A. Operating Results
We are a clinical and science-based company that is focused on developing and commercializing white label gel-based delivery solutions for prescription drugs, nutraceuticals, pet care and other products. A "white label" gel-based delivery solution is where we produce a product that other companies rebrand as their own product. Our principal products are edible gels, which we refer to as gels, and their application in gel-based dosage forms. Our current product suite consists of multiple products that sit within five core verticals - for pets, sports, pharmaceutical (pharma), over-the-counter (OTC) and nutraceutical - all of which leverage our patent pending multiple-ingredient dosage forms, and that we expect to have a wide range of applications and consumers. We currently focus our efforts on out-licensing our technology to companies to develop and create new products they can manufacture and sell within their established and researched markets, while we continue to manufacture our existing products under license.
Financial Operations Overview
Revenues
For the year ended June 30, 2025, we had prioritized pharmaceutical research and improving operational processes, and we expect to grow and execute on our business plans with lower overheads and expenses in the financial year ending June 30, 2026. To facilitate this, we entered into a rental contract, filed as an exhibit to the registration statement of which this Annual Report forms a part, for laboratory facilities with Monash University on February 2, 2024 (the "Monash Facilities") for further research purposes. Our lack of personnel, and our focus on research, and identifying and establishing a laboratory facility, adversely affected our ability to close new sales opportunities. We believe this will only have a short-term impact on sales revenue which was AUD$165,645 for the year ended June 30, 2025.
With the Monash Facilities established and fitted, as well as the closing of our IPO, we are prioritizing our sales activities with a focus on the animal health, nutraceutical, sports, over-the-counter and pharmaceuticals verticals for the year ending June 30, 2026. Notwithstanding the foregoing we are currently prioritizing pharmaceutical research on our existing 505b(2) application and seeking other potential pharmaceutical candidates through such pathway.
We continue to discuss revenue opportunities with existing and prospective customers and we remain confident in our sales strategy and our strong existing new business pipeline, and we would fulfil our revenue numbers should each existing potential client in the pipeline eventuate. However, for the business to generate its expected revenue from products sales and licenses in the financial year ending June 30, 2026, we need to ensure the following events will occur:
| 1) | Manufacturing - As we continue to have part of our manufacturing process in Xiamen, Fujian, China, we remain confident that products will still be manufactured and shipped to our customers globally. However, given the follow-on effects to the Chinese economy due to stringent protocols of COVID-19 there and together with emerging cross-border tariffs that impact the cost of goods, supply chains and pricing, we must remain vigilant on any potential change. We also rely on all raw materials being readily available both in China and in our US operations. We are continuing to see first-hand delays of ingredients reaching our manufacturers on time. |
| 2) | Advertising - We have allowed for a substantial advertising budget in the financial year ending June 30, 2026 to introduce the business and our products and services to potential licensees. This will include a combination of increased sales staff, attendance at relevant exhibitions and conferences, and more traditional online advertising and marketing efforts. The business will also be launching a series of mini websites, each site based on our products, to educate and serve as a resource material to our existing customers and potential customers. This would in turn potentially sell Gelteq products and to initiate more relevant marketing activity. |
| 3) | Existing Clients - We already have existing licensees. Many of our clients have forecast future orders later this calendar year, and we believe these orders will assist us in realizing our desired revenue targets. At the date of this Annual Report, we expect approximately one million units to be ordered from existing customers, with many of these being treated as pilots with lower margins. We anticipate that such orders would increase our products' market exposure in the wider market; additional orders from these clients may provide increased sales revenues and gross margins. In addition, we would be in a position to negotiate higher per unit pricing for any new clients we acquire subsequent to the pilot sales, which in turn would provide higher overall margins for the business. As such, we thereby believe that the initial sales may generate the conditions for further revenues which would improve our financial position. However, it is the additional revenue opportunities that may develop as a result of these orders, and which are not immediately quantifiable, that we believe will provide a potential revenue source during the year ended June 30, 2026. As part of our sales effort, we have engaged a sales and marketing firm in the Asia Pacific region to help launch our sporting products on our new online stores in China and we expect such stores to provide additional revenue during the year ended June 30, 2026. There is no guarantee that all or any of pre-ordered amounts will come to fruition, as we depend on our customers' cash flows to manufacture the products as well as the outcome of the initial trial orders for some of our licensees. Our customers that had cash flow difficulties had resolved them, and we have shipped these orders in the fiscal year ending June 30, 2025. |
| 4) | New Hires - To date, we have not been adequately staffed to be able to reach our projected forecasted revenues. We have been focused on selecting the right new hires to directly assist us to reach our revenue targets, with these hires to be spread across the business to ensure all sectors are adequately staffed and working towards business performance. We expect that we will onboard an additional three sales managers in the year ending June 30, 2026 once adequate funds have been raised to assist us in meeting our revenue targets. |
Operating expenses
Our company's focus has been on research, with our operating expenses being made up of corporate and administrative expenses together with research expenses.
