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Australian Oilseeds Holdings Ltd

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Business Summary

Australian Oilseeds Holdings Ltd. (the "Company") operates in the global oilseeds market, which was valued at $249.05 billion in 2023 and is projected to grow to $373.32 billion by 2033, representing a compound annual growth rate (CAGR) of 4.13% during this forecast period . The Company focuses on the manufacture and sale of chemical-free, non-GMO, sustainable edible oils and products derived from oilseeds, aligning its business strategy with the United Nations Sustainable Development Goals (SDGs). The global non-GMO food market, a key segment for the Company, was valued at $740.65 billion in 2023 and is projected to reach $2,003.68 billion by 2032, growing at a CAGR of 11.94% .

The Company's core business model revolves around sourcing non-GMO chemical-free oilseeds through grower-supply contracts with local and regional farmers in New South Wales who employ regenerative farming practices. These oilseeds are then cold-pressed, filtered, and bottled into organic and non-organic food-grade oils, vegetable protein meals, and supplements for stock feed rations. Revenue is generated from wholesale and retail sales of these products, with a significant portion derived from cold-pressed vegetable oils. The Company markets its products through various marketers and distributors in Australia, New Zealand, Japan, and the United States under the trademark "Good Earth Oils."

For the fiscal year ended June 30, 2024, the Company reported total sales revenue of AUD$33,727,222 , an increase of 16.1% from AUD$29,049,345 in the prior year . Wholesale oils contributed AUD$11,481,072 to revenue, representing 34.0% of total sales , a decrease of 43.9% from AUD$20,451,942 in 2023 . Conversely, retail oils, a new revenue stream in 2024, generated AUD$12,557,199 , accounting for 37.2% of total revenue . Hype protein meals for the feed industry saw a significant increase, contributing AUD$9,175,505 to revenue, up 64.5% from AUD$5,577,709 in 2023 , and representing 27.2% of total revenue . Toll crushing service revenue decreased by 89.7% to AUD$222,095 from AUD$2,156,827 in 2023 .

The Company's primary products include a range of organic food-grade oils such as unrefined canola oil, premium canola oil, extra filtered canola oil, RBD canola oil, safflower oil, sunflower oil, RBD sunflower oil, soybean oil, linseed oil, and extra virgin olive oil. Its protein meals consist of organic and non-organic cold-pressed canola, sunflower, safflower, soybean, and linseed meals, primarily used as supplements in stockfeed rations. For fiscal year 2024, approximately 85% of total revenue was derived from the sale of cold-pressed vegetable oils, with the balance from vegetable protein meals .

Key financial metrics for the fiscal year ended June 30, 2024, include a gross profit of AUD$5,916,440 , resulting in a gross margin of 17.5% (AUD$5,916,440 / AUD$33,727,222) . Operating profit was AUD$2,986,972 , representing an operating margin of 8.86% (AUD$2,986,972 / AUD$33,727,222) . The Company reported a net loss for the year of AUD$21,230,681 , compared to a profit of AUD$1,844,970 in 2023 . Basic and diluted loss per share were AUD$(1.07) for 2024, compared to basic and diluted earnings per share of AUD$0.10 in 2023 . Net cash outflows from operating activities were AUD$2,184,930 , while cash and cash equivalents stood at AUD$514,140 . Total current liabilities were AUD$18,353,761 , and total non-current liabilities were AUD$10,735,440 . Total borrowings, including current and non-current, amounted to AUD$7,212,437 .

Year-over-year, sales revenue increased by AUD$4,677,877 , or 16.1% . Gross profit increased by AUD$929,698 , or 18.6% . However, the Company shifted its revenue mix, with wholesale oils decreasing by AUD$8,970,870 and retail oils increasing by AUD$12,557,199 due to new supply contracts with Costco Australia and Woolworth Supermarkets. Hype protein meals revenue increased by AUD$3,597,796 . General and administrative expenses increased by AUD$757,411 , or 30.7% , primarily due to the consolidation of AUD$611,109 in costs from EDOC Acquisition Limited after the business combination. Selling and marketing expenses increased by AUD$412,536 to AUD$412,536 in 2024, as the Company established a sales team and incurred promotion costs for its "Good Earth Oils" brand.

Significant operational developments during the period include the closing of the business combination with EDOC Acquisition Corp. on March 21, 2024, making AOI and EDOC wholly-owned direct subsidiaries of the Company. The Company also secured new supply contracts with Costco Australia, extended to January 2025, and Woolworth Grocery, with annual sales projected as AUD$3.9 million for 4-litre tins of Good Earth Extra Virgin Olive from January 2024 to January 2025, and AUD$3.5 million for 2-litre and 5-litre tins from September 2024 to September 2025 . A new supply agreement with Coles Supermarket for 4-litre tins of Good Earth Oils Extra Virgin Canola Oil commenced in October 2024, with annual sales projected at AUD$1.2 million . The Company expanded its Cootamundra facility, with full operations in the expanded facility commencing in August 2024.

