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Australian Oilseeds Holdings Ltd

COOTW
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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 the sale of these products to wholesale distributors and directly to retail customers, with a mix of recurring and transactional income through standard sales contracts.

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 constituted 34.0% of revenue in 2024, decreasing from 70.5% in 2023 . Retail oils, a new revenue stream in 2024, accounted for 37.2% of total revenue, generating AUD$12,557,199 . Hype protein meals for the feed industry represented 27.2% of revenue in 2024, up from 19.2% in 2023, and increased by AUD$3,597,796 . Toll crushing service, seeds, and other sales collectively represented 0.7% of revenue in 2024, a decrease from 7.4% in 2023 .

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 approximately 17.5% (AUD$5,916,440 / AUD$33,727,222). Operating profit was AUD$2,986,972 , yielding an operating margin of approximately 8.86%. The Company reported a net loss for the year of AUD$(21,230,681) , compared to a profit of AUD$1,844,970 in the prior year . Basic and diluted loss per share were both AUD$(1.07) , compared to basic and diluted earnings per share of AUD$0.10 in the prior year . Cash and cash equivalents stood at AUD$514,140 as of June 30, 2024, while 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$7,212,437 . Net cash outflows from operating activities were AUD$(2,184,930) .

Year-over-year comparisons show a significant shift in revenue mix, with retail oils emerging as a major contributor in 2024 (37.2% of total revenue) , while wholesale oils decreased by AUD$8,970,870 or 43.9% . Hype protein meals saw a substantial increase of AUD$3,597,796 or 64.5% . Gross profit increased by AUD$929,698 or 18.6% . General and administrative expenses increased by AUD$757,411 or 30.7% to AUD$3,224,843 , 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 , reflecting the establishment of the Good Earth Oils sales team and supermarket promotion activities. Finance expenses increased by AUD$223,078 or 36.4% to AUD$835,813 , driven by the utilization of a trade facility and interest accrual on promissory notes. A recapitalization expense of AUD$23,210,293 was recognized in 2024 due to the business combination.

Significant operational developments during the period include the consummation of a business combination with EDOC Acquisition Corp. on March 21, 2024, resulting in the Company becoming a publicly traded entity on Nasdaq under the symbols "COOT" and "COOTW" . The Company secured two supply contracts to supply 15 Costco Australia stores and 1,111 Woolworth Supermarkets national stores, and also developed three new SKUs to target retail consumers . The Company acquired Good Earth Oils Pty Ltd. in July 2023 . The Company expanded its existing Cootamundra facility, with full operations in the expanded facility commencing in August 2024 . Additionally, the Company is constructing a new multi-seed crushing plant near Emerald, Queensland, with a projected cold-pressing capacity of 80,000 metric tons per annum .

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 through its new multi-seed crushing plant at Emerald, Queensland, with a projected cold-pressing capacity of 80,000 metric tons per annum . This expansion is expected to allow the Company to market itself as the largest cold-pressed player in the APAC region. The Company's revenue growth included in financial projections assumes this 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 construction of the new crushing and production plant in Queensland is projected to cost AUD$25 million . The Company has received government support through an Industrial Partnership Program via CQ Oilseeds Pty Ltd. and its parent entity, Energreen Nutrition Australia Pty Ltd., in the amount of AUD$5 million of incentives plus a grant of tax incentives . The balance of the capital stack to fund the 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 its operating cashflow, which would reduce its results of operation. The groundbreaking for the Emerald plant will occur in the first quarter of the 2025 calendar year, with the construction period expected from January 2025 to December 2026, and the receipt of the certificate of completion is expected 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 senior debt provider, 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.

The Company expects to adhere to an implementation methodology for the Emerald facility, with pre-construction activities, including approvals and permissions, expected to end by December 31, 2024 . Factory building and machinery construction is planned in two phases: Phase 1 from January 2025 to January 2026, and Phase II from January 2026 to December 2026 . Commercial operations, including hiring and training, are scheduled from September 2025 to March 2026, and contracts and supply chain management from January 2025 to December 2026 .