Research expenses
Our research expenses consist of:
| ● | salaries for research staff and consultants, including employee benefits; |
| ● | expenses paid to contracted University for product testing, validation and pre-clinical studies; and |
| ● | raw material expenses. |
The primary research on our gel based delivery system is completed and the Company has already begun manufacturing across different product verticals in May 2022.
With our product verticals, in the financial year ending June 30, 2026, we will prioritize research and development in our pharmaceutical/OTC vertical. Unlike foods, nutraceuticals, and sporting verticals, pharmaceutical and OTC regulations are stricter and require clinical work or studies. Clinical research and development costs differ at different stages of the product research and development cycle. As our focus is on the 505(b)(2) pathway, these expenses are substantially less than that of a new drug development. However, the studies required can still be unpredictable in cost. While we do all the required lab work possible prior, there is inherent uncertainty in a clinical trial that makes it difficult to be assured of the time when the results will arrive and whether additional trials are needed. Given this, the timing for income generation from these products has uncertainties and we may require additional research and development costs to finalize a product.
The 505(b)(2) pathway is the shortest timeline we can take to register a product with the FDA as the approved timeline requires stability and bioequivalence data rather than three phases of clinical trials. Any trials which have a negative outcome, or any requirements from a regulatory body for additional data will create a delay to income and increase our research and development costs which in turn can have a material adverse effect on our operations.
Corporate and administrative expenses
Our corporate and administrative expenses are primarily made up of staff and consultants' salaries, employee benefits, professional fees for auditors, consultants and legal counsel and advertising and marketing expenses. Such expenses are incurred in the process of becoming an Australian public company that is to be treated as a public company in the United States.
We can expect the corporate and administrative expenses to increase through an increase in staffing expenses and employee benefits, legal and auditor professional fees, fees associated with stock exchange listing and SEC requirements, investor relations expenses and insurances.
As we have products ready for commercialization, the increase in staff expenses is expected to prepare for commercial operations, in particular around sales and marketing of our products.
Financial expenses
Financial expenses mainly consists of interest on existing shareholders' loans at an interest rate of 12% per annum, convertible notes with various interest rates and other minor finance expenses. For the year ending June 30, 2025, the shareholder loans interest contributed AUD$634,149 (AUD$460,112 for the year ended June 30, 2024) convertible note interest contributed AUD$1,260,500 (AUD$124,904 for the year ended June 30, 2024) and other minor finance costs contributing AUD $55,938 (AUD$15,100 for the year ended June 30, 2024). Also, as products are manufactured and sold, together with necessary clinical trials, we can expect an increase in financial expenses which will consist mainly of expenses related to foreign currency exchange transactions and standard bank charges.
Acquisitions
During the year ended June 30, 2021, we acquired Nutrigel Pty Ltd and Unit Trust (NPL) and Sport Supplements Pty Ltd and Unit Trust (SSPL). We completed both transactions on a 100% all-script offer, ensuring no cash constraints on the business, and allowing the business to put funds into growing the sports business and the formulations that were acquired as part of the Nutrigel transaction. We believe these acquisitions will significantly enhance Gelteq's technological research and product portfolio which in turn would drive both short and medium term revenue growth.
Acquisition of Nutrigel Pty Ltd and Unit Trust (NPL)
On June 13, 2021, we acquired 100% beneficial interest in Nutrigel Pty Ltd and Unit Trust, NPL or Nutrigel, for a consideration of AUD$9,326,400, comprising the issuance of 1,740 fully paid Ordinary Shares of Gelteq Limited to the vendors, with a deemed fair value of AUD$5,360 per fully paid ordinary share. All shares were issued prior to the wider company share split of 1,050 shares for each share outstanding. Post share split, this equates to 1,827,000 shares at AUD$5.10 per fully paid ordinary share.
