure ($7,775,568).

PROFIT:

The profit for the year was a record $1,249,961. This compares with $1,022,497. So, it is fair to say that we are very pleased with the result, especially as the results were due to a general improvement in both segments of the business rather that as the results on any one-off event.

DIVIDEND:

Following on from our maiden payment last year, this year we have paid a total dividend of 1.5 cents per share. We will continue to assess our financial position and pay out dividends as the board feels is appropriate.

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CASH:

Cash on hand at 30 June 2013 was $5,777,097 (2012: 4,524,750). Cash at 31 October was $5,644,222.

I would now like to briefly summarise the scope of Cryosite’s services:

Cryosite provides a number of services that are aggregated into two market segments:

1. Biological Services, and

2. Warehousing and Distribution

Biological services include the private cord blood service, adult stem cell storage and biorepository management.

Warehousing and distribution includes the clinical trial logistics service, ATCC product distribution and other distribution services.

I would like to take some time now to focus on two areas in particular.

Firstly, the cord blood service. In 2001, Cryosite pioneered private cord blood storage in Australia, and was the first company to be TGA licensed. In May 2012 Cryosite once again demonstrated its commitment to innovation and quality by being the first private cord blood service to have TGA approval for the directed allogenic release of cord blood. Whilst this licence status is now not exclusive to Cryosite, we have continued to maintain a steady increase in cord blood storage clients as a result our leadership role in offering this service.

Last year I mentioned that we had entered into a collaboration with Regeneus, a Sydney based regenerative medicine company to provide assistance in the preparation of in-clinic cell therapies for treating musculoskeletal and other inflammatory condition in humans and animals. Since that time, Regeneus has completed a successful IPO and is moving to an active marketing programme to offer the service. This is good news for Cryosite as we will receive a steady stream of samples for cryopreservation and release for treatment.

The warehousing and distribution service continued to perform extremely well, particularly the clinical trial logistics service. We now have in excess of 400 active trials under management.

With the sustained growth in the number of trials and the increasing complexity in the operational requirements to provide the services, we have recently employed a 3PL logistics manager with broad experience in the design and management of warehouse operations and integrated inventory applications.

Both the ATCC distribution and bio-repository services made valuable contribution to the overall results.

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BUSINESS GROWTH AND OUTLOOK

Until the merger of two other cord blood companies in 2010, Cryosite was the market leader as regards both of market share and innovation. Cryosite is now the second biggest service with a significant share of the total cord blood market. The size of the private cord blood market in Australia is unclear, however, industry estimates of up to 1.5% of births is generally accepted. With the total number of births in Australia around 300,000 per year, this means that the market is somewhere between 3,000 and 4,500.

In common with similar cord blood companies both locally and internationally, Cryosite is investigating methods of expanding revenue from an expansion and extension of our current cord blood activities. In the meantime, Cryosite is continuing to achieve consistent annual increases in the number of cord blood clients and is pleased to report that this year we set another record for new clients. We are continuing to refine and develop our marketing strategy to take advantage of Cryosite’s well established brand name with both medical professionals and prospective customers to ensure that we continue to achieve our historical growth rates and maintain or increase our market share.

The pharmaceutical industry continues to change as it strives for greater innovation to bring new drugs to market. The changes are driven by corporate takeovers, mergers and strategic alliances. The predictable consequence of this activity is that fewer new trials are initiated. Whilst this will reduce the size of the market in general, such a shift in the direction of drug development is very positive for Cryosite.

As we have gained some valuable experience with our first commercial drug distribution agreement, we are considering options as to how we can take advantage of similar opportunities in the future.

Since the relocation of the business from the Lane Cove site four years ago, Cryosite has experienced rapid increases in both sales and profit. However, we have recently recognised that for this to continue, we need to make significant investments in improving both our operational performance and the sales and marketing strategy.

In order to do this, we will need to make a significant investment in engaging the appropriate people with the skills and experience to deliver the necessary outcomes. There will also be some systems and facility upgrades required. Therefore, we expect that the bottom line will suffer temporarily whilst we embark on this new direction.

SHAREHOLDER SUPPORT

The Board and Management are grateful for the continuing support and interest in the company by the shareholders. We remain confident that the company is well positioned to take advantage of both the growth in research and biotechnology activity in Australia, and the increased acceptance of outsourcing of non-core logistics by organisations involved in research clinical trials in Australia and New Zealand.

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Andrew Kroger Chairman