Australian Oilseeds Holdings Ltd 10-Q for FY2025 Q2
Australian Oilseeds Holdings Ltd (COOT)
About this 10-Q
Australian Oilseeds Holdings Ltd filed this 10-Q on March 31, 2025, covering the quarter ended December 31, 2024 (FY2025 Q2).
Headline figures
Quarter ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- 10.4M AUD
- up 4.5% from 9.95M AUD a year earlier
- Net loss
- 328.3K AUD
- compared with net income of 735.67K AUD a year earlier
- Diluted EPS
- -0.01 AUD
- compared with 0.04 AUD a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended:
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | ||
| Smaller
reporting company | |||
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of March 28, 2025, there were ordinary shares of the registrant issued and outstanding.
AUSTRALIAN OILSEEDS HOLDINGS LTD.
Quarterly Report on Form 10-Q
Period Ended December 31, 2024
TABLE OF CONTENTS
| Page | ||
| PART I FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | |
| Unaudited Condensed Consolidated Statements of Financial Position | 1 | |
| Unaudited Condensed Consolidated Statements of Profit or (loss) and other Comprehensive Income /(Loss) | 2 | |
| Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity | 3 | |
| Unaudited Condensed Consolidated Statements of Cash Flows | 4 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | 5 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 32 |
| Item 4. | Controls and Procedures | 32 |
| PART II OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 33 |
| Item 1A. | Risk Factors | 33 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 33 |
| Item 3. | Defaults Upon Senior Securities | 33 |
| Item 4. | Mine Safety Disclosures | 33 |
| Item 5. | Other Information | 33 |
| Item 6. | Exhibits | 33 |
| i |
AUSTRALIAN OILSEEDS HOLDINGS LTD.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024 AND 30 JUNE 2024
| Note | 31 December 2024 | 30 June 2024 | ||||||||
| AUD$ | AUD$ | |||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | ||||||||||
| Trade and other receivables | 3 | |||||||||
| Inventories | 4 | |||||||||
| Other current assets | 6 | |||||||||
| TOTAL CURRENT ASSETS | ||||||||||
| NON-CURRENT ASSETS | ||||||||||
| Property, plant and equipment | 5 | |||||||||
| Right-of-use asset | 11 | |||||||||
| Other assets | 6 | |||||||||
| Deferred tax assets | ||||||||||
| Intangible assets | ||||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||||
| TOTAL ASSETS | ||||||||||
| LIABILITIES | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Trade and other payables | 7 | |||||||||
| Borrowings | 8 | |||||||||
| Lease liability, current | 11 | |||||||||
| Income Tax liabilities | ||||||||||
| Related party loans | 21 | |||||||||
| Convertible note, net of discount | 8 | |||||||||
| Warrant liabilities | 10,22 | |||||||||
| Promissory note – related party, current | 21 | |||||||||
| Employee benefits | ||||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||
| NON-CURRENT LIABILITIES | ||||||||||
| Borrowings | 8 | |||||||||
| Promissory note - related party, non-current | 21 | |||||||||
| Lease liability, non-current | 11 | |||||||||
| Related party loans | 21 | |||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||||
| TOTAL LIABILITIES | ||||||||||
| NET (LIABILITIES)/ASSET | ( | ) | ||||||||
| EQUITY | ||||||||||
| Share capital | 9 | |||||||||
| Share premium | 9 | |||||||||
| Accumulated losses | ( | ) | ( | ) | ||||||
| Total deficit attributable to equity holders of the Company | ( | ) | ( | ) | ||||||
| Non-controlling interest | ||||||||||
| TOTAL (DEFICIT)/EQUITY | ( | ) | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 1 |
AUSTRALIAN OILSEEDS HOLDINGS LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR (LOSS) AND OTHER COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS AND SIX MONTHS ENDED 31 DECEMBER 2024 AND 31 DECEMBER 2023
| Note | THREE MONTHS ENDED DEC 2024 | THREE MONTHS ENDED DEC 2023 | SIX MONTHS ENDED DEC 2024 | SIX MONTHS ENDED DEC 2023 | ||||||||||||||
| AUD$ | AUD$ | AUD$ | AUD$ | |||||||||||||||
| Sales revenue | 12 | |||||||||||||||||
| Cost of sales | 13 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Gross profit | ||||||||||||||||||
| General and administrative expenses | 14 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Selling and marketing expenses | 15 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Other income | 16 | |||||||||||||||||
| Operating (loss)/profit | ( | ) | ||||||||||||||||
| Finance expenses | 18 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| (Loss) Profit before income tax | ( | ) | ( | ) | ||||||||||||||
| Income tax expense | ||||||||||||||||||
| (Loss) Profit for the period | ( | ) | ( | ) | ||||||||||||||
| Other comprehensive income for the period, net of tax | ||||||||||||||||||
| Total comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||||
| (Loss) Profit attributable to: | ||||||||||||||||||
| Members of the parent entity | ( | ) | ( | ) | ||||||||||||||
| Non-controlling interest | ( | ) | ||||||||||||||||
| Total (Loss) Income | ( | ) | ( | ) | ||||||||||||||
| (Loss) Profit for the period | ( | ) | ( | ) | ||||||||||||||
| Total comprehensive (loss) income attributable to: | ||||||||||||||||||
| Members of the parent entity | ( | ) | ( | ) | ||||||||||||||
| Non-controlling interest | ( | ) | ||||||||||||||||
| Total | ( | ) | ( | ) | ||||||||||||||
| Total comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||||
| (Loss) Earnings per share attributable to the ordinary equity holders of the parent | ||||||||||||||||||
| Profit or loss | ||||||||||||||||||
| Basic (loss) earnings per share (cents) | 19 | ( | ) | ( | ) | |||||||||||||
| Diluted (loss) earnings per share (cents) | 19 | ( | ) | ( | ) | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 2 |
AUSTRALIAN OILSEEDS HOLDINGS LTD.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE AND SIX MONTHS ENDED 31 DECEMBER 2024 AND 31 DECEMBER 2023
| Shares | Share | Accumulated | Non-controlling | |||||||||||||||||||
| Note | Capital | Premium | Losses | Interests | Total | |||||||||||||||||
| AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | ||||||||||||||||||
| Balance on 30 June 2024 | ( | ) | ||||||||||||||||||||
| Loss for the period attributable to members of the parent entity | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Balance on 30 September 2024 | ( | ) | ||||||||||||||||||||
| (Loss) profit for the period attributable to members of the parent entity | ( | ) | ( | ) | ||||||||||||||||||
| Balance on 31 December 2024 | ( | ) | ( | ) | ||||||||||||||||||
| Shares | Share | Retained | Non-controlling | |||||||||||||||||||
| Note | Capital | Premium | Earnings | Interests | Total | |||||||||||||||||
| AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | ||||||||||||||||||
| Balance on 30 June 2023, restated | ||||||||||||||||||||||
| Profit for the period attributable to members of the parent entity | ||||||||||||||||||||||
| Balance on 30 September 2023 | ||||||||||||||||||||||
| Balance | ||||||||||||||||||||||
| Profit for the period attributable to members of the parent entity | ||||||||||||||||||||||
| (Loss) profit for the period attributable to members of the parent entity | ||||||||||||||||||||||
| Balance on 31 December 2023 | ||||||||||||||||||||||
| Balance | ||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 3 |
AUSTRALIAN OILSEEDS HOLDINGS LTD.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024 AND 31 DECEMBER 2023
| Note | 2024 | 2023 | ||||||||
| AUD$ | AUD$ | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
| Receipts from customers | ||||||||||
| Payments to suppliers and employees | ( | ) | ( | ) | ||||||
| Tax Refund received/Income tax paid | ( | ) | ( | ) | ||||||
| Interest paid | ( | ) | ( | ) | ||||||
| Net cash (used in) operating activities | 20 | ( | ) | ( | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||||
| Net cash (used in) investing activities | ( | ) | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| Proceeds from related parties’ loans | ||||||||||
| Proceeds from secured borrowings | ||||||||||
| Repayment of secured borrowings | ( | ) | ( | ) | ||||||
| Repayment of lease liability | ( | ) | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||||
| Net (decrease)/increase in cash and cash equivalents held | ||||||||||
| Cash and cash equivalents at beginning of period | ||||||||||
| Cash and cash equivalents at the end of December period | ||||||||||
| 4 |
AUSTRALIAN OILSEEDS HOLDINGS LTD.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Establishment and Operations
Australian Oilseeds Holdings Limited (“Australian Oilseeds” or the “Company”) is a Cayman Islands exempted company that, directly and indirectly through its subsidiaries, is focused on the manufacture and sale of chemical free, non-GMO, sustainable edible oils and products derived from oilseeds. The Company believes that transitioning from a fossil fuel economy to a renewable and chemical free economy is the solution to many health problems the world is facing presently. To that end, the Company is committed to working with suppliers and customers to eliminate chemicals from the edible oil production and manufacturing systems to supply quality products such as non-GMO oilseeds and organic and non-organic food-grade oils to customers globally. Over the past 20 years, Australian Oilseeds Investments Pty Ltd., an Australian proprietary company (“AOI”) has grown to be the largest cold pressing oil plant in Australia, pressing strictly GMO free conventional and organic oilseeds.
The main business activities include the mill of GMO free conventional and organic oilseeds to produce vegetable oils and related products to wholesale and retail market.
The material accounting policies adopted in the preparation of the consolidated financial statements are set out in Note 2. The policies have been consistently applied to all the years presented, unless otherwise stated.
The condensed consolidated financial statements are presented in AUD, which is also the Company’s functional currency.
Amounts are rounded to the nearest dollar, unless otherwise stated.
These financial statements have been prepared in accordance with International Accounting Standards as issued by the International Accounting Standards Board (IASB) (collectively International Accounting Standards).
The preparation of financial statements in compliance with adopted International Accounting Standards requires the use of certain critical accounting estimates. It also requires Company management to exercise judgment in applying the Company’s accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 2.