Nutrigel is a company which had finalized its research in pet nutraceuticals, including detailed recipes and associated marketing materials. The acquisition of Nutrigel was executed as it is in line with the Company's strategic plan of expanding its product offering, the timing being the most optimal for the respective parties.
Acquisition of Sport Supplements Pty Ltd and Unit Trust (SSPL)
On June 13, 2021, we acquired 100% beneficial interest in Sport Supplements Pty Ltd and Unit Trust, SSPL or Sport Supplements, for a consideration of AUD$14,659,600, comprising the issuance of 2,735 fully paid Ordinary Shares of Gelteq Limited to the vendors, with a deemed fair value of AUD$5,360 per fully paid ordinary share. All shares were issued prior to the wider company share split of 1,050 in shares for each share outstanding. Post share split, this equates to 2,871,750 shares at AUD$5.10 per fully paid ordinary share.
Sport Supplements is a company which focused on products for sporting elites through to the everyday person exercising. It had an exclusive license agreement for the sale of an existing brand's products (soccer supplements) across 12 regions. Sports supplements had a full product suite targeting specific sports which is a huge differentiator in the sporting landscape, together with branding and marketing materials. The Company's acquisition of sports supplements further enhances the breadth of Gelteq's product offerings and its geographic reach across its key verticals.
Historical Financial Performance - For the year ended June 30, 2025 compared to the year ended June 30, 2024.
The Company presents and reports its financial statements in accordance with International Financial Reporting Standards (IFRS) and in Australian Dollars (AUD$ or A$), its presentation currency.
Historical information
The Company's financial statements for the year ended June 30, 2025 and 2024 have been audited by M&K CPAS, PLLC accordance with the standards of the Public Company Accounting Oversight Board ("PCAOB"). Management's discussion and analysis of our financial position and results of operations is based on our consolidated financial statements, which we have prepared in accordance with International Financial Reporting Standards and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations (collectively IFRSs).
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
Financial Position in AUD$:
|
As at June 30, 2025 |
As at June 30, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 344,648 | 24,522 | ||||||
| Trade and other receivables | 459,724 | 183,005 | ||||||
| Prepayments and other assets | 702,298 | 95,700 | ||||||
| Total Current Assets | 1,506,670 | 303,227 | ||||||
| Non-Current Assets | ||||||||
| Fixed assets | 15,907 | 16,642 | ||||||
| Intangible assets | 19,857,973 | 20,437,958 | ||||||
| Security deposits | 94,605 | - | ||||||
| Total Non-Current Assets | 19,968,485 | 20,454,600 | ||||||
| Total Assets | 21,475,155 | 20,757,827 | ||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Trade and other payables | 572,094 | 1,558,186 | ||||||
| Deferred Revenue | - | 125,359 | ||||||
| Borrowings, net | 4,203,855 | 2,084,152 | ||||||
| Derivative liability | 771,484 | - | ||||||
| Employee benefits provisions | 84,694 | 98,368 | ||||||
| Total Current Liabilities | 5,632,127 | 3,866,065 | ||||||
| Non-Current Liabilities | ||||||||
| Borrowings | 13,550 | 1,759,447 | ||||||
| Employee benefit provisions | 24,992 | 20,018 | ||||||
| Total Non-Current Liabilities | 38,542 | 1,779,465 | ||||||
| Total Liabilities | 5,670,669 | 5,645,530 | ||||||
| Net Assets | 15,804,486 | 15,112,297 | ||||||
| EQUITY | ||||||||
| Issued capital | 33,945,869 | 26,608,227 | ||||||
| Reserves | ||||||||
| Accumulated losses | (18,141,383 | ) | (11,495,930 | ) | ||||
| Total Equity (Deficit) | 15,804,486 | 15,112,297 | ||||||
Years ended June 30, 2025 and 2024
Extract of Statement of comprehensive income (in AUD$)
The following table summarizes the results of operations for the years ended June 30, 2025 and 2024:
| Year ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| AUD$ | AUD$ | |||||||
| Revenue from contract with customers | 165,645 | - | ||||||
| Cost of sales | (115,397 | ) | ||||||
| Research expenses | (628,606 | ) | (276,057 | ) | ||||
| Corporate & administrative expenses | (6,470,488 | ) | (3,417,022 | ) | ||||
| Other income | 403,393 | 146,884 | ||||||
| Loss before income tax | (6,645,453 | ) | (3,546,195 | ) | ||||
| Income tax expense | - | - | ||||||
| Loss after income tax | (6,645,453 | ) | (3,546,195 | ) | ||||
Revenue from contract with customers
During the year ended June 30, 2025, revenue from contracts with customers increased by AUD$165,645 to AUD$165,645 (June 30, 2024 nil). This increase is attributable orders customers placed in fiscal year 2024. In fiscal year 2024, orders were undelivered as some of our customers were experiencing cashflow difficulties and are unable to pay for their outstanding orders. These orders were manufactured, delivered, and paid in the fiscal year ending June 30, 2025. Also, one of our customer's orders was manufactured and deliver in the second quarter of the financial year ended June 30, 2024.
