Australian Oilseeds Holdings Limited(COOT) - 2024 Q4 - Annual Report

Market Overview - The global oilseeds market was valued at $264.87 billion in 2022 and is projected to grow to$ 340.44 billion by 2026, with a CAGR of 5.7%[59] - The global oilseed market is expected to be valued at approximately $373.32 billion by 2033, growing at a CAGR of 4.13% from 2024 to 2033[70] - The Asia Pacific oilseed market was valued at USD$ 87.46 billion in 2023 and is projected to grow at a CAGR of 37.7%, reaching approximately USD $140.38 billion by 2033[74] - The global non-GMO food market size was USD$ 740.65 billion in 2023, with projections to grow to USD $2,003.68 billion by 2032, reflecting a CAGR of 11.94%[76] - The soybeans segment accounted for over 59.14% of global revenue share in 2023, driven by increased consumption and production in key regions like Brazil and Argentina[73] Company Expansion and Capacity - The Company plans to expand its cold-pressing capacity from 40,000 metric tons to 80,000 metric tons per annum to meet increasing global demand for sustainable products[62] - The Company has established a multi-seed crushing plant in Emerald, Queensland, with a projected capacity of 80,000 metric tons per annum by the end of 2023[62] - The Company plans to expand its cold-pressing capacity from 33,000 metric tons to 80,000 metric tons per annum through a new facility in Queensland[82] - The new multi-oilseed crushing plant in Queensland is expected to have a capacity of 200 tons per day and will produce edible oil feedstocks and bio-diesel feedstock[108] - The construction of the new plant in Queensland is projected to cost AUD$ 25 million, with government support of AUD $5 million in incentives and tax credits[109] - The Company aims to develop a$ 1 billion oilseed processing industry in Queensland, similar to existing operations in New South Wales and Victoria, which contribute between $5 billion and$ 7 billion annually to their economies[113] - The Cootamundra facility has a processing capacity of over 33,000 metric tons per annum, and the total capacity between the Cootamundra and the new Queensland facility is expected to be approximately 160,000 metric tons, four times the current capacity[210] Sustainability and Sourcing - The Company is committed to sourcing oilseeds from farmers practicing sustainable and organic farming methods, contrasting with traditional agriculture practices[47] - The Company has exclusive supply agreements with Good Earth Growers, the first certified "Chemical Free Farmers" in Australia, to ensure chemical-free oilseed supply[47] - The Company aims to become carbon neutral and has implemented renewable solar energy at its processing plant, abating 42.2 metric tons of CO2 per month[86] - The Company is focusing on expanding its market presence in non-GMO and chemical-free food graded oil and protein materials to meet rising international demand[99] - The Company is developing sustainable and chemical-free products and does not currently anticipate material impacts from climate-related legislation[202] Financial Performance - The Company generated approximately 85% of its total revenue from cold pressed vegetable oils in fiscal year 2023, with a revenue increase of AUD $4.79 million or 16% to AUD$ 33.73 million for the year ended June 30, 2024[89] - For fiscal years June 30, 2024 and 2023, approximately 85% and 89% of total revenue was derived from the sale of cold pressed vegetable oils, with the remainder from vegetable protein meals[187] - Approximately 98% and 89% of total revenue for fiscal years 2023 and 2022, respectively, was derived from the sale of cold-pressed vegetable oils and its product meal cake[213] - The Company’s top five customers accounted for 64.8% of total sales for the year ended June 30, 2024, with the top three customers representing 49.4% of total sales[90] - The supply agreement with Costco Australia is projected to generate approximately AUD $3.2 million in sales through mid-December 2024[92] Legal and Corporate Developments - The business combination between Australian Oilseeds Holdings Limited and EDOC Acquisition Corp was completed on March 21, 2024, resulting in EDOC becoming a wholly owned subsidiary of the Company[132] - A total of 23,224,102 Ordinary Shares were issued and outstanding as of the Closing Date, with approximately 17,088,324 Ordinary Shares (or approximately 73.6%) subject to lock-up agreements[138] - The Company issued an aggregate of 840,891 Company Ordinary Shares to vendors and service providers as part of the business combination transaction expenses[134] - The business combination was unanimously approved by the board of directors of EDOC and by shareholders at a special meeting held on March 6, 2024[137] - The Company acquired all issued and outstanding ordinary shares of Australian Oilseeds Investments Pty Ltd in exchange for Company Ordinary Shares on a one-for-one basis[132] Risks and Challenges - The Company is significantly dependent on contracts with local and regional farmers for oilseeds, and loss of these contracts could materially affect business and revenue[190] - The Company faces risks related to global, federal, state, and local regulations that could materially and adversely affect its business and financial condition[194] - The Company is vulnerable to market changes affecting oil seeds, which could negatively impact product margins and overall financial performance[188] - The Company relies on a small group of customers for a material concentration of revenue, and loss of any of these customers could adversely impact cash flows[192] - The company is subject to potential price controls on its vegetable oils, which could significantly reduce revenue and profitability if implemented[226] - Adverse publicity regarding product safety and quality could negatively impact the company's reputation and sales[229][231] - The company faces risks related to the development of new products, which may strain resources and affect financial performance if unsuccessful[232] - Operations may be disrupted due to maintenance or unforeseen events, potentially affecting production capabilities[234] - Geopolitical risks could impact the company's international operations and supply chain, affecting sales and financial condition[239] Employee and Corporate Governance - The Company has 21 full-time employees and 15 full-time equivalent contractors, indicating a cooperative relationship with its workforce[105] - The company has approximately 21 employees as of June 30, 2024, including 7 full-time equivalent contractors[152] - The company qualifies as an emerging growth company with revenues below$ 1.235 billion in the last fiscal year, allowing it to take advantage of reduced reporting requirements[157] - The Company entered into employment agreements with two executive officers, providing Gary Seaton with an annual salary of $150,000 and Bob Wu with an annual salary of$ 100,000[142][143] Compliance and Reporting - The company received a notification from Nasdaq regarding non-compliance with the minimum bid price requirement of $1 per share, with a compliance period until February 24, 2025[164][165] - The company has not paid any cash dividends to date and does not anticipate doing so in the foreseeable future, focusing instead on business development and expansion[175] - The company may rely on exemptions from various reporting requirements under the JOBS Act, which could make its Ordinary Shares less attractive to investors[179] - The concentrated voting power of principal shareholders may delay or prevent significant corporate actions, including acquisitions[170] - The company may face substantial costs and management distractions if subjected to securities class action litigation, which is common in the health technology sector[171] - Future sales of substantial amounts of Ordinary Shares could adversely affect the market price of the shares[176] Innovation and Technology - The Company utilizes cold pressing methods to retain nutritional values and healthy omega fatty acids in its products, with processing temperatures below 50 degrees Celsius[48] - The Company is focused on innovation and expanding its distribution network to promote its non-GMO food-grade oils and protein meals[104] - The company has implemented various cybersecurity measures to protect sensitive data, but risks of data breaches remain[236][238]