Executive Summary / Key Takeaways

• Australian Oilseeds Holdings Limited (COOT) is carving a niche as a leader in chemical-free, non-genetically modified organism (non-GMO), cold-pressed edible oils, aligning its strategy with the growing global demand for sustainable and healthier food products.
• The company demonstrated robust top-line growth in fiscal year 2025, with total sales revenue increasing by 23.64% to AUD 41.70 million, primarily fueled by a 58.40% surge in retail oil sales through strategic supermarket partnerships and new product introductions.
• Despite revenue growth, COOT faces significant financial hurdles, including a net loss of AUD 1.46 million in FY2025, a net current liability position of AUD 13.06 million, and ongoing Nasdaq listing compliance challenges, which collectively raise substantial doubt about its ability to continue as a going concern.
• Strategic initiatives, such as a planned expansion of its Cootamundra facility's processing capacity from 33,000 to 70,000 metric tons per annum and a new joint venture for distribution in the burgeoning Indian market, are critical for future growth and market diversification.
• Investors must weigh COOT's differentiated product offering and strategic expansion into high-growth, health-conscious markets against its urgent need for capital, effective cost management, and successful resolution of its Nasdaq listing status to realize long-term value.

The Seed of Opportunity: Australian Oilseeds' Sustainable Vision

Australian Oilseeds Holdings Limited (NASDAQ:COOT) stands at the forefront of a burgeoning segment within the global food industry, focusing on the manufacture and sale of chemical-free, non-GMO, sustainable edible oils and derived products. Operating primarily through its Australian subsidiary, Australian Oilseeds Investments Pty Ltd. (AOI), the company has cultivated a vision centered on transitioning towards a renewable and chemical-free economy, addressing growing consumer concerns about health and environmental impact. This strategic imperative is deeply rooted in AOI's history, which began in 1991 with the commissioning of its first oilseed processing plant in 1992, initially crushing over 2,000 metric tons. Over two decades, AOI evolved into Australia's largest cold-pressing oil plant, specializing in GMO-free conventional and organic oilseeds. The company’s products, marketed under the "Good Earth Oils" trademark, reach consumers in Australia, New Zealand, Japan, and the United States.

The broader edible oils market is experiencing a significant shift, driven by increasing consumer awareness of health and sustainability. The food industry demands healthier oils for cooking and dining, a trend that plays directly into COOT's core strengths. Australian oilseed production, known for its quality and proximity, is well-positioned to supply the rapidly expanding consumer export markets of the Asia-Pacific region, alongside satisfying domestic demands. This market dynamic, coupled with the company's commitment to sustainable, renewable, and organic farming methods, sets the stage for COOT's differentiated approach in a competitive landscape.

The Cold-Pressed Advantage: Technology as a Moat

COOT's core competitive advantage is its proprietary cold-pressing extraction technology, a process that distinguishes its products in a crowded market. This method involves pressing and grinding oilseeds without the use of chemicals or solvents, maintaining temperatures below 50 degrees Celsius (122°F). This meticulous process ensures that the resulting oils and meals retain their natural nutritional values, antioxidants, and healthy omega fatty acids, including omega 3 and omega 6. These attributes are crucial for consumers seeking products that contribute to lower serum cholesterol, liver protection from oxidative damage, and suppressed oxidative stress. Furthermore, the avoidance of harmful solvents like hexane and petroleum ether, commonly used in conventional oil extraction, positions COOT's products as a safer and cleaner alternative.

The company's commitment to technological innovation extends beyond its core extraction process. AOI continuously engages in research and development to improve cold-pressed oil extraction from various oilseeds, including safflower and sunflower, and explores the potential of plant-based meats and canola as an ingredient. Operationally, the Cootamundra facility, which is the largest cold-pressing oil plant in Australia, boasts a processing capacity of over 70,000 metric tons per annum. The plant has also partially adopted renewable solar energy, with a 568-kilowatt peak solar power system that abates 42.20 metric tons of CO2 per month, demonstrating a tangible commitment to its goal of becoming a carbon-neutral plant and aligning with UN Sustainable Development Goals.

For investors, this technological differentiation translates into a robust competitive moat. The premium quality, health benefits, and environmental credentials of COOT's products enable stronger brand loyalty and potentially higher average selling prices, contributing to better margins in niche markets. This strategic positioning allows COOT to differentiate itself from conventional oil producers and appeal to a growing segment of health and sustainability-conscious consumers, underpinning its long-term growth strategy and market penetration efforts.