Research expenses
During the year ended June 30, 2025, research expenses increased by approximately 56% to AUD$628,606 as compared to the similar period last year (2024: AUD$352,549). The increase in research expenses is attributable to more product testing and validations conducted and more time spent to setup new research laboratory facilities. The higher volume of product testing and validations increase the amount of external costs borne by the Company, which resulted in higher research costs. Research expenses are those focused primarily on research projects.
Cash and cash equivalents
Years ended June 30, 2025 and 2024
Cash and cash equivalents increased by AUD$320,126 to AUD$344,648 at June 30, 2025 as compared to June 30, 2024, of AUD$24,522, as a result of an increase in cash used in operating activities, increase in cash used in investing activities, offset against increase in cash from financing activities.
For the year ended June 30, 2025, net cash used in operating activities increased by AUD$4,451,146 to AUD$5,521,617 relative to AUD$1,070,471 for the corresponding period in 2024.
Net cash used in investing activities increased by AUD$588,669 to AUD$736,839 relative to AUD$148,170 for the corresponding period in 2024.
Net cash from financing activities increased by AUD$5,609,572 to AUD$6,453,511 relative to AUD$843,939 for the corresponding period in 2024.
The net increase in cash and cash equivalents in fiscal year 2025 was AUD$195,055. Combining with effects of exchange rate changes on cash and cash equivalents of AUD$125,071, the total cash and cash equivalents at the end of the fiscal year 2025 is AUD$320,126.
Trade and other receivables
Trade and other receivables increased by AUD$276,719 to AUD$459,724 at June 30, 2025 as compared to AUD$183,005 as at June 30, 2024.
Inventories
There was no inventory as at both June 30, 2024 and 2025.
Intangible Assets
Intangible assets (including right-of-use assets) decreased by AUD$579,985 to AUD$19,857,973 at June 30, 2025 as compared to AUD$20,437,958 as at June 30, 2024, predominantly due to amortization of (AUD$1,219,103), for the year ended June 30, 2025 offset by increase in patents and trademarks of AUD$639,117.
Trade and Other payables
Trade and other payables decreased by AUD$986,092 to AUD$572,094 at June 30, 2025 as compared to AUD$1,558,186 as at June 30, 2024, Following the company's IPO, a portion of the proceeds was utilized to settle outstanding liabilities, including withholding tax on employee salary payments ("PAYG") repayment of $152,339, superannuation liability of $89,443 and trade creditor of $204,402.
Other Income
Other income for the year ended June 30, 2025 has increased by AUD$256,509 to AUD$403,393 as compared to AUD$146,884 for the year ended June 30, 2024. Other income comprises the Research and Development tax incentive and foreign exchange gain.
The Company is eligible for the Australian Government Research and Development Tax Incentive ("R&D Tax Incentive") that provides tax offsets for expenditure on eligible R&D activities. Under the program, the Company is entitled to a refundable R&D credit in Australia on the eligible R&D expenditure incurred on eligible R&D activities. The R&D Tax Incentive is overseen by the Australian Taxation Office and AusIndustry, a business advisory arm of the Australian government. The R&D Tax Incentive legislation, Income Tax Assessment Act 1997, Division 355, provides for a refundable R&D tax offset equal to the Company's corporate tax rate plus an 18.5% premium for companies with an aggregated turnover of below AUD$20 million.
The refundable R&D tax offset is accounted for under IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, as per which the R&D tax offset income is recognized when there is reasonable assurance that it will be received. It is recognized in the statement of comprehensive income in the same period that the related costs are recognized as expenses and relates to refundable amounts on approved expenses.