Business Outlook

The Company intends to address the increased global demand for sustainable premium cold-pressed and non-GMO products by expanding its existing cold-pressing capacity from 33,000 metric tons to 65,000 metric tons initially per annum, and eventually to a projected cold-pressing capacity of 80,000 metric tons per annum through its new multi-seed crushing plant at Emerald, Queensland. This expansion aims to position the Company as the largest cold-pressed player in the APAC region. The construction of the new crushing and production plant in Queensland is projected to cost AUD$25 million . The Company has received government support for this project through an Industrial Partnership Program via CQ Oilseeds Pty Ltd. and Energreen Nutrition Australia Pty Ltd., totaling AUD$5 million in incentives plus a grant of tax incentives . The balance of the capital stack for the Queensland plant includes AUD$3 million of funding generated from operating cashflow, AUD$6 million to AUD$10 million in a bank funding facility for construction and equipment financing, and AUD$8 million to AUD$11 million of equity funding to complete the new plant within 15 months . If the Company does not raise all or any of the AUD$8 million to AUD$11 million of equity funding, it intends to fund the shortfall from operating cashflow, which would reduce its results of operation. The new Emerald plant is expected to have a capacity to crush 200 tons of oilseeds per day .

The Company's revenue growth included in its financial projections assumes a significant increase in production capacity due to the new facility in Emerald, Queensland, and the expansion of the Cootamundra facility, as well as success in rolling out AOI's branded products. The expanded Cootamundra facility commenced full operations in August 2024. The new Emerald plant is currently in development, with pre-construction activities for approvals and permissions expected to end by December 31, 2024 . Construction activities for the factory building and machinery are planned in two phases: Phase 1 from January 2025 to January 2026, and Phase II from January 2026 to December 2026 . Hiring and training for commercial operations are scheduled from September 2025 to March 2026 , and contracts and supply chain management from January 2025 to December 2026 . The groundbreaking for the Emerald facility is expected in the first quarter of the 2025 calendar year, with the certificate of completion anticipated in March 2025 .

The Company's ability to continue as a going concern is dependent upon generating sufficient cash from business operations and drawing down additional long-term debt from the Commonwealth Bank of Australia, which has provided a total facility loan of AUD$14,000,000 with unused facilities of AUD$8,000,000 as of June 30, 2024 . Additionally, the Company has the ability to draw down an additional US$6 million of redeemable debentures from existing PIPE investors or execute a US$50 million equity line of credit (ELOC) once the registration statement for the ELOC is lodged . The Company has determined that these sources of liquidity will be sufficient to meet its financing requirements for the one-year period from the issuance of its consolidated financial statements.

Risk Factors

The Company faces several material risks, including significant dependence on revenue from product sales, particularly cold-pressed vegetable oils, making it vulnerable to negative market changes such as increased oilseed prices due to demand exceeding supply, which could negatively impact product margins. A lack of product and business diversification means any risk affecting the agricultural industry could disproportionately affect the Company. Dependence on grower-supply contracts with local and regional farmers for oilseeds poses a risk if these contracts are not renewed or if the quality and quantity of oilseeds decline. A material concentration of revenue from a small group of customers, with three customers accounting for 60.7% of accounts receivable as of June 30, 2024 , means the loss of any key customer could adversely impact cash flows. The Company is subject to global, federal, state, and local regulations, including trade restrictions, food safety, sustainability, and environmental laws, which could materially and adversely affect its business if policies change or new regulations are imposed. Operations are inherently subject to changing conditions like unfavorable weather and environmental conditions (e.g., blight, bush fires, drought, flooding), which could decrease productivity and prevent the Company from meeting product demands. Disruptions in water and power supply could adversely affect the Company's and its suppliers' operations. Operating results may fluctuate due to factors such as decreased product sales, price changes from competitive factors, and increased oilseed costs. The Company's revenue may not achieve budget in FY 2025 while expending capital to expand its Cootamundra facility and construct the new Queensland facility, with development and construction subject to timing, budgeting, and other risks. Failure to effectively promote its brand, particularly its GMO-free cold-pressed vegetable oils, could materially and adversely affect its business. The Company may not be able to hire and retain qualified personnel to support its growth, and the loss of key personnel like Gary Seaton could adversely affect business operations. The retail price of products may be subject to government price controls, potentially reducing profitability. Adverse publicity related to products, raw materials, or suppliers/customers could harm its reputation. The Company may not be able to develop new products, impacting future growth. Operations could be disrupted by maintenance or uncontrollable events like extreme weather, natural catastrophes, or raw material supply disruptions. Improper disclosure or loss of sensitive data due to cyberattacks or other breaches could harm its reputation and incur legal liabilities. Geopolitical risks, including those affecting the supply chain and inflation, could negatively impact international sales and financial conditions, as seen with the Ukraine conflict and Israel-Hamas war. The Company has a history of net losses, reporting AUD$21,230,681 for the year ended June 30, 2024, and its business model is capital-intensive, requiring additional capital that may not be available on attractive terms, potentially leading to shareholder dilution.