Risk Factors

The Company faces several material risks, including significant dependence on revenues from the sale of its products, particularly cold-pressed vegetable oils, which accounted for approximately 85% of total revenue in fiscal year 2024 . A decrease in product sales or an increase in oilseed costs due to increased demand or industry supply issues could negatively impact product margins and financial results. The Company lacks product and business diversification, making it vulnerable to negative market changes in the agricultural industry. Dependence on contracts with local and regional farmers for oilseeds means that the loss or non-renewal of these contracts, or a decline in the quality or quantity of oilseeds supplied, could materially affect the business . A material concentration of revenue from a small group of customers, with the top five customers accounting for 64.8% of total sales in 2024 and the top three for 49.4% , poses a risk if any of these customers reduce purchases or terminate contracts. The Company is subject to global, federal, state, and local regulations, including trade restrictions, food safety, sustainability, and environmental laws, which could lead to increased costs, fines, or damage to its reputation if not complied with . Operations are inherently subject to changing conditions such as unfavorable weather (blight, bush fires, drought, flooding) and environmental conditions, which can affect production levels and costs, potentially leading to inability to meet product demands . Disruptions in water and power supply could adversely affect the Company's and its suppliers' operations. 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 a projected total cost of AUD$25 million for the Queensland plant . If the Company does not raise the anticipated AUD$8 million to AUD$11 million of equity funding for the new plant, it intends to fund the shortfall from operating cashflow, which would reduce its results of operation . Failure to effectively promote its brand, particularly its GMO-free cold-pressed vegetable oils, could adversely affect brand recognition and demand. The Company may not be able to hire and retain qualified personnel to support its growth, and the loss of key personnel like Gary Seaton could materially affect business operations . The retail price of products may be subject to government control, potentially lowering profit levels. Adverse publicity related to products, raw materials, or suppliers/customers could harm reputation and financial results. The Company may not be able to develop new products successfully, impacting future growth. Operations are subject to disruptions from maintenance, extreme weather, raw material supply issues, or equipment failures. Improper disclosure or loss of sensitive data due to cyberattacks or other breaches could harm reputation and lead to legal liability. Geopolitical risks, including those affecting supply chains and inflation, could negatively impact international sales and financial conditions. The Company has a history of net losses, reporting AUD$(21,230,681) for fiscal year 2024 , and may not achieve or maintain profitability. The Company received a letter from Nasdaq on August 28, 2024, notifying it of non-compliance with the minimum bid price requirement of $1 per share , and while it has 180 calendar days to regain compliance, there is no assurance it will succeed.