Deferred revenue
Deferred revenue as at June 30, 2025 stands at nil as compare to AUD$125,359 at June 30, 2024 reflecting a decrease of AUD$125,359. Deferred revenue represents amounts received for purchase orders that are yet to be delivered as at June 30, 2025.
Borrowings (current and non-current)
Borrowings at June 30, 2025, stands at AUD$4,217,405 representing: loans of AUD$18,636 received from directors of which AUD$5,086 is current and AUD$13,550 is non-current; shareholder loan of AUD$2,485,632 (current), convertible notes of AUD$2,037,413 (current) and loans from associated entities of AUD$156,828 (current). Borrowings during the June 30, 2025 financial year increased by AUD$2,133,253 as compared to AUD$2,084,152 for the year ended June 30, 2024, due to the repayment of convertible notes, which stands at AUD$772,975 as at June 30, 2025(June 30, 2024: nil), and debt discount which stands at AUD$11,279,184 as at June 30, 2025 (June 30,2024: nil).
Corporate and administrative expenses (in AUD)
| Year ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| AUD$ | AUD$ | |||||||
| Employment expenses | 481,072 | 875,579 | ||||||
| Corporate expenses | 548,847 | 222,641 | ||||||
| IPO related expenses | 584,947 | 166,804 | ||||||
| Depreciation and amortization expenses | 1,222,955 | 1,211,896 | ||||||
| Advertising & marketing expense | 204,077 | 18,200 | ||||||
| Consulting fees | 993,715 | 750 | ||||||
| Other expenses | 1,284,949 | 145,851 | ||||||
| Finance costs | 1,950,587 | 600,220 | ||||||
| Gain on extinguishment | (499,609 | ) | - | |||||
| Gain on derivative revaluation | (301,052 | ) | - | |||||
| Total Corporate and administrative expenses | 6,470,488 | 3,241,941 | ||||||
During the year ended June 30, 2025, total corporate and administrative expenses increased by AUD$3,228,547 to AUD$6,470,488 relative to AUD$3,241,941 in the similar period last year.
The AUD$3,228,547 increase in corporate and administrative expenses during the year ended June 30, 2025, relative to June 30, 2024, was predominantly due to increases in (i) corporate expenses of AUD$326,206 due to higher professional and management fees; (ii) IPO related expense of AUD$418,143; (iii) depreciation and amortization expense of AUD$11,059; (iv) advertising and marketing expense of AUD$185,877 due to more marketing activities; (v) consulting fee of AUD$992,965 due to an increase in external consultants used during the year; (vi) finance costs of AUD$1,350,367 due to additional interest relating to the shareholders loans and convertible notes. The increase in corporate and administrative expense was offset by a decrease in (i) employment expense of AUD$ 394,507 attributable to an decrease in permanent and contract staff, (ii) Gain on extinguishment of $499,609 and (iii) Gain on derivative revaluation finance of $301,052.
Liquidity and Capital Resources (in AUD$)
The following table summarizes our changes in working capital from June 30, 2024 to June 30, 2025:
|
June 30, 2025 |
June 30, 2024 | Change | ||||||||||
| Current Assets | AUD$ | 1,506,670 | AUD$ | 303,227 | AUD$ | 1,203,443 | ||||||
| Current Liabilities | AUD$ | 5,632,127 | AUD$ | 3,866,065 | AUD$ | 1,766,062 | ||||||
| Working Capital | AUD$ | (4,125,457 | ) | AUD$ | (3,562,838 | ) | AUD$ | (562,619 | ) | |||
As at June 30, 2025, there is a deficit of current assets over current liabilities of AUD$4,125,457 (June 30, 2024: deficit of current assets over current liabilities of AUD$3,562,838), however, we believe, that we would be able to meet our short-term obligations as they come due. The increase in the current liabilities for the year ended June 30, 2025 is due to outstanding shareholder loans with a balance of $1,938,778 as at June 30, 2025 which were reclassified as current liabilities from non-classified liabilities as at June 30, 2024. The increase in the current liabilities should be viewed in light of the extension of due dates for the shareholder loans to December 31, 2025, which occurred in October 2024 subsequent to June 30, 2024.