Reverse Recapitalization
Australian Oilseeds Holdings Ltd (“PubCo”) was incorporated in Cayman Islands business company with limited liability and was formed for the purpose of participating in the transactions contemplated hereby and becoming the publicly traded holding company for the surviving corporation.
EDOC Acquisition Corp (“EDOC” or “SPAC”) is a Cayman Islands exempted company formerly listed on the NASDAQ Stock Market under “ADOC”. EDOC has limited operations but is established as a public investment vehicle that has the express purpose of making an investment in an operating company.
On March 21, 2024 (the “Closing Date”), the Company consummated the previously announced Business Combination (defined below). The Business Combination was announced on December 7, 2022, where AOI, PubCo, and EDOC entered into a business combination agreement (“Business Combination Agreement”), pursuant to which, (a) EDOC merged with and into Merger Sub, with EDOC continuing as the surviving entity (the “Merger”), and with holders of EDOC securities receiving substantially identical securities of Pubco, and (b) immediately prior to the Merger, Pubco acquired all of the issued and outstanding ordinary shares of AOI (the “Purchased Shares”) from the Sellers in exchange for ordinary shares of Pubco, with AOI became a wholly-owned subsidiary of Pubco (the “Share Exchange”, and together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Transactions”).
The
total consideration paid by Pubco to the sellers for the purchased shares was an aggregate number of Pubco ordinary shares (the “Exchange
Shares”) with an aggregate value (the “Exchange Consideration”) equal to, without duplication, (i) USD$
The Merger was consummated on March 21, 2024, and the Share Exchange and Business Combination were consummated on the Closing Date. Pursuant to the Business Combination Agreement, upon the consummation of the Business Combination at the effective time of the Business Combination (the “Effective Time”):
| ● | each holder of EDOC pre-transaction privately-held Class A ordinary shares and the Class B ordinary share (the “EDOC Ordinary Shares”) received a number of Company Ordinary Shares, which are listed under the ticker “COOT” (less Class A ordinary shares that were forfeited to the Company; | |
| ● | each holder of AOI ordinary shares received Company Ordinary Shares on a one-for-one basis (the “Exchange Shares”); | |
| ● | each holder of EDOC’s public Class A ordinary shares received Company Ordinary Shares on a one-for-one basis; | |
| ● | EDOC’s warrants terminated and were exchanged for warrants of the Company (the “Warrants”), which Warrants are listed on the Nasdaq under “COOTW”; |
| 5 |
| ● | each holder of EDOC’s rights (the “Rights”) received 1/10 of a Company Ordinary Share for each such Right, as set forth herein; | |
| ● | EDOC’s Rights will no longer be traded; | |
| ● | EDOC’s placement units (“Placement Units”) were exchanged for Company Ordinary Shares and Warrants of the Company; and | |
| ● | EDOC’s USD$ of convertible promissory notes that were convertible at Closing into Company Ordinary Shares (“Convertible Shares”) and warrants (“Convertible Warrants”). |
On March 22, 2024, the Ordinary Shares and PubCo Warrants commenced trading on the Nasdaq Capital Market (“Nasdaq”) under the symbols “COOT” and “COOTW,” respectively.
2. Summary of Material Accounting Policies
(a) Unaudited Interim Financial Information
The accompanying condensed consolidated statement of financial position as of 31 December 2024, and the condensed consolidated statements of profit or loss and other comprehensive income (loss), changes in equity and cash flows for the three and six months ended 31 December 2024 and 2023 are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with International Accounting Standards have been omitted pursuant to those rules or regulations. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position as of 31 December 2024 and the results of operations and cash flows for the six months ended 31 December 2024 and 2023. The results of operations for the three and six months ended 31 December 2024 are not necessarily indicative of the results to be expected for the year ending 30 June 2025 or for any other interim period or other future year. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K/A for the fiscal year ended 30 June 2024.
(b) Basis of consolidation
Australian
Oilseeds Holdings Ltd. is a Cayman Islands exempted company (the “Company,” “we,” “us” or “Australian
Oilseeds”) formed on December 29, 2022. The Company’s subsidiaries include Australian Oilseeds Investments Pty Ltd., an Australian
proprietary company; Good Earth Oils Pty Ltd. an Australian proprietary company; Cowcumbla Investments Pty Ltd., an Australian proprietary
company, which is
The Company’s financial statements comprise the financial statements of the Company and its subsidiaries as of December 31, each year. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting year as the parent Company, using consistent accounting policies. Intra-company balances and transactions, including unrealized profits arising from intra-company transactions, have been eliminated. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Non-controlling interests represent the equity in subsidiaries that is not attributable, directly or indirectly, to the Parent shareholders.
Details of subsidiaries as of 31 December 2024 and 30 June 2024 were as follows:
Schedule of Subsidiaries
| Subsidiaries | % of legal ownership 31 Dec 2024 | % of legal ownership 30 Jun 2024 | Country of Incorporation | Principal business activities | ||||||||
| Australian Oilseeds Pty Ltd. | % | % | ||||||||||
| Cootamundra Oilseeds Pty Ltd. | % | % | ||||||||||
| Cowcumbla Investments Pty Ltd. | % | % | ||||||||||
| Good Earth Oils Pty Ltd. | % | % | ||||||||||
| EDOC Acquisition Limited | % | % | ||||||||||
The carrying amount of the Company’s investment in the subsidiary and the equity of the subsidiary is eliminated on consolidation.
(c) Substantial doubt regarding Going Concern
The
Company incurred a loss after income tax for 3 months ended 31 December 2024 of AUD$
| 6 |
As
of 31 December 2024, the consolidated entity had cash in hand and at bank of AUD$
The above factors raise substantial doubt about the Group’s ability to continue as a going concern unless it can successfully meet the stated objectives and/or raise additional funds with its financiers and investors.
As at 31 December 2024, all banking covenants associated with the borrowings from the Commonwealth Bank of Australia were in compliance. There are two covenants being:
| ● | The interest cover ratio in respect of the obligor must for each reporting period be no less than 2.50 times; and | |
| ● | The net working capital ratio must at all times be more than 80%. |
Company’s
ability to continue its business activities as a going concern is dependent upon the Company deriving sufficient cash from the business
operation and being able to draw down additional long-term debt from the senior debt provider, CBA, who has provided a total facility
loan of AUD$
Accordingly, the directors have prepared the financial statements on a going concern basis which contemplates continuity of normal activities and realization of assets and settlement of liabilities in the normal course of business.
Should the Company be unable to obtain funding from banks or other financiers, PIPE investors or fail to execute the ELOC, the Company may be required to realize its assets and discharge its liabilities other than in normal course of business and at amounts different to those stated in these financial statements. The financial statements do not include any adjustments to the recoverability and classification of asset carrying amounts or amounts of liabilities that might result should the Company be unable to continue as a going concern.
(d) Financial instruments
Financial instruments are recognised initially on the date that the Company becomes party to the contractual provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).
Concentration of Key Customers
A
substantial portion of the Company’s products are sold to its top five customers. For the three months ending 31 December 2024
and 2023,
Schedule of Total Sales From Each Customer
| Unaudited Total Sales for The Three Months Ended | Unaudited Total Sales for The Six Months Ended | Outstanding Balance of Trade Receivables as at | ||||||||||
| 31 December 2024 | 31 December 2024 | 31 December 2024 | ||||||||||
| Customer | AUD$ | AUD$ | AUD$ | |||||||||
| Costco Wholesale Australia | ||||||||||||
| Energreen Nutrition Australia Pty Ltd. | ||||||||||||
| Daabon Organic Australia & Daabon Japan Pty Ltd. | ||||||||||||
| Rivalea (Australia) Pty Ltd. – Animal Nutrition | ||||||||||||
| Woolworths | ||||||||||||
| 7 |
Total
Sales for | Total
Sales for | Outstanding | ||||||||||
| Customer | AUD$ | AUD$ | AUD$ | |||||||||
| Energreen Nutrition Australia Pty Ltd. | ||||||||||||
| Daabon Organic Australia & Daabon Japan Pty Ltd. | ||||||||||||
| Costco Wholesale Australia | ||||||||||||
| Daabon Organic Australia Pty Ltd. | ||||||||||||
| Hygain NSW (Proprietary) Limited | ||||||||||||
| Total Sales | 482,525 | |||||||||||
If the sales performance of any of the Company’s key customers declines or if they terminate their cooperation with us or start to cooperate with any of the Company’s competitors, or if there is any modification as to the sales and purchase terms entered into with any of our key customers, our business, financial condition and revenue would be seriously impacted.
Impairment of financial assets
Impairment of financial assets is recognised on an expected credit loss (ECL) basis for the following assets:
| ● | financial assets measured at amortised cost; and | |
| ● | debt investments measured at FVOCI. |
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment and including forward-looking information.
The Company uses the presumption that an asset which is more than 30 days past due has seen a significant increase in credit risk.
The Company uses the presumption that a financial asset is in default when:
| ● | the other party is unlikely to pay its credit obligations to the Company in full, without recourse to the Company to actions such as realising security (if any is held); or | |
| ● | the financial assets is more than 90 days past due. |
Credit losses are measured as the present value of the difference between the cash flows due to the Company in accordance with the contract and the cash flows expected to be received. This is applied using a probability weighted approach.
Trade receivables and contract assets
Impairment of trade receivables and contract assets have been determined using the simplified approach in IFRS 9 which uses an estimation of lifetime expected credit losses. The Company has determined the probability of non-payment of the receivable and contract assets and multiplied this by the amount of the expected loss arising from default.
The amount of the impairment is recorded in a separate allowance account with the loss being recognised in finance expense. Once the receivable is determined to be uncollectable then the gross carrying amount is written off against the associated allowance.
Where the Company renegotiates the terms of trade receivables due from certain customers, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in profit or loss.
Other financial assets measured at amortised cost
Impairment of other financial assets measured at amortised cost are determined using the expected credit loss model in IFRS 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12 months is recognised. Where the asset has experienced significant increase in credit risk then the lifetime losses are estimated and recognised.
