In this Open Briefing®, Chairman Iain Kirkwood discusses:

- TALI Health acquisition by Avexa

- TALI technology overview

- Childhood developmental difficulties

- Company Strategy and Outlook

Record of interview:

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Avexa Limited (ASX: AVX) announced in late 2015 that the Company was acquiring TALI Health Pty Limited (TALI), a business that is developing technology to assess and treat attention difficulties in childhood. This technology is aimed at children who are at heightened risk of attention difficulties due to an underlying developmental disability, such as Autism or ADHD. The TALI Process was developed by neuroscientists at the School of Psychological Sciences at Monash University over the last three years and is now being commercialised via TALI Health Pty Limited. The acquisition of TALI Health Pty Limited was settled on 15th February 2016 via the issue of 27,584,420 shares (valued at $1.1 million) through a private placement and SPP.
What due diligence did the Avexa board do in its appropriation of TALI Health Pty Limited?
What does this acquisition mean to Avexa Ltd and its shareholders and where will the funds raised be spent?

Executive Chairman Iain Kirkwood
The Avexa Board, Management and its Advisors investigated TALI Health Pty Limited extensively over a number of months prior to recommending the acquisition to its shareholders. The key components of the due diligence centred on the TALI Technology, including the clinical research conducted by Monash University, the back end development conducted by Grey Innovation and the game face development conducted by Torus Games.
In particular, the Avexa Board focused on the main protagonists; Professor Kim Cornish and Dr Hannah Kirk from Monash University, and the teams at Grey Innovation and Torus Games. We looked at the results of the clinical trials, a first in this area, which the Board felt differentiated the technology from others in the market and represented an exciting opportunity for our Shareholders. Furthermore, the delivery of the TALI Technology via a tablet based application platform, makes it extremely accessible and user friendly for children and their families.
The market potential for the TALI Technology is significant as there is an ever increasing awareness of the prevalence of ‘Developmental Delay’ and the detrimental impact of poor attention. In Australia alone there are 400,000 children with attention difficulties and 650,000 with developmental delay, both disorders that significantly impact their social, behavioural and educational development.
The acquisition of TALI Health opens up a new venture in medical technology for Avexa providing the potential for a significant increase in shareholder value from its current very low base as TALI commences commercialisation. The funds raised so far through the Private Placement and Share Purchase Plan have been, and will continue to be used to progress the development and marketing of the TALI Technology and prepare for an initial launch to the market by the end of the 2016 calendar year.

Fig 1. TALI Health Video

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The development of the TALI process, a collaboration between Grey Innovation, Torus Games and Monash University, brings significant expertise and a history of research and development into this solution. Can you explain the basis of the science, the delivery platform and how TALI works to improve cognitive abilities in these children?

Executive Chairman Iain Kirkwood
The Training Attention and Learning Initiative (TALI) is a scientifically driven program designed to assess and improve attention in childhood. The program consists of four touchscreen activities and lasts 20 minutes in duration. The program continuously adapts to the child’s performance to challenge and sharpen their attention skills. Children complete the program five days a week over a five-week training period. TALI also provides access to deeper analytics about the individual’s performance on each of the exercises, allowing clinicians, teachers and parents to identify areas of attentional strengths and weaknesses.
The management of attention deficits at home and in the classroom has largely focused on behavioural strategies. Currently psychostimulant medication such as Ritalin is the most commonly prescribed treatment for attention difficulties. This type of pharmacological intervention although effective in some, does not work for all children and brings with it a host of potentially adverse side effects. TALI instead focuses on strengthening underlying attentional processes to support children’s development and education. Unlike other interventions, TALI recognises that not all children have the same degree or type of attention difficulty. The TALI Technology is tailored to the unique needs of each child thus avoiding a “one size fits all” approach to intervention.
A randomized controlled Clinical Trial showed that the TALI program was effective in promoting sustainable improvements in aspects of attention and academic skills in children who are ‘at risk’ of attention difficulties due to an underlying developmental disability, e.g. autism spectrum disorder and down syndrome.
TALI Health is excited to begin the next step in its mission to treat and profile childhood attention difficulties.

Fig 2. TALI data analysis

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Who are the key people behind the science and the technology that produces the games and system? What is the role of the Advisory Board?