Harvesting Growth: Financial Performance and Operational Momentum

Australian Oilseeds Holdings Limited reported a significant increase in total sales revenue for the fiscal year ended June 30, 2025, reaching AUD 41.70 million, an AUD 8 million or 23.64% increase compared to AUD 33.7 million in the prior year. This growth was primarily driven by expanded sales within its existing customer base and the increased reach of its Good Earth Oils (GEO) brands to end-users.

A key driver of this revenue surge was the retail oils category, which saw a remarkable increase of AUD 7.3 million, or 58.40%, to AUD 19.89 million in 2025. This growth was largely attributable to new supply contracts with major Australian supermarket chains such as Costco (COST), Woolworths (WOW), and Coles (COL). The company also strategically introduced three new Stock Keeping Units (SKUs) in 2024, supported by integrated marketing campaigns with these supermarkets, further boosting retail consumer engagement. This shift towards retail oils compensated for a AUD 0.88 million, or 7.70%, decrease in wholesale oils revenue, as finished goods were directed to the higher-margin retail channel. The high protein meals segment also contributed positively, with revenue increasing by AUD 1.68 million, or 18.40%, to AUD 10.86 million, reflecting increased market awareness of the company's high-quality, chemical-free product concept among local farmers, wholesalers, and distributors.

Despite this robust top-line performance, profitability faced headwinds. Gross profit decreased by AUD 2.45 million, or 41.48%, to AUD 3.46 million in 2025 from AUD 5.92 million in 2024. This decline was primarily due to a substantial increase in the cost of sales, which rose by AUD 10.4 million, or 37.50%, to AUD 38.2 million. The company attributed this to higher costs for raw materials, packing, and labor, without a corresponding increase in sales prices. Consequently, the company reported a net loss of AUD 1.46 million for the year ended June 30, 2025, a significant improvement from the AUD 21.23 million loss in 2024, which included a substantial recapitalization expense. Other income also decreased by AUD 0.6 million, or 84.60%, mainly due to a reduction in transaction costs payable related to the EDOC purchase in the prior year. Finance expenses increased by AUD 0.62 million, or 74.20%, largely due to the utilization of an AUD 8 million trade facility from Commonwealth Bank of Australia for canola oilseed purchases, the amortization of a convertible note discount, and interest accrual on promissory notes.

Cultivating Capital: Liquidity and the Going Concern Challenge

COOT's financial health presents a critical challenge, as evidenced by a net current liability position of AUD 13.06 million as of June 30, 2025. The company also experienced net cash outflows from operating activities of AUD 966,511 for fiscal year 2025, a reversal from the AUD 2.18 million net cash inflow in the prior fiscal year. These factors, coupled with recurring losses, raise substantial doubt about the company's ability to continue as a going concern unless it can successfully generate sufficient cash from operations and secure additional funding.

As of June 30, 2025, COOT had cash and cash equivalents of AUD 2.31 million. To address its liquidity needs, the company relies on several funding avenues, including drawing down additional long-term debt from Commonwealth Bank of Australia (CBA), which has provided a total facility loan of AUD 14 million with AUD 6.78 million unused as of June 30, 2025. Further, COOT has the ability to draw down an additional US$6 million of redeemable debentures from existing PIPE investors or utilize a US$50 million equity line of credit (ELOC) once its registration statement is lodged. The company also has outstanding legacy costs of AUD 2.77 million, promissory notes to American Physicians LLC totaling AUD 1.54 million, and an AUD 1.17 million convertible note to PIPE Investor ARENA. Foreign currency payments related to EDOC legacy costs significantly increased to AUD 3.01 million for the year ended June 30, 2025, impacting finance expenses.

The company's public listing on Nasdaq, following a reverse acquisition of EDOC Acquisition Limited on March 21, 2024, has introduced additional compliance pressures. COOT received a Nasdaq notification on May 27, 2025, for non-compliance with the $1 minimum bid price requirement, with a deadline of November 24, 2025, to regain compliance. Additionally, on June 10, 2025, Nasdaq notified the company of its failure to regain compliance with the $10 million minimum stockholders' equity requirement. While an extension was granted until September 30, 2025, to comply with a $2.50 million equity rule, the company reported AUD 2.60 million in shareholder equity as of July 22, 2025, indicating a precarious position. Management plans to maintain this minimum equity through debt conversion and increased revenues. A reverse share split was approved by shareholders on July 30, 2025, as a potential measure to address the bid price deficiency.