Financial liabilities
The Company measures all financial liabilities initially at fair value less transaction costs, subsequently financial liabilities are measured at amortised cost using the effective interest rate method.
The financial liabilities of the Company comprise trade payables, bank and other loans, lease liabilities, and financial instruments.
Financial instruments were reviewed at Quarter end and there were no material changes in their fair values noted between balance dates.
| 8 |
(e) Impairment of non-financial assets
At the end of each reporting period the Company determines whether there is evidence of an impairment indicator for non-financial assets.
Where an indicator exists and regardless of goodwill, indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated.
Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value, less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.
(f) Intangible assets
Goodwill
Goodwill is carried at cost less accumulated impairment losses.
The
value of goodwill recognised on the acquisition of each subsidiary in which the Company holds less than
Under the ‘full goodwill method’, the fair values of the non-controlling interests are determined using valuation techniques which make the maximum use of market information where available.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is not amortised but is tested for impairment annually at the end of financial year and is allocated to the Company’s cash generating units or groups of cash generating units, which represent the lowest level at which goodwill is monitored but where such a level is not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold.
(g) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
(h) Employee benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits expected to be settled more than one year after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on high quality corporate bond rates incorporating bonds rated AAA or AA by credit agencies, with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.
(i) Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result, and that outflow can be reliably measured.
Provisions are measured at the present value of management’s best estimate of the outflow required to settle the obligation at the end of the reporting period. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the unwinding of the discount is taken to finance costs in the consolidated statement of profit or loss and other comprehensive income.
(j) Convertible Promissory Note
Convertible notes are presented as a financial liability in the consolidated statement of financial position. On issuance of the convertible notes, the liability is measured at fair value, and subsequently carried at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. Convertible notes are classified as current liabilities based on the expected conversion date in accordance with the convertible note’s agreements.
| 9 |
(k) Derivative warrant liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to IAS 32 and IFRS 9. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The
Company accounts for its
The
Company accounts for its
(l) Embedded Derivatives
A derivative embedded in a hybrid contract is separated from the host and accounted for as a separate derivative if, the economic characteristics and risks are not closely related to the host, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.
(m) Segment Reporting
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates as one operating segment.
(n) New and amended standards and interpretations
i) New standards, amendments to published approved accounting and reporting standards and interpretations which are effective during the year
The Company has applied the following standards and amendments for the first time for its annual reporting for the period commencing 1 July 2024:
| ● | Definition of Accounting Estimates - amendments to IAS 8 |
| ● | International Tax Reform - Pillar Two Model Rules - amendments to IAS |
| ● | Deferred Tax related to Assets and Liabilities arising from a Single Transaction - amendments to IAS 12 |
| ● | Disclosure of Accounting Policies - Amendments to IAS 1 and International Accounting Standards Practice Statement 2 |
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
ii) Standards, amendments to published standards and interpretations that are not yet effective and have not been early adopted by the Company
| ● | Amendments to International Accounting Standards 10 and International Accounting Standards 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
| ● | Amendments to International Accounting Standards 1 - Classification of Liabilities as Current or Non-current |
| ● | Amendments to International Accounting Standards 7 and International Accounting Standards 7 - Supplier Finance Arrangements |
| ● | Amendments to International Accounting Standards 16 - Lease Liability in a Sale and Leaseback |
| ● | Amendments to International Accounting Standards 18 – Presentation and Disclosure in Financial Statements |
The amendments listed above have been published but are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the Company. These amendments are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.
| 10 |
3. Trade and Other Receivables
Schedule of Trade and Other Receivables
Unaudited 31 December 2024 | 30 June 2024 | |||||||
| AUD$ | AUD$ | |||||||
| CURRENT | ||||||||
| Related party-Loans Note 21 | ||||||||
| Trade receivables- Related parties Note 21 | ||||||||
| Trade receivables, net (1) | ||||||||
| Total current trade and other receivables | ||||||||
| (1) |
The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements.
The table below presents the expected credit losses on trade receivables for the six months ended 31 December 2024:
Schedule of Expected Credit Losses on Trade Receivables
| Current sales | [30] days | [60] days | [90] days and older | Total | ||||||||||||||||
| Unaudited | ||||||||||||||||||||
| Current sales | 30 days | 60 days | 90 days and older | Total | ||||||||||||||||
| Balance as at reporting date | $ | $ | $ | $ | $ | |||||||||||||||
| Expected loss rate | % | % | % | % | ||||||||||||||||
| ECL allowance | $ | $ | $ | $ | $ | |||||||||||||||
The table below presents the expected credit losses on trade receivables for the year ended 30 June 2024:
| Current sales | 30 days | 60 days | 90 days | Total | ||||||||||||||||
| Balance as at reporting date | $ | $ | $ | $ | $ | |||||||||||||||
| Expected loss rate | % | % | % | % | ||||||||||||||||
| ECL allowance | $ | $ | $ | $ | $ | |||||||||||||||
4. Inventories
Schedule of Inventories
Unaudited 31 December 2024 | 30 June 2024 | |||||||
| AUD$ | AUD$ | |||||||
| CURRENT | ||||||||
| Raw materials and consumables | ||||||||
| Finished Goods | ||||||||
| Consumables | ||||||||
| Total inventories | ||||||||
5. Property, plant and equipment
Schedule of Property Plant and Equipment
Unaudited 31 December 2024 | 30 June 2024 | |||||||
| AUD$ | AUD$ | |||||||
| LAND AND BUILDINGS | ||||||||
| Freehold land | ||||||||
| At cost | ||||||||
| Total Land | ||||||||
| Buildings | ||||||||
| At cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total buildings | ||||||||
| Total land and buildings | ||||||||
| PLANT AND EQUIPMENT | ||||||||
| Plant and equipment | ||||||||
| At cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total plant and equipment | ||||||||
| Motor vehicles | ||||||||
| At cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total motor vehicles | ||||||||
| Office equipment | ||||||||
| At cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total office equipment | ||||||||
| Total plant and equipment | ||||||||
| Total property, plant and equipment | ||||||||
| 11 |
| (a) | Movements in carrying amounts of property, plant and equipment |
Movement in the carrying amounts for each class of property, plant and equipment for the six months ended 31 December 2024 and for the year ended 30 June 2024:
Schedule of Detailed Information About Property Plant and Equipment
| Plant and | Motor | Office | ||||||||||||||||||||||
| Land | Buildings | Equipment | Vehicles | Equipment | Total | |||||||||||||||||||
| AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | |||||||||||||||||||
| Six Months Ended 31 December 2024 | ||||||||||||||||||||||||
| Balance at 30 June 2024 | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Reclass | ( | ) | ||||||||||||||||||||||
| Depreciation expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance at 31 December 2024 | ||||||||||||||||||||||||
| Land | Buildings | Plant and Equipment | Motor Vehicles | Office Equipment | Total | |||||||||||||||||||
| AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | |||||||||||||||||||
| Year ended 30 June 2024 | ||||||||||||||||||||||||
| Balance at 30 June 2023 | ||||||||||||||||||||||||
| Beginning balance | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Reclassification | ( | ) | ( | ) | ||||||||||||||||||||
| Depreciation expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance at 30 June 2024 | ||||||||||||||||||||||||
| Ending balance | ||||||||||||||||||||||||
6 Other assets
Schedule of Other Non Financial Assets
Unaudited 31 December 2024 | 30 June 2024 | |||||||
| AUD$ | AUD$ | |||||||
| CURRENT | ||||||||
| Prepayments | ||||||||
| Tax recoverable | ||||||||
| Other current assets | ||||||||
| Total non-financial assets | ||||||||
| 31 December 2024 | 30 June 2024 | |||||||
| AUD$ | AUD$ | |||||||
| NON-CURRENT | ||||||||
| Prepayment of equipment | ||||||||
7. Trade and Other Payables
Schedule of Trade Payables
Unaudited 31 December 2024 | 30 June 2024 | |||||||
| AUD$ | AUD$ | |||||||
| CURRENT | ||||||||
| Related parties – payable Note 21 | ||||||||
| Trade payables | ||||||||
| Total trade and other payables | ||||||||
| 12 |
Trade and other payables including related party payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances.
8. Borrowings
Secured bank loan
In
Feb 2024, the Company obtained an AUD$
On
February 14, 2024, the Company issued a note for an equipment loan to the Commonwealth Bank of Australia in an aggregate principal amount
of AUD$
Convertible Note
In
connection with the closing of the Business Combination, the Company closed the private placement, pursuant to the private offering rules
under the Securities Act of 1933, as amended (the “Securities Act”), of the Arena Warrants and Debentures pursuant to the
Securities Purchase Agreement dated August 23, 2023 between the Company, AOI, EDOC, certain AOI subsidiaries and Arena Investors, LP
(the “PIPE Investors”) and executed the Arena Transaction Documents including the
On February 29, 2024, the Company entered into Amendment No.3 to the Securities Purchase Agreement for the purchase and sale of Debentures and Warrants.
The following table summarizes outstanding borrowings as of 31 December 2024 and 30 June 2024:
Schedule of Borrowings
| Current | Non-Current | Total | Current | Non-Current | Total | |||||||||||||||||||
Unaudited 31 December 2024 | 30 June 2024 | |||||||||||||||||||||||
| AUD$ | AUD$ | |||||||||||||||||||||||
| Current | Non-Current | Total | Current | Non-Current | Total | |||||||||||||||||||
| Equipment Finance secured bank loan | ||||||||||||||||||||||||
| Trade finance facility | ||||||||||||||||||||||||
| Interest only secured bank loan | ||||||||||||||||||||||||
| Total secured bank loan | ||||||||||||||||||||||||
| Convertible note, net of debt discount | ||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||
| 13 |
The future payments of the equipment finance secured bank loan as of 31 December 2024 were as follows:
Schedule of Future Payments of Finance Secured Bank Loan
| Calendar year | AUD$ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total payments outstanding | ||||
| Less: accrued interest | ( | ) | ||
| Total equipment finance secured loan outstanding | ||||
The following table summarizes the outstanding Convertible Note as of 31 December 2024 and 30 June 2024:
Schedule of Outstanding Convertible Note
| 31 December 2024 | 30 June 2024 | |||||||
| AUD$ | AUD$ | |||||||
| Principal value of Convertible Note | ||||||||
| Debt discount, net of amortization | ( | ) | ( | ) | ||||
| Convertible Note | ||||||||
9. Issued Capital
There have been no movements or changes in issued capital since 30 June 2024.