Management Priorities

Management's message to shareholders emphasizes the Company's commitment to the manufacture and sale of chemical-free, non-GMO, sustainable edible oils and products derived from oilseeds, aligning with a vision of transitioning to a renewable and chemical-free economy. They highlight the Company's growth over the past 20 years to become the largest cold-pressing oil plant in Australia, processing strictly GMO-free conventional and organic oilseeds. 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 per annum, and establishing a new multi-seed crushing plant at Emerald, Queensland, with a projected capacity of 80,000 metric tons per annum . This expansion is intended to position 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 Supermarkets, and the development of new SKUs for the retail market. The Company's ability to continue as a going concern is dependent on generating sufficient cash from operations and securing additional long-term debt from 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 , 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 — Gross profit
  10. [10] Item 7, MD&A — Operating profit
  11. [11] Item 7, MD&A — (Loss) Profit for the year
  12. [12] Item 7, MD&A — (Loss) Profit for the year
  13. [13] Item 8, Note 25 — Basic (loss) earnings per share (cents)
  14. [14] Item 8, Note 25 — Basic (loss) earnings per share (cents)
  15. [15] Item 8, Note 5 — Cash at bank and in hand
  16. [16] Item 8, Consolidated Statement of Financial Position — TOTAL CURRENT LIABILITIES
  17. [17] Item 8, Consolidated Statement of Financial Position — TOTAL NON-CURRENT LIABILITIES
  18. [18] Item 8, Note 12 — Total Borrowings
  19. [19] Item 7, MD&A — Net cash provided by/ (used in) operating activities
  20. [20] Item 7, MD&A — Revenue
  21. [21] Item 7, MD&A — Revenue
  22. [22] Item 7, MD&A — Revenue
  23. [23] Item 7, MD&A — Gross profit
  24. [24] Item 7, MD&A — General and administrative expenses
  25. [25] Item 7, MD&A — General and administrative expenses
  26. [26] Item 7, MD&A — Marketing expenses
  27. [27] Item 7, MD&A — Finance expenses
  28. [28] Item 7, MD&A — Recapitalization expense
  29. [29] Item 1, Business — Recent Developments
  30. [30] Item 7, MD&A — Revenue
  31. [31] Item 8, Note 22 — Good Earth Oils Pty Ltd.
  32. [32] Item 1, Business — Facilities and Expansion
  33. [33] Item 1, Business — The Business Opportunity
  34. [34] Item 1, Business — The Company's Products and Strategy
  35. [35] Item 1, Business — Facilities and Expansion
  36. [36] Item 1, Business — Facilities and Expansion
  37. [37] Item 1, Business — Facilities and Expansion
  38. [38] Item 1, Business — Facilities and Expansion
  39. [39] Item 7, MD&A — Liquidity and Capital Resources
  40. [40] Item 7, MD&A — Liquidity and Capital Resources
  41. [41] Item 1, Business — Facilities and Expansion
  42. [42] Item 1, Business — Facilities and Expansion
  43. [43] Item 1, Business — Facilities and Expansion
  44. [44] Item 1A, Risk Factors — We are significantly dependent on the revenues from the sale of our products and, therefore, our results of operations could be negatively impacted if we are unable to sell a sufficient number of products at satisfactory margins.
  45. [45] Item 1A, Risk Factors — We are dependent on contracts with local and regional farmers for oilseeds and loss of these contracts could have a material adverse effect on our business, financial condition and revenues.
  46. [46] Item 8, Note 3 — Concentration of Key Customers
  47. [47] Item 1A, Risk Factors — The Company faces risks related to global, federal, state, and local regulation affecting its operations, including changes to and the imposition of new practices and regulations on trade restrictions, food safety regulations, sustainability requirements, traceability, environmental laws and other matters, which could materially and adversely affect its business, results of operations and financial condition.
  48. [48] Item 1A, Risk Factors — Our operations are inherently subject to changing conditions that can affect our profitability, such as a decrease in sales of our products and unfavorable weather and environmental conditions.
  49. [49] Item 1A, Risk Factors — Our revenue may not achieve budget in FY 2025 while we expend capital to expand our Cootamundra facility and construct our new Queensland facility.
  50. [50] Item 1A, Risk Factors — Our revenue may not achieve budget in FY 2025 while we expend capital to expand our Cootamundra facility and construct our new Queensland facility.
  51. [51] Item 1A, Risk Factors — We are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations.
  52. [52] Item 1A, Risk Factors — We have a history of net losses, we may increase expenses in the future, and we may not be able to achieve or maintain profitability.
  53. [53] Item 1A, Risk Factors — We are currently listed on The Nasdaq Stock Market ("Nasdaq"). If we are unable to maintain listing of our securities on Nasdaq or any stock exchange, our stock price could be adversely affected and the liquidity of our stock and our ability to obtain financing could be impaired and it may be more difficult for our shareholders to sell their securities.
  54. [54] Item 1, Business — The Company's Products and Strategy
  55. [55] Item 7, MD&A — Liquidity and Capital Resources
  56. [56] Item 7, MD&A — Liquidity and Capital Resources

Analysis on 5/20/2026