Expanding Horizons: Strategic Initiatives and Future Outlook

Despite its financial challenges, COOT is actively pursuing strategic initiatives to capitalize on market opportunities and drive future growth. A cornerstone of its forward-looking strategy is the planned expansion of its Cootamundra facility's cold-pressing capacity from 33,000 metric tons to 70,000 metric tons per annum. This expansion is intended to address the increased global demand for sustainable, premium cold-pressed, and non-GMO products. However, management has cautioned that revenue may not achieve budget in FY2026, and operations may be substantially reduced from original projections, as capital is expended for this expansion and cash flows are directed towards legacy payments. The utilization of working capital for these legacy payments may also affect the company's ability to procure and hold canola seeds, potentially impacting sales.

International expansion is another critical pillar of COOT's growth strategy. On October 28, 2025, the company announced a joint venture with Rajashri Foods Pvt. Ltd. to distribute its GEO line of cold-pressed, chemical-free canola oil and olive oil across India. This partnership leverages Rajashri Foods' extensive distribution network and over 80 years of food manufacturing and distribution experience, complementing GEO's existing presence in Japan, China, Vietnam, and Thailand. This move into India, the world's largest importer of vegetable oils with a growing middle class and increasing awareness of healthier food products, represents a significant growth market for COOT. The company has also launched its GEO consumer brand on Zong Shang Jio, a Chinese e-commerce platform connecting to over 5 million users, further strengthening its global footprint.

Weighing the Risks: A Balanced Investment Perspective

Investing in Australian Oilseeds Holdings Limited carries a notable degree of risk, primarily stemming from its precarious financial position and the highly competitive nature of the edible oils market. The explicit "going concern" doubt, driven by recurring operational losses and a significant net current liability position, highlights the urgent need for successful capital raises and improved operational cash flow. The company's ability to draw down additional debt and equity, including the US$50 million ELOC, is paramount to its survival.

Furthermore, COOT faces ongoing scrutiny from Nasdaq regarding its listing compliance, specifically the $1 minimum bid price and the $2.5 million minimum stockholders' equity requirements. While management is taking steps, including a potential reverse stock split, failure to maintain compliance could lead to delisting, severely impacting liquidity and investor confidence.

Operationally, COOT's dependence on a small group of local farmers for oilseeds and a material concentration of revenue from a few key customers (the top five customers accounted for 62.40% of total sales in 2025) exposes it to significant supply chain and customer relationship risks. Geopolitical risks, inflation, and adverse weather conditions in Australia, such as droughts and floods, could also disrupt operations, increase raw material costs, and negatively impact profitability.

In the competitive landscape, COOT, despite its technological differentiation, is a smaller player compared to global agribusiness giants like Archer Daniels Midland (ADM) and Bunge Limited (BG). These larger competitors possess significantly greater financial, technical, marketing, and distribution resources, enabling them to respond more quickly to market changes and adopt aggressive pricing strategies. While COOT's focus on chemical-free, non-GMO products provides a niche advantage, it may struggle to compete on scale and cost efficiency with these established players. The company's lack of product and business diversification also makes its future revenues and earnings more susceptible to fluctuations within the agricultural industry.

Conclusion

Australian Oilseeds Holdings Limited presents a compelling, albeit high-risk, investment narrative centered on its leadership in sustainable, cold-pressed edible oils. The company's commitment to chemical-free, non-GMO products, underpinned by its advanced cold-pressing technology and a strategic focus on environmental sustainability, positions it favorably within a growing health-conscious market. Recent financial performance, particularly the strong growth in retail oil sales, demonstrates the market's appetite for its differentiated offerings.

However, the investment thesis is inextricably linked to COOT's ability to overcome its immediate financial and listing challenges. Successful execution of its capacity expansion plans, effective management of legacy costs, and securing necessary capital will be critical determinants of its long-term viability. While the competitive landscape is dominated by larger, more diversified players, COOT's technological edge and strategic expansion into high-growth international markets, such as India, offer a pathway to carve out a sustainable and profitable niche. Investors should closely monitor the company's progress on these fronts, as its ability to stabilize its financial foundation and leverage its unique product proposition will ultimately define its trajectory in the global edible oils market.