10. Warrants
The Company accounts for the Public warrants, the Private Placement warrants, the Representative warrants, the Penny warrants, and the Arena Ordinary share warrants in accordance with the guidance contained in IAS 32 and IFRS 9 under which the Public warrants meet the criteria for equity treatment and are recorded as equity due to the settlement provision in the warrant agreement. In accordance with IAS 32 and IFRS 9, the Private Placement warrants, Representative warrants, the Penny warrants and Arena Ordinary share warrants (collectively the “Warrants”) are initially required to be classified as liability instruments in its entirety; therefore, the Warrants are required to be measured at fair value at each reporting period with changes in fair value recorded within earnings.
The following table presents the warrants outstanding and exercisable on 31 December 2024 and 30 June 2024:
Schedule of Warrant Outstanding
| Public warrants | ||||
| Private Placement warrants | ||||
| Representative warrants | ||||
| Arena Ordinary share warrants | ||||
| Total warrants |
Public, Private, and Representative Warrants
As
part of EDOC’s IPO, EDOC issued warrants to third-party investors where each whole warrant entitles the holder to purchase one
share of the Company’s ordinary shares at an exercise price of USD$ per share (the “Public Warrants”). Simultaneously
with the closing of the IPO, EDOC completed the private sale of warrants where each warrant allows the holder to purchase one share of
the Company’s ordinary shares at USD$ per share. Additionally, the Company issued to the underwriters a warrant (“Representative’s
Warrant) to purchase up to
These warrants expire on the fifth anniversary of the Business Combination or earlier upon redemption or liquidation and are exercisable commencing 30 days after the Business Combination, provided that the Company has an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder.
The Company may call the warrants for redemption (excluding the private warrants, and any outstanding Representative’s Warrants, and any warrants underlying units issued to the Sponsor, initial shareholders, officers, directors or their affiliates in payment of Working Capital Loans made to the Company), in whole and not in part, at a price of USD$ per warrant:
| ● | at any time while the warrants are exercisable, | |
| ● | upon not less than 30 days’ prior written notice of redemption to each warrant holder, |
| 14 |
| ● | if, and only if, the reported last sale price of the Class A ordinary shares equals or exceeds $ per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30-trading day period ending on the third trading business day prior to the notice of redemption to warrant holders, and | |
| ● | if, and only if, there is a current registration statement in effect with respect to the issuance of the Class A ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day until the date of redemption. |
Arena Ordinary Share Warrants
In
connection with the closing of the Business Combination, the Company closed the private placement, pursuant to the private offering rules
under the Securities Act of 1933, as amended (the “Securities Act”), of the Arena Warrants and Debentures pursuant to the
Securities Purchase Agreement dated August 23, 2023 between the Company, AOI, EDOC, certain AOI subsidiaries and Arena Investors, LP
(the “PIPE Investors”) and executed the Arena Transaction Documents including the
Penny Warrants
In
connection with the Amendment No. 3 to the Securities Purchase Agreement the Company agrees that in the event that (w) the Company fails
to achieve the transfer of all of Energreen’s equity interests in CQ Oilseeds to the Company such that CQ Oilseeds becomes a wholly-owned
subsidiary of the Company on or prior to the Substantial Completion Date, (x) the Company fails to achieve the transfer of the Australian
Crushing Plant Lease from Energreen to CQ Oilseeds on or prior to the Substantial Completion Date, (y) CQ Oilseeds fails to grant to
the Purchaser a first priority security interest in all of its assets, free and clear of all other liens and encumbrances other than
the first priority security interests of the Purchaser pursuant to the Australian CQ Oilseeds General Security Deed and the Australian
Leasehold Mortgage on or prior to the Substantial Completion Date, on or prior to the Substantial Completion Date, and/or (z) any of
CQ Oilseeds, Energreen, the Company or the Company fails to comply with, or breaches any of the covenants in any Transaction Document,
then (i) the Company shall issue to the
11. Lease liabilities and right-of-use assets
The Company’s leases include rental of a solar power system and plant space.
Lease liabilities are secured by the related leased assets.
Solar power system lease
The solar power system lease has a term commencing on October 31, 2015 through October 31, 2035.
Land lease
The Company leases land in Cootamundra, Australia, where the oilseed processing plant and ancillary buildings accommodating the equipment and facilities are located. The Cootamundra land lease has a term commencing on January 1, 2023 through December 31, 2025. Balances of the right-of use assets and lease liabilities are set forth on the accompanying statement of financial position.
The following table shows the remaining contractual maturities of the Company’s lease liabilities and the right-of-use assets as of 31 December 2024 and 30 June 2024:
Schedule of Contractual Maturities Lease Liabilities and Right of Use Assets
| Right-of-use assets | Unaudited 31 December 2024 | 30 June 2024 | ||||||
| At cost | $ | $ | ||||||
| Less accumulated amortisation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
| 15 |
| 31 December 2024 | 30 June 2024 | |||||||
| Lease liabilities | ||||||||
| Within 1 year (Current) | $ | $ | ||||||
| After 1 year but within 2 years | ||||||||
| After 2 years but within 5 years | ||||||||
| After 5 years | ||||||||
| Non-current | ||||||||
| Total | $ | $ | ||||||
12. Revenue
The Company derives its revenue principally from wholesale and retail sales of chemical free, non-GMO, sustainable edible oils and products derived from oilseeds. The Company derives revenue from the transfer of goods at a point in time. The table below shows the Company’s revenue disaggregated by product type.
Schedule of Revenue Disaggregated
| 2024 | 2023 | |||||||
| Three Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Wholesale oils | $ | $ | ||||||
| High protein meals | ||||||||
| Other sales | ||||||||
| Retail oils | ||||||||
| Total revenues | $ | $ | ||||||
| 2024 | 2023 | |||||||
| Six Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Wholesale oils | $ | $ | ||||||
| High protein meals | ||||||||
| Toll crushing service | ||||||||
| Seeds | ||||||||
| Other sales | ||||||||
| Retail oils | ||||||||
| Total revenues | $ | $ | ||||||
13. Cost of Sales
Schedule of Cost of sales
| 2024 | 2023 | |||||||
| Three Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Cost of finished goods | $ | $ | ||||||
| Cost of material | ||||||||
| Direct labor | ||||||||
| Freight and storage | ||||||||
| Depreciation | ||||||||
| Occupancy costs | ||||||||
| Repairs and maintenance | ||||||||
| Total cost of sales | $ | $ | ||||||
| 2024 | 2023 | |||||||
| Six Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Cost of finished goods | $ | $ | ||||||
| Cost of material | ||||||||
| Direct labor | ||||||||
| Freight and storage | ||||||||
| Depreciation | ||||||||
| Occupancy costs | ||||||||
| Repairs and maintenance | ||||||||
| Total cost of sales | $ | $ | ||||||
| 16 |
14. General and administrative expenses
Schedule of General and Administrative expenses
| 2024 | 2023 | |||||||
| Three Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Professional fees | $ | $ | ||||||
| Audit fee | ||||||||
| Employee costs | ||||||||
| Insurance | ||||||||
| Other expenses | ||||||||
| Subscriptions and dues | ||||||||
| Management fee | ||||||||
| Travel expenses | ||||||||
| Depreciation | ||||||||
| Technology costs | ||||||||
| Occupancy costs | ||||||||
| Security | ||||||||
| Utilities | ||||||||
| Total general and administrative expenses | $ | $ | ||||||
| 2024 | 2023 | |||||||
| Six Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Professional fees | $ | $ | ||||||
| Audit fee | ||||||||
| Employee costs | ||||||||
| Insurance | ||||||||
| Other expenses | ||||||||
| Subscriptions and dues | ||||||||
| Management fee | ||||||||
| Travel expenses | ||||||||
| Depreciation | ||||||||
| Technology costs | ||||||||
| Occupancy costs | ||||||||
| Security | ||||||||
| Utilities | ||||||||
| Total general and administrative expenses | $ | $ | ||||||
| 17 |
15. Selling and marketing expenses
Schedule of Selling and Marketing expenses
| 2024 | 2023 | |||||||
| Three Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Professional fees | $ | $ | ||||||
| Bad debts | $ | $ | ||||||
| Advertising and marketing expenses | ||||||||
| Total selling and marketing expenses | $ | $ | ||||||
| 2024 | 2023 | |||||||
| Six Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Professional fees | $ | $ | ||||||
| Bad debts | $ | $ | ||||||
| Advertising and marketing expenses | ||||||||
| Total selling and marketing expenses | $ | $ | ||||||
16. Other Income
Schedule of Other Income
| 2024 | 2023 | |||||||
| Three Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Other income | $ | $ | ||||||
| Total other income | $ | $ | ||||||
| 2024 | 2023 | |||||||
| Six Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Other income | $ | $ | ||||||
| Total other income | $ | $ | ||||||
17. Key management personnel compensation
Key management personnel remuneration included within employee expenses for the three and six months ended 31 December 2024 and 2023 is shown below:
Schedule of Key Management Personnel
| 2024 | 2023 | |||||||
| Three Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Short-term employee benefits | $ | $ | ||||||
| Post-employment benefits | $ | $ | ||||||
| Total | $ | $ | ||||||
| 2024 | 2023 | |||||||
| Six Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Short-term employee benefits | $ | $ | ||||||
| Post-employment benefits | $ | $ | ||||||
