Australian Oilseeds Holdings Ltd

Previous wording

Sales revenue increased by AUD$0.6 million or 6.1% to AUD$10.3 million for the three-month period ended on 30 September 2024, compared to AUD$9.7 million for the three-month period ended 30 September 2023, primarily due to favorable market conditions resulting from an increase in the demand for cold pressed canola oil resulting from the Company’s expanded customer contracts.

Current wording

Sales revenue increased by AUD$0.5 million or 4.5% to AUD$10.4 million for the three-month period ended on 31 December 2024, compared to AUD$10.0 million for the three-month period ended 31 December 2023, primarily due to favorable market conditions resulting from an increase in the demand for cold pressed canola oil resulting from the Company’s expanded customer contracts.

Previous wording

Wholesale oils represented 20.2% of our revenue for the three months ended 30 September 2024, compared to 32.4% for the three months ended 30 September 2023, and decreased AUD$1.1 million, as compared to the prior year. Retail oils represented 55.2% of our revenue for the three months ended 30 September 2024, compared to 36.6% for the three months ended 30 September 2023, and increased AUD$2.1 million, as compared to the prior period. The primary driver for the revenue decrease in wholesale oils and the revenue increase in retail oils for the three months ended 30 September 2024 compared to the previous period was due to the Company securing two supply contracts to supply 15 Costco Australia stores and 1,111 Woolworth Supermarkets national stores, Australia’s largest supermarket chain. The Company also developed three new SKU to target the retail consumers from 2024 through integrated marketing campaign with the supermarkets. As the Company focused on developing the retail market during the current quarter of 2024, the whole sales proportion became smaller than last year quarter. Hype protein meals for the feed industry represented 24.3% of our revenue for the three months ended 30 September 2024, compared to 27.7% for the three months ended 30 September 2023, and decreased AUD$0.2 million as compared to the prior period. The primary driver for the revenue decrease in hype protein meals for the three months ended 30 September 2024, compared to the previous period was a decrease of sales price of protein meal due to Australia experiencing rainfall year caused less demand of protein meal in feedlot market.

Current wording

Wholesale oils represented 22.6% of our revenue for the three months ended 31 December 2024, compared to 30.7% for the three months ended 31 December 2023, and decreased AUD$0.7 million, as compared to the prior year. Retail oils represented 49.8% of our revenue for the three months ended 31 December 2024, compared to 35.2% for the three months ended 31 December 2023, and increased AUD$1.7 million, as compared to the prior period. The primary driver for the revenue increase in retail oils for the three months ended 31 December 2024 compared to the previous period was due to the Company securing three supply contracts to supply 15 Costco Australia stores, 1,050 Woolworth Supermarkets national stores and 850 Coles supermarket stores throughout Australia. The Company also developed four new SKU to target the retail consumers from 2024 through integrated marketing campaign with the supermarkets. As the Company focused on developing the retail market during the current quarter of 2024, the whole sales proportion became smaller than last year quarter. High protein meals for the feed industry represented 27.3% of our revenue for the three months ended 31 December 2024, compared to 32.8% for the three months ended 31 December 2023, and decreased AUD$0.4 million as compared to the prior period. The primary driver for the revenue decrease in high protein meals for the three months ended 31 December 2024, compared to the previous period was a decrease of sales price of protein meal due to Australia experiencing good rainfall year caused less demand of protein meal in feedlot market.

Previous wording

Toll crushing service, seeds, and other sales represent a small portion of our revenue. Those categories combined represented 0.2% of the revenue for the three months ended 30 September 2024, compared to 3.3% for the three months ended 30 September 2023, a decrease of AUD$0.3 million for the three months ended 30 September 2024, as compared to the three months ended 30 September 2023.

Current wording

Other sales represent a small portion of our revenue and represented 0.4% of the revenue for the three months ended 31 December 2024, compared to 1.2% for the three months ended 31 December 2023, a decrease of AUD$0.08 million for the three months ended 31 December 2024, as compared to the three months ended 31 December 2023.