Executive Chairman Iain Kirkwood
The science (or the TALI Process) is a result of ground breaking research pioneered over 20 years by internationally renowned Professor Kim Cornish, Head of School of Psychological Sciences at Monash University and her team including Dr Hannah Kirk who now works for Avexa as our Chief Research Officer.
The TALI Technology was developed by leading neuroscientists within the field of attention research, in collaboration with DreamWorks contractor Torus Games and technology commercialisation firm, Grey Innovation. Therefore, each training exercise is directed by a wealth of evidence published in peer-reviewed scientific journals and incorporates high quality game engine design and user experience. Grey Innovation has a strong track record in developing medical device technology, and has developed and delivered products to the global market for nearly two decades.
The Scientific Advisory Board has the important role of ensuring that the research behind the TALI Process is always at the forefront of its field and with the world renowned experts including; Professor Gaia Scerif from the School of Developmental Psychology, Oxford University (UK), Professor Mark Bellgrove specialist in Attention (ADHD) from Monash University (AUS), Professor Vicki Anderson, Child Neuropsychology (TBI) from the Murdoch Children's Research Institute (AUS), and Dr Jane Roberts from the School of Developmental & Educational Psychology, University of South Carolina (USA), all being Chaired by Professor Kim Cornish from the Monash School of Psychological Sciences, the Board of Avexa is highly confident the TALI Scientific Advisory Board is made up of the correct experts in the field to ensure TALI is the leader in the field of assessment and treatment of Childhood Developmental Delay.

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What is the size of the current Australian market and what solutions do parents of development disability children utilise currently? How is TALI differentiated?

Executive Chairman Iain Kirkwood
In Australia, alone there are over 650,000 children with a diagnosed developmental disability. Attention difficulties are one of the earliest emerging features of developmental disability, and therefore assessing these difficulties early can aid in the detection and treatment of disorders such as autism. Currently children with autism are often not diagnosed until the age of 6 or 7, thus missing out on early interventions that are crucial in allowing them to reach their full potential. The TALI Technology has the potential to flag these attention difficulties to parents early in childhood, and to reduce the significant economical and personal costs of untreated attention and developmental difficulties.
The TALI Process not only simplifies, but also removes the subjectivity behind the assessment of attention difficulties that act as early indicators of Developmental Delay. Therefore, providing a more accurate tool to identify particular areas of development concern in childhood and assisting in the treatment of that specific concern.

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Is TALI currently being used or trailed in Australia? Are there results or feedback that you can discuss?

Executive Chairman Iain Kirkwood
Yes, as previously announced in March, TALI is currently being trialled and evaluated in the Listen And Learn Centre based in Balwyn, Victoria as well as a number of other clinics located through Victoria.
Dr Kirk is also in discussion with over 50 clinics throughout Australia and internationally who have a very keen interest in TALI and are adopting the TALI Technology as soon as it is available.

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What are the avenues that TALI is being marketed through and can you describe the overall marketing strategy and revenue model?

Executive Chairman Iain Kirkwood
The Beta version of TALI is expected to be launched in Q4 2016 initially through leading centers such as Listen And Learn and via Clinical Professionals. Revenue streams are expected from a licensing structure and payment for reports.

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What are the milestone ahead that shareholders can look forward to?

Executive Chairman Iain Kirkwood
Avexa Ltd has a number of key milestones planned for the remainder of 2016, including the:
- Formal name change of the company from Avexa Limited to TALI Health Limited;
- Memorandum of Understandings entered into with at least five leading Developmental Delay Clinical Therapy Centres;
- Controlled launch of TALI in centres within Australia; and
- Formal appointment of a Chief Executive Officer to lead the release of the TALI Technology into the market.

Furthermore, Avexa will be working closely with Clinicians to perfect the company’s business model, billing and reporting schedules, with full scale commercial product release forecasted for Q4 2016 pending any unforeseen delays in the development of the TALI Technology which the Board does not expect.
During the continued development of the TALI Technology, the Board of Avexa Ltd will see change with two Directors stepping down and the formal appointment of a Chief Executive Officer. We envisage this to occur within the second half of 2016 in line with the formal product release.

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With quite a lot of development underway, is Avexa currently sufficiently funded for all planned activities?

Executive Chairman Iain Kirkwood
The Board continues to actively explore all funding opportunities including non-dilutive government grants and tax refunds which will enable Avexa to reach a full scale commercial product release by the end of the 2016 calendar year.

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Thank you Iain.

For more information about Avexa Limited, visit www.avexa.com.au or call Iain Kirkwood on +61 3 8888 1040