| Total | $ | $ | ||||||
18. Finance Expenses
| 2024 | 2023 | |||||||
| Three Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Amortization of debt discount | ||||||||
| Realised and unrealised currency losses (gains) | ( | ) | ( | ) | ||||
| Interest expense | ||||||||
| Total finance expenses | ||||||||
| 18 |
| 2024 | 2023 | |||||||
| Six Months Ended 31 December | ||||||||
| 2024 | 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Amortization of debt discount | ||||||||
| Realised and unrealised currency losses (gains) | ( | ) | ( | ) | ||||
| Interest expense | ||||||||
| Total finance expenses | ||||||||
(a) Basic (loss) earnings per share
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Three Months Ended 31 December | Six Months Ended 31 December | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| AUD$ | AUD$ | |||||||||||||||
| Total basic (loss) earnings per share attributable to the ordinary equity holders of the company | ( | ) | ( | ) | ||||||||||||
(b) Diluted (loss) earnings per share
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Three Months Ended 31 December | Six Months Ended 31 December | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| AUD$ | AUD$ | |||||||||||||||
| Total diluted (loss) earnings per share attributable to the ordinary equity holders of the company | ( | ) | ( | ) | ||||||||||||
(c) Weighted average number of shares used as the denominator
| Three and Six Months Ended 31 December 2024 | Three and Six Months Ended 31 December 2023 | |||||||
| Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share | ||||||||
| Adjustments for calculation of diluted earnings per share: | - | - | ||||||
| Amounts uncalled on partly paid shares and calls in arrears | ||||||||
| Options | ||||||||
| Deferred shares | ||||||||
| Convertible notes | ||||||||
| Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share | ||||||||
20. Cash Flow Information
| (a) | Reconciliation of cash |
Cash for the six months ended 31 December 2024 and 2023 as shown in the consolidated statement of cash flows is reconciled to items in the consolidated statement of financial position as follows:
Schedule of Reconciliation of Cash
| 31 December 2024 | 31 December 2023 | |||||||
| AUD$ | AUD$ | |||||||
| Cash and cash equivalents | ||||||||
| (b) | Reconciliation of result for the year to cashflows from operating activities |
Reconciliation of net income to net cash provided by operating activities:
Schedule of Reconciliation of Net Income to Net Cash Provided by Operating Activities
| (Loss) Profit for the period | ( | ) | ||||||
| Non-cash flows in (loss) profit: | ||||||||
| – cash flows excluded from profit attributable to operating activities | ||||||||
| – depreciation | ||||||||
| -interest | ||||||||
| Changes in assets and liabilities: | ||||||||
| – (increase)/decrease in trade and other receivables | ( | ) | ( | ) | ||||
| – (increase)/decrease in other assets | ( | ) | ||||||
| – (increase)/decrease in inventories | ( | ) | ||||||
| – increase/(decrease) in trade and other payables | ( | ) | ( | ) | ||||
| – increase/(decrease) in provisions | ( | ) | ||||||
| Cash flows from/(used in) operations | ( | ) | ( | ) |
| 19 |
Non-cash investing and financing activities were as follows:
Schedule of Non-cash Investing and Financing Activities
| 31 December 2024 | 31 December 2023 | |||||||
| Intangible asset | ||||||||
| Accrued expenses and warrant liabilities assumed upon closing of the merger with EDOC | ||||||||
| Promissory note – related party assumed upon closing of the merger with EDOC | ||||||||
| Property Plant & Equipment (PPE) | ||||||||
| Prepayment for purchase of PPE in FY 2024 capitalised in Half year ended 31 December 2024 | ||||||||
| Payments made by related party for company’s accrued expenses | ||||||||
21. Related Parties
(a) The Company’s main related parties are as follows:
Key management personnel — refer to Note 17.
Other related parties include close family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel or their close family members and American Physicians, LLC, shareholders from the Sponsor of EDOC.
(b) Transactions with related parties.
The following transactions occurred with related parties:
For
the six months ended 31 December 2024 and the year ended 30 June 2024 a related party loan is owed to JSKS Enterprises Pty Ltd., which
is the trustee of Gary Seaton Family Trust, and interest rate charge is
For
the six months ended 31 December 2024 and the year ended 30 June 2024 a related party loan is owed to Energreen Nutrition Australia Pty
Ltd., which is controlled by Gary Seaton, and interest rate charge is
For the six months ended 31 December 2024 and the year ended 30 June 2024 the remaining related party loan relates to an interest free loan owed to CQ Oilseeds Pty Ltd.
Schedule of Transactions Occurred with Related Parties
| Purchases of Seed for the Three Months Ended 31 December 2024 | Purchases of Oils for the Three Months Ended 31 December 2024 | Sales of Meals for the Three Months Ended 31 December 2024 | Other Sales for the Three Months Ended 31 December 2024 | Management Fee for the Three Months Ended 31 December 2024 | Lease for the Three Months Ended 31 December 2024 | |||||||||||||||||||
| AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | |||||||||||||||||||
| Related parties | ||||||||||||||||||||||||
| Energreen Nutrition Australia Pty Ltd. | ||||||||||||||||||||||||
| Sunmania Pty Ltd. | ||||||||||||||||||||||||
| Purchases of Seed for the Six Months Ended 31 December 2024 | Purchases of Oils for the Six Months Ended 31 December 2024 | Sales of Meals for the Six Months Ended 31 December 2024 | Other Sales for the Six Months Ended 31 December 2024 | Management Fee for the Six Months Ended 31 December 2024 | Lease for the Six Months Ended 31 December 2024 | |||||||||||||||||||
| AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | AUD$ | |||||||||||||||||||
| Related parties | ||||||||||||||||||||||||
| Energreen Nutrition Australia Pty Ltd. | ||||||||||||||||||||||||
| Soon Soon Oilmills Sdn Bhd. * | ||||||||||||||||||||||||
| Sunmania Pty Ltd. | ||||||||||||||||||||||||
| 20 |
| * |
| (a) | Loans to/from related parties |
The current loans are payable on demand and the non-current loans have a maturity date which is more than 12 months from the date of 31 December 2024.
Schedule of Loans with Related Parties
| Current | Non-current | Total | ||||||||||
| Balance | ||||||||||||
| as of 31 December 2024 | ||||||||||||
| Current | Non-current | Total | ||||||||||
| AUD$ | AUD$ | AUD$ | ||||||||||
| Due to related parties | ||||||||||||
| Energreen Nutrition Australia Pty Ltd. loan | ||||||||||||
| JSKS Enterprises Pty Ltd. Loan | (1) | |||||||||||
| CQ Oilseeds Pty Ltd. loan | ||||||||||||
| Sunmania Pty Ltd loan | ||||||||||||
| Total due to related parties | ||||||||||||
| Due from JSKS (Note-3) | ||||||||||||
| American Physicians LLC promissory note (2) | ||||||||||||
| Energreen Nutrition Australia Pty Ltd. accounts payable (Note 7) | ||||||||||||
| Trade receivable- Energreen Nutrition (Note- 3) | ||||||||||||
| Trade receivable- Sunmania Pty Ltd (Note-3) | ||||||||||||
The current loans are payable on demand and the non-current loans have a maturity date which is more than 12 months from the date of 30 June 2024.
| Balance | ||||||||||||
| as of 30 June 2024 | ||||||||||||
| Current | Non-current | Total | ||||||||||
| AUD$ | AUD$ | AUD$ | ||||||||||
| Due to related parties | ||||||||||||
| Energreen Nutrition Australia Pty Ltd. loan | ||||||||||||
| JSKS Enterprises Pty Ltd. Loan | ||||||||||||
| CQ Oilseeds Pty Ltd. loan | ||||||||||||
| Sunmania Pty Ltd loan | ||||||||||||
| Less: Origin Food loan receivable | ( | ) | ( | ) | ||||||||
| Total due to related parties | ||||||||||||
| American Physicians LLC promissory note | ||||||||||||
| Energreen Nutrition Australia Pty Ltd. accounts payable (Note 7) | ||||||||||||
| (1) | Includes
$ | |
| (2) | Includes
$ |
| 21 |
Interest
to Energreen Nutrition Australia Pty Ltd. was AUD$
Promissory Notes
On
March 21, 2024, the Company issued two promissory notes in the principal amounts of USD$
The First Promissory Note accrues interest on the principal outstanding from time to time at a rate per annum equal to term SOFR for the interest period commencing on March 21, 2024. Interest shall be calculated on the basis on a 360-day year and actual days elapsed. The First Promissory Note principal and accrued interest are due and payable as follows:
(i)
USD$
(ii)
USD$
(iii)
USD $
(iv)
USD$
As
of 31 December 2024, and 30 June 2024, there was AUD$
The Second Promissory Note accrues interest on the principal outstanding from time to time at a rate per annum equal to term SOFR for the interest period commencing on March 21, 2024. Interest shall be calculated on the basis on a 360-day year and actual days elapsed. The Second Promissory Note principal and accrued interest are due and payable as follows:
(i)
USD$
(ii)
USD$
(iii) Remaining balance plus any accrued but unpaid interest shall be paid on December 21, 2025.
As
of 31 December 2024, and 30 June 2024, there was AUD$
Accrued
interest on the First Promissory Note and the Second Promissory Note was AUD$
The following table summarizes the promissory notes – related party as of 31 December 2024 and 30 June 2024:
Schedule of Promissory Notes Related Party
Unaudited 31 December 2024 | 30 June 2024 | |||||||||||||||||||||||
| AUD$ | AUD$ | |||||||||||||||||||||||
| Current | Non-Current | Total | Current | Non-Current | Total | |||||||||||||||||||
| Promissory notes – related party | ||||||||||||||||||||||||
22. Fair value measurement
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurement are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
| ● | Level 1: quoted market price (unadjusted) in an active market for identical assets or liabilities that the entity can access at the measurement date. | |
| ● | Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability; either directly or indirectly. | |
| ● | Level 3: inputs that are unobservable inputs for the asset or liability. |
| 22 |
The carrying amounts of the financial assets and financial liabilities approximate their fair values.