Previous wording

The cost of sales for the three months ended 30 September 2024 was AUD$9.5 million, an increase of AUD$2.2 million, or 30.7% as compared to the three months ended 30 September 2023. The primary reason for the increase was caused by cost of material (canola seed) in a rise and labor cost increase during the quarter. The cost component changed as a result of recognizing cost of finished goods when the oil products were sold in the retail market. The decrease gross margin was mainly due to the development of “Good Earth Oils” branding products in the retail market with support of strong marketing campaign. It is attributed to an increase in cost of finished goods when the Company outsourced coconut oils from overseas suppliers.

Current wording

The cost of sales for the three months ended 31 December 2024 was AUD$9.2 million, an increase of AUD$1.1 million, or 13.4% as compared to the three months ended 31 December 2023. The primary reason for the increase was caused by cost of material (canola seed), Increase in cost of packaging material due to increase in retail sales, and labor cost increase during the quarter. The cost component changed as a result of recognizing cost of finished goods when the oil products were sold in the retail market. The decrease gross margin was mainly due to the development of “Good Earth Oils” branding products in the retail market with support of strong marketing campaign.

Previous wording

General and administrative expenses for the three months ended 30 September 2024 were AUD$0.8 million, a decrease of AUD$0.1 million, or 6.3%, compared to the three months ended 30 September 2023. This decrease was primarily due to one off SEC filing cost of F4 invoiced during the three months ended 30 September 2023..

Current wording

Selling and marketing expenses for the three months ended 31 December 2024 were AUD$0.08 million, a decrease of AUD$0.1 million, or 54.3% compared to the three months ended 31 December 2023. This decrease was due to recognition of Bad debt amounting to nil and AUD 142K in period ended 31 December 2024 and 31 December 2023.

Previous wording

Other income for the three months ended 30 September 2024 was AUD$0.032 million, an increase of AUD$0.03 million, or 1,857.3% compared to the three months ended 30 September 2023. This increase was primarily due to recovery income from distributor due to damaged pack and interest charge on overdue debt..

Current wording

Other income for the three months ended 31 December 2024 was AUD$0.03 million, a decrease of AUD$0.01 million, or 24.3% compared to the three months ended 31 December 2023. This decrease was primarily due to Interest charges to customers.

Previous wording

Finance expenses increased by AUD$0.4 million or 338.8% to AUD$0.5 million for the three months ended 30 September 2024 compared to AUD$0.1 million for the three months ended on 30 September 2023, primarily due to the fact that the Company began to repay the AUD$4m asset finance provided by Commonwealth Bank of Australia to expand the existing Cootamundra Oilseeds factory plant, the amortization of the convertible note discount of AUD$0.1 million and the interest accrual on the promissory notes with American Physicians LLC.

Current wording

Finance expenses increased by AUD$0.2 million or 190.9% to AUD$0.3 million for the three months ended 31 December 2024 compared to AUD$0.1 million for the three months ended on 31 December 2023, primarily due to the fact that the Company began to repay the AUD$4m asset finance provided by Commonwealth Bank of Australia to expand the existing Cootamundra Oilseeds factory plant, the amortization of the convertible note discount of AUD$0.1 million and the interest accrual on the promissory notes with American Physicians LLC and utilization of trade finance facility from Commonwealth Bank of Australia.

Previous wording

We incurred a loss after income tax of AUD$646,333 for the three months ended 30 September 2024 and incurred profit after tax of AUD$1,410,531 for the three months ended 30 September 2023. We were in a net current liability position of AUD$8,271,654 for the three months ended 30 September 2024 and a net current liability position of AUD$6,965,530 for the three months ended 30 September 2023. Net cash inflows from operating activities were AUD$588,341 for the three months ended 30 September 2024 and net cash outflows from operating activities were AUD$1,537,163 for the three months ended 30 September 2023.