The following table sets out information as to consolidated cash flow information for the years ended June 30, 2025 and 2024 in AUD$.
| Years ended June 30 | ||||||||
| 2025 | 2024 | |||||||
| AUD$ | AUD$ | |||||||
| Net cash (used in) operating activities | AUD$ | (5,521,617 | ) | AUD$ | (1,070,471 | ) | ||
| Net cash (used in) investing activities | AUD$ | (736,839 | ) | AUD$ | (148,170 | ) | ||
| Net cash from financing activities | AUD$ | 6,453,511 | AUD$ | 843,939 | ||||
| Net cash inflow/(outflow) | AUD$ | 195,055 | AUD$ | (374,702 | ) | |||
| Effects of exchange rate changes on cash and cash equivalents | AUD$ | 125,071 | AUD$ | - | ||||
| Net increase/(decrease) in cash and cash equivalents | AUD$ | 195,055 | AUD$ | (374,702 | ) | |||
Years ended June 30, 2025 and 2024
As of June 30, 2025, we had cash and cash equivalents of AUD$344,648 compared to cash and cash equivalents of AUD$24,522 as of June 30, 2024. The increase in cash and cash equivalents of AUD$320,126 is attributed to the following activities:
For the year ended June 30, 2025, net cash used in operating activities was AUD$5,521,617 relative to AUD$1,070,471 for the corresponding period last year, registering an increase of AUD$4,451,146. The increase in cash used in operating activity is primarily attributable to an increase in payments to suppliers and employees of AUD$4,115,948 (June 30, 2025, AUD$5,488,749 compared to AUD$1,372,801 at June 30, 2024) and interest and other finance costs paid of AUD$32,141 (June 30, 2025, AUD$32,868 compared to AUD$727 at June 30, 2024).
For the year ended June 30, 2025, net cash used in investing activities increased by AUD$588,669 due to payment towards acquisition of intangibles, and proceeds from release of security deposits.
For the year ended June 30, 2025, net cash from financing activities increased by AUD$5,609,572 to AUD$6,453,511 (June 30, 2024: AUD$843,939) primarily due to the increase in proceeds from issue of shares (June 30, 2025, $AUD7,913,463 compared to nil in June 30, 2024), and proceeds from convertible notes (June 30, 2025, AUD$1,327,262 compared to AUD$855,834 in June 30, 2024) offset by decrease in repayment of convertible notes (June 30, 2025, AUD$772,975 compared to nil in June 30, 2024), repayment of shareholders loan (June 30, 2025, AUD$71,517 compared to nil in June 30, 2024), and capital issue costs (June 30, 2025, AUD$1,942,722 compared to nil in June 30, 2024).
For the year ended June 30, 2025, effects of exchange rate changes on cash and cash equivalents increased by AUD$125,071 to AUD$125,071 (June 30, 2024: nil) due to an increase in foreign currency transactions.
Cash Flow
In January 2023, we negotiated with holders of our unsecured loans to extend the terms of the loans for another 12 months on the same terms from July 2023 until July 2024. In October 2023, all holders of the unsecured loans have agreed to further extend the terms of the loans until December 31, 2024. This extension further reduces our immediate or short term liabilities in the fiscal years ending June 30, 2023 and 2024. We expect to require further extensions for such loans for the year ending June 30, 2026 to reduce the short term liability if the Company determines this is needed.
On October 3, 2023, our board of directors approved the issuance of convertible notes (the "October 2023 Convertible Note") and the Company closed the October 2023 Convertible Note offering raising approximately AUD$1,004,889 (AUD$410,000 plus USD$400,000 calculated at the daily exchange rate when each amount was received). Each October 2023 Convertible Note shall have a face value of AUD$1, an annual interest rate of 12% and have a maturity date of December 31, 2025. Each holder of a October 2023 Convertible Note may, prior to 90 days of their maturity date and pursuant to the terms of the October 2023 Convertible Note, either elect to convert their October 2023 Convertible Note into Ordinary Shares or redeem their October 2023 Convertible Note for an Australian cash payment. The December 31, 2025 repayment date of the October 2023 Convertible Notes was intended to alleviate the Company's short term liabilities and the Company expects to extend the term of such notes to reduce the short term liability as the Company determines.