The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses are estimated to approximate the carrying values as of 31 December 2024 and 30 June 2024, due to the short maturities of such instruments.
The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis on 31 December 2024 and 30 June 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Schedule of Company’s Fair Value on a Recurring Basis
| 31 December | 30 June | |||||||||
| Description: | Level | 2024 | 2024 | |||||||
| AUD$ | AUD$ | |||||||||
| Liabilities: | ||||||||||
| Warrant liability—Private and Representative Warrants | 3 | |||||||||
| Warrant liability – Penny Warrants | 3 | |||||||||
| Warrant liability – Arena Ordinary Share Warrants | 3 | |||||||||
| Total | ||||||||||
The Private Warrants, Representative’s Warrants, Penny Warrants, and Arena Ordinary Share Warrants are accounted for as liabilities and are measured at fair value as of each reporting period. Changes in the fair value of the Warrants are recorded in the statements of operations for each period.
The Private Warrants, Representative Warrants, Penny Warrants, and Arena Ordinary Share Warrants were valued using a Montel Carlo simulation model, which is considered to be a Level 3 fair value measurement. Inherent in an options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
There were no transfers between Levels 1, 2 or 3 during the three and six months ended 31 December 2024 and the year ended 30 June 2024.
The following table provides quantitative information regarding Level 3 fair value measurements for Private Warrants as of 31 December 2024 and 30 June 2024. The Representative Warrants were valued using similar information, except for the strike price which is USD$.
Schedule of Fair Value Measurements for Private Warrants
| 31 December and 30 June | ||||
| 2024 | ||||
| $USD | ||||
| Exercise price | $ | |||
| Share price | $ | |||
| Volatility | % | |||
| Expected life | ||||
| Risk-free rate | % | |||
| Dividend yield | % | |||
The following table provides quantitative information regarding Level 3 fair value measurements for the Penny Warrants and the Arena Ordinary Share Warrants as of 31 December 2024 and 30 June 2024.
Schedule of Fair Value Measurements of Warrants
| 31 December and 30 June | Initial value April 8, | |||||||
| 2024 | 2024 | |||||||
| $USD | $USD | |||||||
| Exercise price | ||||||||
| Share price | $ | $ | ||||||
| Volatility | % | % | ||||||
| Expected life | ||||||||
| Risk-free rate | % | % | ||||||
| Dividend yield | % | % | ||||||
The following table presents a summary of the changes in the fair value of the Private Warrants Penny Warrants, and Arena Warrants, Level 3 liabilities, measured on a recurring basis.
Schedule of Changes in the Fair Value
| Private Placement | Representative | Arena Ordinary Share | Penny | Total Warrant Liabilities | ||||||||||||||||
| $AUD | $AUD | $AUD | $AUD | |||||||||||||||||
| Fair value as of 30 June 2024 | $ | $ | $ | $ | $ | |||||||||||||||
| Change in fair value | ||||||||||||||||||||
| Fair value as of 31 December 2024 | $ | $ | $ | $ | $ | |||||||||||||||
| 23 |
There were no significant changes to fair values of above instruments from 30 June 2024 to 31 December 2024.
23. Commitments and Contingencies
In
the opinion of the Directors, the Company did
Other Commitments
On March 21, 2024, the Company entered into a fee modification agreement (the “Agreement”) with I-Bankers Securities, Inc. (“IBS”) related to the fees owed to IBS at the closing of the Business Combination pursuant to the original retainer letter (the “Owed Amounts”), for which IBS provided financial representation to EDOC regarding the Business Combination. Pursuant to the Agreement, IBS agreed to accept a payment plan for the Owed Amounts as follows:
| (a) | USD$ | |
| (b) | The
remaining balance owed of USD$ | |
| (c) | Deferred Cash Payment Obligations shall be accelerated in the event the Company issues debt, equity, or other equity-linked securities in one or more public or private offerings (“Capital Event”). Upon the occurrence of a Capital Event the Company shall pay from the Proceeds of the applicable capital sources within no more than three (3) business days following the consummation of such Capital Event of at least twenty percent (20%) of the Proceeds, up to the amount of any then-outstanding Deferred Cash Payment Obligations. |
As
of 31 December 2024 and 30 June 2024, the Company has paid and USD$
In
June 2024, the Company entered into a payment agreement with Ellenoff Grossman & Schole LLP (“EGS”) related to the fees
owed to EGS at the closing of the Business Combination for which EGS provided legal representation to EDOC regarding the Business Combination.
Pursuant to the agreement, the EGS agreed to reduce the amount owed by the Company by USD$
As
of 31 December 2024, the Company has paid USD$
24. Net Tangible Assets
Net tangible assets per ordinary share have been determined using the net assets on the consolidated statement of financial position adjusted for non-controlling interests, intangible assets and goodwill.
25. Events Occurring After the Reporting Date
The consolidated financial report was authorised for issue by the board of directors.
No matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.
| 24 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,” “our,” “us” or “we” refer to Australian Oilseeds Holdings Ltd. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” and “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Company Overview
The Company is a Cayman Islands exempted company that, directly and indirectly through its subsidiaries, is focused on the manufacture and sale of chemical free, non-GMO, sustainable edible oils and products derived from oilseeds. The Company believes that transitioning from a fossil fuel economy to a renewable and chemical free economy is the solution to many health problems the world is facing presently. To that end, the Company is committed to working with suppliers and customers to eliminate chemicals from the edible oil production and manufacturing systems to supply quality products such as non-GMO oilseeds and organic and non-organic food-grade oils to customers globally. Over the past 20 years, Australian Oilseeds Investments Pty Ltd., an Australian proprietary company (“AOI”) has grown to be the largest cold pressing oil plant in Australia, pressing strictly GMO free conventional and organic oilseeds.
Business Combination
On March 21, 2024 (the “Closing Date”), Australian Oilseeds Holdings Limited., a Cayman Islands exempted company (“Australian Oilseeds” or the “Company”), consummated the previously announced business combination pursuant to the Business Combination Agreement, dated as of December 5, 2022 (as amended on March 31, 2023 and December 7, 2023 (the “Business Combination Agreement”), between the Company, EDOC Acquisition Corp., a Cayman Islands exempted company (“EDOC”), American Physicians LLC, a Delaware limited liability company, in the capacity as the representative, from and after the Closing Date for the shareholders of Purchaser and the Company (other than the Sellers (as defined below)) in accordance with the terms and conditions of the Business Combination Agreement (the “Purchaser Representative”), AOI Merger Sub, a Cayman Islands exempted company and a wholly-owned subsidiary of the Company (“Merger Sub”), Australian Oilseeds Investments Pty Ltd., an Australian proprietary company (“AOI”), Gary Seaton, in his capacity as the representative for the Sellers, in accordance with the terms and conditions of the Business Combination Agreement (the “Seller Representative”), and each of the holders of AOI’s outstanding ordinary shares named on Annex I to the Business Combination Agreement (the “Primary Sellers”), as amended from time to time, to include subsequent parties that execute and deliver to Purchaser, the Company and AOI, a Joinder (the “Joining Sellers”), and the holders of AOI’s outstanding ordinary shares who are bound by the provisions of the Business Combination Agreement pursuant to the drag-along rights set forth in AOI’s memorandum and articles of association (the “Drag-Along Sellers,” and collectively with the Joining Sellers, the “Sellers”). The transactions contemplated by the Business Combination Agreement are referred to herein as the “Business Combination.”
Pursuant to the Business Combination Agreement, on the Closing Date, EDOC merged with and into Merger Sub, with EDOC continuing as the surviving entity (the “Merger”), as a result of which, EDOC became a wholly-owned subsidiary of the Company, and each issued and outstanding security of EDOC prior to the Closing Date was cancelled in exchange for the receipt of substantially identical securities of the Company. Also on the Closing Date, the Company acquired all of the issued and outstanding ordinary shares of AOI (the “Purchased Shares”) from the Sellers in exchange for the Company’s ordinary shares (“Company Ordinary Shares”) par value $0.0001 per share (the “Share Exchange”). More specifically, pursuant to the Business Combination Agreement, at the effective time of the Business Combination (the “Effective Time”):
| (i) | Each holder of EDOC pre-transaction privately-held Class A ordinary shares and the Class B ordinary share (the “EDOC Ordinary Shares”) received Company Ordinary Shares, which are listed under the ticker “COOT” (less 200,000 Class A ordinary shares that were forfeited by EDOC back to the Company); | |
| (ii) | Each holder of AOI ordinary shares received Company Ordinary Shares on a one-for-one basis (the “Exchange Shares”); | |
| (iii) | Each holder of EDOC’s public Class A ordinary shares received Company Ordinary Shares on a one-for-one basis; | |
| (iv) | EDOC’s warrants terminated and were exchanged for warrants of the Company (the “Warrants”), which Warrants are listed on the Nasdaq under “COOTW”; | |
| (v) | Each holder of EDOC’s rights (the “Rights”) received 1/10 of a Company Ordinary Share for each such Right, as set forth herein; | |
| (vi) | EDOC’s Rights were no longer be traded; | |
| (vii) | EDOC’s 479,000 placement units (“Placement Units”) were exchanged for Company Ordinary Shares and Warrants of the Company; and | |
| (viii) | EDOC’ $1,500,000 of convertible promissory notes that were convertible at Closing into Company Ordinary Shares (“Convertible Shares”) and warrants (“Convertible Warrants”). |
In connection with the closing of the Business Combination, EDOC and/or the Company entered into or amended, as applicable, certain agreements with their vendors or service providers, including the underwriter in EDOC’s IPO, to pay various business combination transaction expenses otherwise due at Closing, including deferral agreements with vendors or service providers, requiring deferred cash payments by the registrant to such parties to be satisfied over specified time periods after Closing, and certain other fee modification agreements with vendors or service providers pursuant to which such parties received newly issued Ordinary Shares at Closing and/or deferred cash payments (or a combination of both). Pursuant to such agreements, an aggregate of 840,891 Company Ordinary Shares (694,391 to Arc Group Limited and 146,500 to I-Bankers Securities, Inc.) were issued to such providers.
| 25 |
In addition, in connection with the closing of the Business Combination, the Company closed the private placement of the Arena Warrants and Debentures pursuant to the Securities Purchase Agreement dated August 23, 2023 between the Company, AOI, EDOC, certain AOI subsidiaries and Arena Investors, LP (the “PIPE Investors”) and executed the Arena Transaction Documents including the 10% Original Issue Discount Secured Convertible Debenture, the Arena Warrant, the Registration Rights Agreement and related documents.