Management Priorities

Management's overall tone emphasizes a commitment to transitioning to a renewable and chemical-free economy by manufacturing and selling chemical-free, non-GMO, sustainable edible oils and oilseed-derived products. They highlight the Company's alignment with the UN Sustainable Development Goals and its focus on working with suppliers and customers to eliminate chemicals from the production system. A key strategic priority is addressing increased global demand for sustainable premium cold-pressed and non-GMO products by expanding existing cold-pressing capacity from 33,000 metric tons to 65,000 metric tons initially, and ultimately to 80,000 metric tons per annum , through the new multi-seed crushing plant at Emerald, Queensland. This expansion aims to establish the Company as the largest cold-pressed player in the APAC region. Management also stresses the importance of securing and expanding customer contracts, as evidenced by new supply agreements with Costco Australia and Woolworth Grocery, with projected annual sales of AUD$3.9 million and AUD$3.5 million respectively for specific olive oil products . Another strategic priority is ensuring liquidity and capital resources to fund these expansions, relying on operating cash flows, an AUD$14,000,000 bank facility from Commonwealth Bank of Australia with AUD$8,000,000 unused facilities , and the potential to draw down an additional US$6 million of redeemable debentures from existing PIPE investors or a US$50 million equity line of credit .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Industry Overview
  2. [2] Item 1, Business — The Non-GMO Market Size and Opportunity
  3. [3] Item 7, MD&A — Sales revenue
  4. [4] Item 7, MD&A — Sales revenue
  5. [5] Item 7, MD&A — Revenue
  6. [6] Item 7, MD&A — Revenue
  7. [7] Item 7, MD&A — Revenue
  8. [8] Item 7, MD&A — Revenue
  9. [9] Item 7, MD&A — Revenue
  10. [10] Item 7, MD&A — Revenue
  11. [11] Item 7, MD&A — Revenue
  12. [12] Item 7, MD&A — Revenue
  13. [13] Item 7, MD&A — Revenue
  14. [14] Item 7, MD&A — Revenue
  15. [15] Item 1, Business — The Company's Products and Strategy
  16. [16] Item 7, MD&A — Gross profit
  17. [17] Item 7, MD&A — Gross profit
  18. [18] Item 7, MD&A — Operating profit
  19. [19] Item 7, MD&A — Operating profit
  20. [20] Item 7, MD&A — (Loss) Profit for the year
  21. [21] Item 7, MD&A — (Loss) Profit for the year
  22. [22] Item 8, Note 25 — Basic (loss) earnings per share (cents)
  23. [23] Item 8, Note 25 — Diluted (loss) earnings per share (cents)
  24. [24] Item 7, MD&A — Liquidity and Capital Resources
  25. [25] Item 7, MD&A — Liquidity and Capital Resources
  26. [26] Item 8, Consolidated Statement of Financial Position — TOTAL CURRENT LIABILITIES
  27. [27] Item 8, Consolidated Statement of Financial Position — TOTAL NON-CURRENT LIABILITIES
  28. [28] Item 8, Note 12 — Schedule of Borrowings
  29. [29] Item 7, MD&A — Revenue
  30. [30] Item 7, MD&A — Revenue
  31. [31] Item 7, MD&A — Gross profit
  32. [32] Item 7, MD&A — Gross profit
  33. [33] Item 7, MD&A — Revenue
  34. [34] Item 7, MD&A — Revenue
  35. [35] Item 7, MD&A — Revenue
  36. [36] Item 7, MD&A — General and administrative expenses
  37. [37] Item 7, MD&A — General and administrative expenses
  38. [38] Item 7, MD&A — General and administrative expenses
  39. [39] Item 7, MD&A — Marketing expenses
  40. [40] Item 7, MD&A — Marketing expenses
  41. [41] Item 1, Business — Sales and Marketing and Customer Contracts
  42. [42] Item 1, Business — Sales and Marketing and Customer Contracts
  43. [43] Item 1, Business — Facilities and Expansion
  44. [44] Item 1, Business — Facilities and Expansion
  45. [45] Item 1, Business — Facilities and Expansion
  46. [46] Item 1, Business — Facilities and Expansion
  47. [47] Item 1, Business — Facilities and Expansion
  48. [48] Item 1, Business — Facilities and Expansion
  49. [49] Item 1, Business — Facilities and Expansion
  50. [50] Item 1, Business — Facilities and Expansion
  51. [51] Item 1, Business — Facilities and Expansion
  52. [52] Item 7, MD&A — Liquidity and Capital Resources
  53. [53] Item 7, MD&A — Liquidity and Capital Resources
  54. [54] Item 8, Note 3 — Concentration of Key Customers
  55. [55] Item 7, MD&A — (Loss) Profit for the year
  56. [56] Item 1, Business — The Company's Products and Strategy
  57. [57] Item 1, Business — Sales and Marketing and Customer Contracts
  58. [58] Item 7, MD&A — Contractual Obligations and Commitments and Liquidity Outlook
  59. [59] Item 7, MD&A — Contractual Obligations and Commitments and Liquidity Outlook

Analysis on 5/20/2026