Bod Science Limited reports a modest net cash inflow of $51,000 for Q2 FY2025, supported by increased customer receipts and intellectual property sales, while navigating a complex Deed of Company Arrangement and pending acquisition.
- Net cash inflow from operating activities of $51k in Q2 FY2025
- Customer receipts rose 14% quarter-on-quarter to $219k
- Sale of intellectual property assets generated $125k proceeds
- Company remains suspended under DOCA with administration ongoing
- Acquisition of Biortica Agrimed Limited shares pending shareholder approval
Financial Performance Amid Restructuring
Bod Science Limited (ASX: BOD), a cannabis-focused drug development company, has reported a net cash inflow from operating activities of $51,000 for the quarter ended 31 December 2024. This marks a notable improvement from the previous quarter's slight outflow of $4,000, driven primarily by increased customer receipts and proceeds from the sale of intellectual property assets.
Quarterly receipts from customers increased by 14% to $219,000, reflecting a 24% rise in sales volumes due to the introduction of new product SKUs. However, this figure remains 23% below the prior corresponding period, largely attributable to Bod's exit from its premium skincare business during FY2024, which had previously contributed significant seasonal sales.
Navigating the Deed of Company Arrangement
The company continues to operate under a Deed of Company Arrangement (DOCA) executed in April 2024, with Andrew Barnden appointed as Deed Administrator. Bod remains suspended from trading on the ASX throughout this process. A key component of the DOCA involves the proposed acquisition of Biortica Agrimed Limited, which Bod agreed to in November 2024 through a binding conditional Share Purchase Agreement.
The acquisition is contingent upon shareholder approval and compliance with ASX Listing Rules, with an extraordinary general meeting now expected in early to mid-March 2025. This delay follows Biortica's postponement in meeting ASX requirements, particularly the audit of its financial statements for the year ended 30 June 2024.
Intellectual Property Sales and Funding Support
In November 2024, Bod completed the sale of certain intellectual property assets, generating $125,000 in proceeds and reimbursing $51,000 in previously incurred expenses. This transaction contributed significantly to the quarter's positive cash flow.
Additionally, Biortica has been funding Bod's ongoing trading costs as part of their agreement, reflected as $235,000 in other operating inflows. This financial support has helped Bod reduce payments across all categories compared to the prior corresponding period, following its entry into voluntary administration in November 2023.
Outlook and Market Implications
While Bod's financial position shows cautious improvement, the company’s future hinges on the successful completion of the DOCA and the Biortica acquisition. The upcoming extraordinary general meeting will be a critical juncture, determining whether Bod can re-establish compliance with ASX listing requirements and move forward with its strategic plans.
Investors will be watching closely for updates on the shareholder vote and any further developments in the integration with Biortica, which could reshape Bod’s operational and financial trajectory.
Bottom Line?
Bod Science’s modest cash inflow and pending acquisition set the stage for a pivotal shareholder vote that could redefine its future.
Questions in the middle?
- Will shareholders approve the Biortica acquisition at the upcoming extraordinary general meeting?
- How will the integration with Biortica impact Bod’s operational focus and financial stability?
- What are the risks if Biortica fails to meet ASX compliance requirements in time?