In addition, at the Closing, the Company, the Primary Sellers, the Purchaser Representative, the Seller Representative and the Escrow Agent entered into an escrow agreement (the “Subscription Escrow Agreement”), pursuant to which a number of Exchange Shares equal to 15% of the estimated Exchange Consideration issuable to the Sellers at the Closing (such Exchange Shares, together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted the “Escrow Shares”) are subject to the restrictions of the Escrow Agreement and shall be held by the Escrow Agent, along with any dividends, distributions or income thereon (together with the Escrow Shares, the “Escrow Property”) in a segregated account (the “Escrow Account”) and disbursed in accordance with the Business Combination Agreement and the Subscription Escrow Agreement. The Escrow Shares will be held in the Escrow Account for a period of 12 months after the Closing and shall be the sole and exclusive source of payment for any post-Closing purchase price adjustment and for any post-closing indemnification claims (other than certain fraud claims and breaches of AOI and the Sellers’ fundamental representations, as in the Business Combination Agreement). At the 12-month anniversary of the Closing, on March 21, 2025, all remaining Escrow Property will be released to the Sellers in accordance with the Business Combination Agreement. However, the amount of Escrow Property equal to the value of any pending and unresolved claims will remain in the Escrow Account until finally resolved.
The transaction was unanimously approved by the board of directors of EDOC and was approved at the extraordinary general meeting of EDOC’s shareholders held on March 6, 2024 (the “Special Meeting”). EDOC’s shareholders also voted to approve all other proposals presented at the Special Meeting. As a result of the Business Combination, AOI and EDOC became wholly-owned direct subsidiaries of the Company. On March 22, 2024, the Ordinary Shares and public warrants of the Company (the “Public Warrants”) commenced trading on the Nasdaq Global Market, or “Nasdaq,” under the symbols “COOT” and “COOTW,” respectively.
Key Components of Consolidated Statements of Profit or Loss and Other Comprehensive Income
Sales revenue
Revenues consist of sales of edible oils, sales of protein meals and tolling revenue from oilseeds crushing activities. The Company’s edible oil sales comprise of two segments: sales of bulk oils to wholesalers who use it as food ingredients or white labeling; sales of packaged oils as the company’s own branding to major supermarket channels. Sales of protein meals are bulk sales and mainly distributed to local farmers and feedlots as protein supplements. Tolling revenue is the service charge fee of crushing oilseeds to produce edible oils and protein meals.
Cost of sales
Cost of sales consist of costs directly related to the manufacturing process of edible oils and protein meals. It includes the cost of materials which mainly consist of the procurement cost of non-GMO canola seeds, canola seeds freight and storage cost from the suppliers, direct labor in the factory plant, occupancy costs of energy consumption of manufacturing process, depreciation expense of the crushing plant and relevant equipment and vehicles, and repairs and maintenance.
General and Administrative expenses
General and administrative expenses primarily consist of personnel expenses, professional fees, occupancy costs, depreciation expense, insurance expense, management fees, office expenses, security expenses, travel expenses, staff training expenses, utilities expenses, and subscription and dues expenses.
Sales and marketing expenses
Sales and marketing expenses primarily consist of sales directors’ salaries and supermarket promotion activities.
Other income
Other income primarily consists of fuel tax credit and recovery cost of freight and overdue interest.
Finance expenses
Finance expenses consist of interest paid related to bank loan and facility interest, related party loan interest and foreign exchange gain or loss.
Change in fair value of warrant liabilities
This consists of the change in fair value of certain warrant liabilities.
Results of Operations
The following selected consolidated financial data are derived from the unaudited financial statements of the Company for the three months ended 31 December 2024 and 2023 and should be read in conjunction with our consolidated financial statements, the related notes and the rest of the section of this Report entitled “Key Components of Consolidated Statements of Operations.” The historical results are not necessarily indicative of the results of future operations.
| 26 |
Three Months Ended 31 December 2024 Compared to the Three Months Ended 31 December 2023
The following tables set forth our Consolidated Statements of Operations data for the periods presented:
| 2024 | 2023 | Change | % | |||||||||||||
| AUD$ | AUD$ | |||||||||||||||
| Sales revenue | 10,404,851 | 9,952,463 | 452,388 | 4.5 | % | |||||||||||
| Cost of sales | (9,199,857 | ) | (8,110,209 | ) | (1,089,648 | ) | 13.4 | % | ||||||||
| Gross profit | 1,204,994 | 1,842,254 | (637,260 | ) | (34.6 | )% | ||||||||||
| General and administrative expenses | (1,141,438 | ) | (613,336 | ) | (528,102 | ) | 86.1 | % | ||||||||
| Selling and marketing expenses | (85,189 | ) | (186,332 | ) | 101,143 | (54.3 | )% | |||||||||
| Other income | 31,155 | 41,173 | (10,018 | ) | (24.3 | )% | ||||||||||
| Operating (loss)/profit | 9,522 | 1,083,759 | (1,074,237 | ) | (99.1 | )% | ||||||||||
| Finance expenses | (329,854 | ) | (113,371 | ) | (216,483 | ) | 191.0 | % | ||||||||
| (Loss)/Profit before income tax | (320,332 | ) | 970,388 | (1,290,720 | ) | (133.0 | )% | |||||||||
| Income tax expense | - | - | - | - | % | |||||||||||
| (Loss)/Profit for the period | (320,332 | ) | 970,388 | (1,290,720 | ) | (133.0 | )% | |||||||||
| Other comprehensive income for the period, net of tax | - | - | ||||||||||||||
| Total comprehensive (loss)/income | (320,332 | ) | 970,388 | (1,290,720 | ) | (133.0 | )% | |||||||||
| (Loss)/Profit attributable to: | ||||||||||||||||
| Members of the parent entity | (328,299 | ) | 735,668 | (1,063,966 | ) | (144.6 | )% | |||||||||
| Non-controlling interest | 7,967 | 234,720 | (226,753 | ) | (96.6 | )% | ||||||||||
| Total (Loss) Income | (320,332 | ) | 970,388 | (1,290,719 | ) | (133.0 | )% | |||||||||
| Total comprehensive (loss)/income attributable to: | ||||||||||||||||
| Members of the parent entity | (328,299 | ) | 735,668 | (1,063,966 | ) | (144.6 | )% | |||||||||
| Non-controlling interest | 7,967 | 234,720 | (226,753 | ) | (96.6 | )% | ||||||||||
| Total | (320,332 | ) | 970,388 | (1,290,719 | ) | (133.0 | )% | |||||||||
Revenue
| Three Months Ended 31 December (AUD) | ||||||||||||||||
| 2024 | 2023 | Change | Change % | |||||||||||||
| Total revenue | $ | 10,404,851 | $ | 9,952,463 | $ | 452,388 | 4.5 | % | ||||||||
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.
The following table summarizes the Company’s revenues disaggregated by product category:
| Three Months Ended 31 December (AUD) | ||||||||||||||||
| 2024 | 2023 | Change | Change % | |||||||||||||
| Wholesale oils | $ | 2,346,987 | $ | 3,057,273 | $ | (710,286 | ) | (23.2 | )% | |||||||
| High protein meals | 2,836,170 | 3,264,452 | (428,282 | ) | (13.1 | )% | ||||||||||
| Other sales | 43,439 | 123,143 | (79,704 | ) | (64.7 | )% | ||||||||||
| Retail oils | 5,178,255 | 3,507,595 | 1,670,660 | 47.6 | % | |||||||||||
| Total revenues | $ | 10,404,851 | $ | 9,952,463 | $ | 452,388 | 4.5 | % | ||||||||
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.
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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.
Cost of Sales
| Three Months Ended 31 December (AUD) | ||||||||||||||||
| 2024 | 2023 | Change | Change % | |||||||||||||
| Cost of material | $ | 5,401,859 | $ | 5,016,145 | $ | 385,715 | 7.7 | % | ||||||||
| Cost of finished goods | 2,189,181 | 1,745,113 | 444,068 | 25.4 | % | |||||||||||
| Freight and storage | 772,866 | 521,170 | 251,696 | 48.3 | % | |||||||||||
| Depreciation | 83,823 | 79,797 | 4,026 | 5.0 | % | |||||||||||
| Occupancy costs | 151,923 | 88,698 | 63,225 | 71.3 | % | |||||||||||
| Labor costs | 559,775 | 548,144 | 11,631 | 2.1 | % | |||||||||||
| Repairs and maintenance | 40,430 | 111,142 | (70,712 | ) | (63.6 | )% | ||||||||||
| Total cost of sales | $ | 9,199,857 | $ | 8,110,209 | $ | 1,089,648 | 13.4 | % | ||||||||
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.
General and administrative expenses
| Three Months Ended 31 December (AUD) | ||||||||||||||||
| 2024 | 2023 | Change | Change % | |||||||||||||
| General and administrative expenses | $ | 1,141,438 | $ | 613,336 | $ | 528,102 | 86.1 | % | ||||||||
General and administrative expenses for the three months ended 31 December 2024 were AUD$1.1 million, an increase of AUD$0.5 million, or 86.1%, compared to the three months ended 31 December 2023. This increase was primarily due to Increase in professional fee AUD 177K, Insurance AUD 79K, Audit fee AUD 90K and management fee AUD 36K
Selling and marketing expenses
| Three Months Ended 31 December (AUD) | ||||||||||||||||
| 2024 | 2023 | Change | Change % | |||||||||||||
| Selling and marketing expenses | $ | 85,189 | $ | 186,332 | $ | (101,143 | ) | (54.3 | )% | |||||||
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.