Current wording

The Company incurred a loss after income tax for 3 months ended 31 December 2024 of AUD$320,332 (31 December 2023: Profit AUD$970,388) and for six months ended 31 December 2024 a loss of AUD$966,665 (31 December 2023: Profit AUD$2,380,919). The Company was in a net current liability position of AUD$8,392,672 as of 31 December 2024 (30 June 2024: AUD$6,965,530). Net cash outflow from operating activities was AUD$ 2,468,989 for the six months ended 31 December 2024 (31 December 2023: AUD$1,587,408).

Previous wording

As at 30 September 2024 and 30 June 2024, the consolidated entity had cash in hand and at bank of AUD$2,127,738 and AUD$514,140, respectively.

Current wording

As at 31 December 2024 and 30 June 2024, the consolidated entity had cash in hand and at bank of AUD$1,437,667 and AUD$514,140, respectively.

Previous wording

In addition to the above unpaid costs incurred by ADOC, we incurred additional professional costs of AUD$1,031,301 in relation to the NASDAQ listing activities this current year, with AUD$501,917.15 paid and the remaining balance unpaid as of 30 September 2024.

Current wording

In addition to the above unpaid costs incurred by ADOC, we incurred additional professional costs of AUD$1,031,301 in relation to the NASDAQ listing activities this current year, with AUD$501,917 paid and the remaining balance unpaid as of 31 December 2024.

Previous wording

Therefore, our ability to continue its business activities as a going concern is dependent upon us deriving sufficient cash from the business operation and being able to draw down additional long-term debt from the senior debt provider, Commonwealth Bank of Australia, who has provided a total facility loan of AUD$14,000,000 with unused facilities as at 30 September 2024 of AUD$8,000,000. In addition, we also have the ability to draw down an additional US$6 million of redeemable debentures from the existing PIPE investors or the executed US$50 million equity line of credit (ELOC) once the Company lodges the registration statement of the ELOC. The Company has determined that the Company’s sources of liquidity will be sufficient to meet the Company’s financing requirements for the one-year period from the issuance of its consolidated financial statements.

Current wording

Therefore, our ability to continue its business activities as a going concern is dependent upon us deriving sufficient cash from the business operation and being able to draw down additional long-term debt from the senior debt provider, Commonwealth Bank of Australia, who has provided a total facility loan of AUD$14,000,000 with unused facilities as at 31 December 2024 of AUD$6,028,897. In addition, we also have the ability to draw down an additional US$6 million of redeemable debentures from the existing PIPE investors or the executed US$50 million equity line of credit (ELOC) once the Company lodges the registration statement of the ELOC. The Company has determined that the Company’s sources of liquidity will be sufficient to meet the Company’s financing requirements for the one-year period from the issuance of its consolidated financial statements.

Previous wording

As of 30 September 2024, our net cash and cash equivalents provided by (used in) operating activities consists primarily of AUD$9,744,089 of cash receipts from customers and AUD$8,689,066 of payments to suppliers and employees including AUD$3,606,051 of canola seed stock purchase (5,078-ton stock purchase) for the existing crushing plant with the completion of expansion that was commissioned July 2024.

Current wording

As of 31 December 2024, our net cash and cash equivalents provided by (used in) operating activities consists primarily of AUD$18,663,267 of cash receipts from customers and AUD$20,471,825 of payments to suppliers and employees.

Previous wording

By comparison, the Company’s net cash and cash equivalents received in operating activities during as of 30 September 2023, consists primarily of AUD$8,867,322 of cash receipts from customers and AUD$10,626,767 of payments to suppliers and employees.

Current wording

By comparison, the Company’s net cash and cash equivalents received in operating activities as of 31 December 2023, consists primarily of AUD$19,727,952 of cash receipts from customers and AUD$21,046,214 of payments to suppliers and employees.

Previous wording

Net cash and cash equivalents used in investing activities during the three months ended 30 September 2024, consisted of AUD$577,351 of purchased property and equipment.