On March 26, 2024, our board of directors approved the issuance of convertible notes (the "February 2024 Convertible Note") to raise up to AUD$400,000. The Company closed the February 2024 Convertible Note offering, raising AUD$357,338 (approximately AUD$75,000 plus approximately USD$185,000 calculated at the daily exchange rate when each amount was received). Each February 2024 Convertible Note shall have a face value of AUD$1, an annual interest rate of 6% and have a maturity date of December 31, 2025. Each holder of a February 2024 Convertible Note may, prior to 90 days of their maturity date and pursuant to the terms of the February 2024 Convertible Note, either elect to convert their February 2024 Convertible Note into Ordinary Shares or redeem their February 2024 Convertible Note for an Australian cash payment. The December 31, 2025 repayment date of the February 2024 Convertible Notes are intended to alleviate the Company's short term liabilities.
On May 27, 2024, our board of directors approved the issuance of convertible notes (the "May 2024 Convertible Note") to raise up to AUD$1,000,000. Each May 2024 Convertible Note had a face value of AUD$1, an annual interest rate of 6% and have a maturity date of December 31, 2025. Each holder of a May 2024 Convertible Note may, prior to 90 days of their maturity date and pursuant to the terms therein, either elect to convert their May 2024 Convertible Note into Ordinary Shares at a conversion discount rate of 22% or redeem their May 2024 Convertible Note for an Australian cash payment. As of the date of this Annual Report, the Company has received approximately AUD$1million (approximately AUD$315,000 plus approximately USD$450,000 calculated at the daily exchange rate when each amount was received) through the issuance of the May 2024 Convertible Notes.
The Company closed its initial public offering on October 30, 2024, issuing 1.3 million ordinary shares at an issue price of US$4.00 per share and raising USD$5.2 million (approximately AUD$7.95 million) before deducting underwriting discounts and offering expenses. To reduce the Company's debt position and improve its balance sheet, the Company in January 2025 offered existing convertible note and shareholder loan holders the ability to convert their loans into Ordinary Shares, to be repaid or continue to maturity. For the then outstanding convertible notes, a total of AUD $822,184 (approximately USD$534,420) was converted in March 2025 at the election of such noteholders into Ordinary Shares at a share price of USD$2.14. In March 2025, the Company paid to loan holders an aggregate of AUD$772,136 (approximately USD$501,888) in order to redeem their loans. The remaining principal and interest on the outstanding shareholder loans will accrue until maturity in December 2025unless extended further.
On February 21, 2025, our board of directors approved the issuance of convertible notes (the "February 2025 Convertible Note") to raise up to AUD$1,500,000. Each February 2025 Convertible Note had a face value of AUD$1, an annual interest rate of 20% and have a maturity date of July 1, 2026. Each holder of a February 2025 Convertible Note may at any time elect to convert their February 2025 Convertible Note into Ordinary Shares at a conversion price of USD$2.00. Each holder of a February 2025 Convertible Note may, prior to 90 days of their maturity date and pursuant to the terms therein, either elect to convert their February 2025 Convertible Note into Ordinary Shares at a conversion price of USD$2.00 or redeem their February 2025 Convertible Note for an Australian cash payment. As of the date of this Annual Report, the Company has received approximately AUD$580,000 (approximately USD$377,000) through the issuance of the February 2025 Convertible Notes.
On March 13, 2025, the Company entered into a purchase agreement (the "ELOC Purchase Agreement") in connection with an Equity Financing Line of Credit ("ELOC") and a registration rights agreement with Lincoln Park Capital Fund, LLC ("Lincoln Park"), pursuant to which Lincoln Park agreed to purchase from the Company, from time to time, up to $12,000,000 of its Ordinary Shares (the "ELOC Shares"), subject to certain limitations set forth in the ELOC Purchase Agreement. On August 29, 2025, the Company's Registration Statement on Form F-1 registering the resale of the ELOC Shares was declared effective. The Company expects to utilize proceeds from the ELOC for working capital and other general corporate purposes.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result in substantial dilution for our current shareholders. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then-outstanding. We may issue additional Ordinary Shares or securities convertible into or exchangeable or exercisable for our Ordinary Shares in connection with hiring or retaining personnel, option or warrant exercises, future acquisitions or future placements of our securities for capital-raising or other business purposes. The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our Ordinary Shares to decline and existing shareholders may not agree with our financing plans or the terms of such financings. In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition. Furthermore, any additional debt or equity financing that we may need may not be available on terms favorable to us, or at all. If we are unable to obtain such additional financing on a timely basis, we may have to curtail our research and development activities and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, or we may have to cease our operations, which would have a material adverse effect on our business, results of operations and financial condition.