Other Income
| Three Months Ended 31 December (AUD) | ||||||||||||||||
| 2024 | 2023 | Change | Change % | |||||||||||||
| Other income | $ | 31,155 | $ | 41,173 | $ | (10,018 | ) | (24.3 | )% | |||||||
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.
Finance expenses
| Three Months Ended 31 December (AUD) | ||||||||||||||||
| 2024 | 2023 | Change | Change % | |||||||||||||
| Finance expenses | $ | 329,854 | $ | 113,371 | $ | 216,483 | 190.9 | % | ||||||||
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.
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Liquidity and Capital Resources
As of 31 December 2024, our principal sources of liquidity were net proceeds received related to the Business Combination and cash received from customers.
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).
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.
The financial statements have been prepared on a going concern basis, which contemplates continuity of normal activities and realization of assets and settlement of liabilities in the normal course of business.
We conducted a reverse acquisition of EDOC Acquisition Limited “ADOC” through the deSPAC on 21 March 2024, the consolidated entity assumed AUD$5,248,824 of previously unpaid transaction costs charged by service providers of “ADOC”, AUD$1,216,928 promissory notes to American Physicians LLC and an AUD$1,533,742 convertible note to PIPE Investor ARENA as of 30 June 2024.
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.
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.
The following table shows the net cash and cash equivalents provided by (used in) operating activities, net cash and cash equivalents used in investing activities, and net cash and cash equivalents provided by financing activities during the periods presented:
| Six Months Ended 31 December (AUD) | ||||||||
| 2024 | 2023 | |||||||
| Net cash provided by (used in) | 923,527 | 299,742 | ||||||
| Operating activities | $ | (2,468,989 | ) | (1,587,408 | ) | |||
| Investing activities | (805,084 | ) | (1,716,060 | ) | ||||
| Financing Activities | 4,197,600 | 3,603,210 | ||||||
Operating Activities
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.
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.
Investing Activities
Our investing activities have consisted primarily of property and equipment purchases.
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.
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.
Financing Activities
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.
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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.
Non- International Accounting Standards Financial Measure
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.
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.
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.
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.
The non- International Accounting Standards adjustments, and our basis for excluding them from our non- International Accounting Standards financial measure, are outlined below:
| ● | Unit and Stock-based compensation – Although unit and stock-based compensation is an important aspect of the compensation paid to our employees, the grant date fair value varies based on the derived stock price at the time of grant, varying valuation methodologies, subjective assumptions, and the variety of award types. This makes the comparison of our current financial results to previous and future periods difficult to interpret; therefore, we believe it is useful to exclude unit and stock-based compensation from our non- International Accounting Standards financial measures to highlight the performance of our business and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies. |
The following table reconciles International Accounting Standards net profit to Adjusted EBITDA during the periods presented (in thousands):
| Six Months Ended 31 December 2024 | Six Months Ended 31 December 2023 | |||||||
| Net (Loss) Profit | $ | (966,665 | ) | $ | 2,380,919 | |||
| Interest Expense | $ | 809,190 | $ | 222,599 | ||||
| Depreciation and amortization | $ | 195,768 | $ | 205,254 | ||||
| Adjusted EBITDA | $ | 38,293 | $ | 2,808,772 | ||||
Contractual Obligations and Commitments and Liquidity Outlook
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.
Our future capital requirements will also depend on additional factors, including our growth rate, the timing and extent of spending to support research and development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced product and service offerings, and the cost of any future acquisitions of technology or businesses. In the event that additional financing is required from outside sources, we may be unable to raise the funds on acceptable terms, if at all.
Material Accounting Policies and Estimates
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.
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We believe that the assumptions and estimates associated with the following material accounting policies involve significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements.
Revenue Recognition
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.
Although most of our sales agreements contain standard terms and conditions, certain agreements contain multiple performance obligations or non-standard terms and conditions. For customer contracts that contain more than one performance obligation, we allocate the total transaction consideration to each performance obligation based on the relative stand-alone selling price of each performance obligation within the contract. We rely on either observable standalone sales or an expected cost plus a margin approach to determine the standalone selling price of offerings, depending on the nature of the performance obligation.
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.
Stock-based Compensation
Following the Business Combination, the Company has authorized 555,000,000 shares including 500,000,000 Class A Ordinary Shares, 50,000,000 Class B Ordinary Shares, and 5,000,000 Preference Shares, each of par value $0.0001 per share. In addition, the Company has three classes of warrants (i.e., Public Warrants, Private Warrants and PIPE Warrants) issued and outstanding.
The assumptions used in calculating the fair value of stock-based compensation awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.
Warrant transactions
PIPE Warrants to purchase our Ordinary Shares are accounted for as liability or instruments based on the terms of the warrant agreements. The warrants issued by us are accounted for as liability instruments under IFRS 9 due to the rights of the grantee to require cash settlement.
Private Warrants and Representative Warrants to purchase units accounted for as liability instruments represent the warrants issued to significant shareholders and related parties.
Penny Warrants are a contingently issuable instrument to issue the Company’s shares and are accounted for as a financial liability.
Public Warrants are accounted for as equity instruments due to our ability to settle the warrants through the issuance of units.
In order to calculate warrant charges, we used the Monte Carlo simulations, which required key inputs including volatility and risk-free interest rate and certain unobservable inputs for which there is little or no market data, requiring us to develop our own assumptions. We estimated the fair value of unvested warrants, considered to be probable to be vesting, at the time. Based on that estimated fair value, we determined warrant charges, which were recorded as a reduction of the transaction price.
Off-Balance Sheet Arrangements
As of 31 December 2024 and 30 June 2024, we had no off-balance sheet arrangements as defined in Instruction 8 to Item 303(b) of Regulation S-K.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk, including changes to interest rates and foreign currency exchange rates.
Interest Rate Sensitivity
We had cash and cash equivalents totaling AUD$1,437,667 and AUD$514,140 as of 31 December 2024, and 30 June 2024, respectively. Cash and cash equivalents include cash on hand and investments with original maturities of three months or less, are stated at cost, and approximate fair value. Our investment policy and strategy are focused on preservation of capital, supporting our liquidity requirements, and delivering competitive returns subject to prevailing market conditions. We were not exposed to material risks due to changes in market interest rates given the liquidity of the cash and investments with original maturity of three months.
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Foreign Currency Risk
Although we are exposed to foreign currency risk from our international operations, we do not consider it to have a material impact. Certain transactions of the Company and its subsidiaries are denominated in currencies other than the functional currency.
Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.
The Company’s cash and cash equivalents are generally held with large financial institutions. Although the Company’s deposits may exceed federally insured limits, the financial institutions that the Company uses have high investment-grade credit ratings and, as a result, the Company believes that, as of June 30, 2024, its risk relating to deposits exceeding federally insured limits was not significant.
The Company has no significant off-balance sheet risk such as foreign exchange contracts, options contracts, or other hedging arrangements.
The Company believes its credit policies are prudent and reflect normal industry terms and business risk. The Company generally does not require collateral from its customers and generally requires payment from zero to 90 days from the invoice date with typical terms of 30 days. As of 31 December, 2024, three customers accounted for 40.0% of the Company’s accounts receivable balance, and three customers accounted for more than 34% of the Company’s accounts receivable balance as of 31 December 2023.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of December 31, 2024.
Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that, because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K/A for the fiscal year ended June 30, 2024, filed with the SEC on December 6, 2024, and further referenced below, which we are still in the process of remediating as of December 31, 2024, our disclosure controls and procedures were not effective.
The Company restated its consolidated balance sheet as of June 30, 2023 (the “2023 Restatement”). For a discussion of the individual restatement adjustments and the impact of such adjustments on the Company’s previously issued financial statements, see “Item 8., Note 2. Restatement of Previously Issued Financial Statements,” in our 10K lodged for 30 June 2024.
Changes in Internal Control Over Financial Reporting
This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.
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PART
II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There were no material developments during the quarter ended December 31, 2024 to the legal proceedings previously disclosed in Item 3 “Legal Proceedings” of our Annual Report on Form 10-K/A filed on December 6, 2024.
ITEM 1A. RISK FACTORS.
For information regarding additional risk factors, please refer to our Annual Report on Form 10-K/A for the year ended June 30, 2024 filed with the SEC on December 6, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
We have not sold any equity securities during the quarter ended December 31, 2024 that were not previously disclosed in a current report on Form 8-K that was filed during the quarter.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
We have no information to disclose that was required to be in a report on Form 8-K during the quarter ended December 31, 2024 but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.
ITEM 6. EXHIBITS
| * | Filed herewith |
| 33 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: March 31, 2025 | AUSTRALIAN OILSEEDS HOLDINGS LTD. | |
| /s/ Gary Seaton | ||
| Name: | Gary Seaton | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| /s/ Amarjeet Singh | ||
| Name: | Amarjeet Singh | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
| 34 |
Exhibit 31.1
CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Gary Seaton, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Australian Oilseeds Holdings Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | March 31, 2025 |
|
| By: | /s/ Gary Seaton | |
| Gary Seaton, Chief Executive Officer |
Exhibit 31.2
CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Amarjeet Singh, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Australian Oilseeds Holdings Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | March 31, 2025 |
|
| By: | /s/ Amarjeet Singh | |
| Amarjeet Singh Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Australian Oilseeds Holdings Ltd. (the “Company”) on Form 10-Q for the period ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 31, 2025
| By: | /s/ Gary Seaton | |
| Gary Seaton | ||
| Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Australian Oilseeds Holdings Ltd. (the “Company”) on Form 10-Q for the period ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 31, 2025
| By: | /s/ Amarjeet Singh | |
| Amarjeet Singh | ||
| Chief Financial Officer |