Current wording

Net cash and cash equivalents used in investing activities during the six months ended 31 December 2024, consisted of AUD$805,084 of purchased property and equipment.

Previous wording

By comparison, the Company’s net cash and cash equivalents used in investing activities during the three months ended 30 September 2023, consisting primarily of AUD$640,891 of purchased property and equipment.

Current wording

By comparison, the Company’s net cash and cash equivalents used in investing activities during the six months ended 31 December 2023, consisting primarily of AUD$1,716,060 of purchased property and equipment.

Previous wording

Net cash flows from financing activities were AUD$1,602,608 for the three months ended 30 September 2024, which primarily from related party loans.

Current wording

Net cash flows from financing activities were AUD$4,197,600 for the six months ended 31 December 2024, consisted of net cash inflow related party loans AUD$2,800,660, trade facility borrowings AUD$ 1,971,103 and repayment of loan AUD$ 547,201.

Previous wording

By comparison, the Company’s net cash flows from financing activities was AUD$2,437,837 for the three months ended 30 September 2023, which primarily consisted of the net cash inflow of AUD$3,477,205 from the related party loans and AUD$896,903 inflow from secured borrowings, offset by AUD$1,992,041 of payments of secured borrowings.

Current wording

By comparison, the Company’s net cash flows from financing activities was AUD$3,603,210 for the six months ended 31 December 2023, which consisted of the net cash inflow from the related party loans AUD$ 5,629,458, offset by AUD$1,992,041 payment of secured borrowings.

Previous wording

In addition to providing financial measurements based on IFRS, we provide an additional financial metric that is not prepared in accordance with IFRS, or non-IFRS financial measure. We use this non-IFRS financial measure, in addition to IFRS financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation, and to evaluate our financial performance. This non-IFRS financial measure is Adjusted EBITDA, as discussed below.

Current wording

In addition to providing financial measurements based on International Accounting Standards, we provide an additional financial metric that is not prepared in accordance with International Accounting Standards, or non- International Accounting Standards financial measure. We use this non- International Accounting Standards financial measure, in addition to International Accounting Standards financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation, and to evaluate our financial performance. This non- International Accounting Standards financial measure is Adjusted EBITDA, as discussed below.

Previous wording

We believe that this non-IFRS financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as it facilitates comparing financial results across accounting periods and to those of peer companies. We also believe that this non-IFRS financial measure enables investors to evaluate our operating results and future prospects in the same manner as we do. This non-IFRS financial measure may exclude expenses and gains that may be unusual in nature, infrequent, or not reflective of our ongoing operating results.

Current wording

We believe that this non- International Accounting Standards financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as it facilitates comparing financial results across accounting periods and to those of peer companies. We also believe that this non- International Accounting Standards financial measure enables investors to evaluate our operating results and future prospects in the same manner as we do. This non- International Accounting Standards financial measure may exclude expenses and gains that may be unusual in nature, infrequent, or not reflective of our ongoing operating results.

Previous wording

The non-IFRS financial measure does not replace the presentation of our IFRS financial measures and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with IFRS.

Current wording

The non- International Accounting Standards financial measure does not replace the presentation of our International Accounting Standards financial measures and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with International Accounting Standards.

Previous wording

We consider Adjusted EBITDA to be an important indicator of the operational strength and performance of our business and a good measure of our historical operating trends. Adjusted EBITDA eliminates items that we do not consider to be part of our core operations. We define Adjusted EBITDA as IFRS net loss excluding the following items: interest income; income taxes; depreciation and amortization of tangible and intangible assets; unit and stock-based compensation; Business Combination transaction expenses; and other non-recurring items that may arise from time to time.

Current wording

We consider Adjusted EBITDA to be an important indicator of the operational strength and performance of our business and a good measure of our historical operating trends. Adjusted EBITDA eliminates items that we do not consider to be part of our core operations. We define Adjusted EBITDA as International Accounting Standards net loss excluding the following items: interest income; income taxes; depreciation and amortization of tangible and intangible assets; unit and stock-based compensation; Business Combination transaction expenses; and other non-recurring items that may arise from time to time.

Previous wording

The non-IFRS adjustments, and our basis for excluding them from our non-IFRS financial measure, are outlined below:

Current wording

The non- International Accounting Standards adjustments, and our basis for excluding them from our non- International Accounting Standards financial measure, are outlined below:

Previous wording

The following table reconciles IFRS net profit to Adjusted EBITDA during the periods presented (in thousands):

Current wording

The following table reconciles International Accounting Standards net profit to Adjusted EBITDA during the periods presented (in thousands):

Previous wording

Our ability to continue as a going concern is dependent upon our ability to generate cashflows from operations, which projected to AUD$2.5m net profit before tax from January 2025 to December 2025, and draw down additional long-term debt from the senior debt provider, Commonwealth Bank of Australia, who has provided a total facility loan of AUD$14,000,000 with unused facilities as at 30 September 2024 of AUD$8,000,000 and draw down an additional US$6 million of redeemable debentures from the existing PIPE investors or the executed US$50 million equity line of credit (ELOC) once the Company lodges the registration statement of the ELOC. The Company has determined that the Company’s sources of liquidity will be sufficient to meet the Company’s financing requirements for the one year period from the issuance of its consolidated financial statements but there can no assurance these sources are sufficient to fund our capital expenditures, working capital and other cash requirements in the long term. There can be no assurance that the steps management is taking will be successful.

Current wording

Our ability to continue as a going concern is dependent upon our ability to generate cashflows from operations, which projected to XXX net profit before tax from January 2025 to December 2025, and draw down additional long-term debt from the senior debt provider, Commonwealth Bank of Australia, who has provided a total facility loan of AUD$14,000,000 with unused facilities as at 31 December 2024 of AUD$6,028,897and draw down an additional US$6 million of redeemable debentures from the existing PIPE investors or the executed US$50 million equity line of credit (ELOC) once the Company lodges the registration statement of the ELOC. The Company has determined that the Company’s sources of liquidity will be sufficient to meet the Company’s financing requirements for the one year period from the issuance of its consolidated financial statements but there can no assurance these sources are sufficient to fund our capital expenditures, working capital and other cash requirements in the long term. There can be no assurance that the steps management is taking will be successful.

Previous wording

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with International Financial Reporting Standards (IFRS). In preparing our financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our reported revenue, results of operations, and net income or loss, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods. These estimates, assumptions, and judgments are necessary because future events and their effects on our results and the value of our assets cannot be determined with certainty and are based on our historical experience and on other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.

Current wording

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with International Accounting Standards. In preparing our financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our reported revenue, results of operations, and net income or loss, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods. These estimates, assumptions, and judgments are necessary because future events and their effects on our results and the value of our assets cannot be determined with certainty and are based on our historical experience and on other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.

Previous wording

We generate revenue from the sale of products and services. There has been no change on our revenue recognition policies is included in the Form 10-K for the financial year ended 30 June 2024.

Current wording

We generate revenue from the sale of products and services. There has been no change in our revenue recognition policies is included in the Form 10-K for the financial year ended 30 June 2024.

Previous wording

For contracts with customers entered into during the three months ended 30 September 2024 and 2023, revenue from the sales of our products increased by AUD$0.5 million or 6.1% to AUD$10.3 million for the three months ended on 30 September 2024 compared to AUD$9.7 million for the three months ended 30 September 2023, primarily due to favorable market conditions resulting from an increase in the demand for cold pressed canola oil.

Current wording

For contracts with customers entered into during the three months ended 31 December 2024 and 2023, revenue from the sales of our products increased by AUD$0.4 million or 4.5% to AUD$10.4 million for the three months ended on 31 December 2024 compared to AUD$10.0 million for the three months ended 31 December 2023, primarily due to favorable market conditions resulting from an increase in the demand for cold pressed canola oil.