How Will Multistack’s Loan Repayments Shape Its Future Amid Acquisition Talks?

Quarterly Cash Flow Overview

Multistack International Limited has disclosed its cash flow report for the quarter ended 30 June 2025, revealing a net cash outflow from operating activities of AUD 262,290. Despite this, the company maintains a healthy cash position with AUD 1.54 million in cash and cash equivalents at quarter-end, down from AUD 2.92 million at the previous quarter's start.

The operating cash outflow reflects ongoing expenditures in staff costs and administration, with no receipts from customers reported during the quarter. This continued negative cash flow underscores the challenges the company faces in generating immediate operating income.

Debt Repayment and Asset Sale Impact

A significant highlight of the quarter was the full repayment of a USD 650,000 loan (approximately AUD 1.09 million) from A.C.R. Equipment (HK) Ltd, a related party. Additionally, the company settled a prior loan and accrued interest amounting to AUD 3.55 million through an asset sale involving Verdicorp’s assets, including the ORC technology. This transaction not only extinguished a substantial liability but also marked a strategic shift in the company’s asset portfolio.

These repayments have materially improved Multistack’s financial leverage, reducing interest burdens and potentially easing future financing costs. However, the company still carries a non-interest bearing, unsecured loan of AUD 696,000 from the same related party.

Strategic Acquisition Discussions

Multistack is actively engaged in discussions with SuperLink regarding the acquisition of all shares in Multistack Australia Pty Ltd. This potential transaction is subject to mutual agreement, completion of definitive documentation, shareholder approval, and regulatory compliance including an independent expert’s report. The acquisition could represent a pivotal development, potentially reshaping the company’s operational footprint and strategic direction.

During this period, Multistack has committed to continuing its business operations prudently and maintaining compliance with ASX reporting requirements, signaling a focus on stability amid transition.

Liquidity and Outlook

Despite the negative operating cash flow, the company asserts it has sufficient cash reserves to cover its net cash outflows for at least the next two quarters. This buffer provides some reassurance to investors, though the persistence of negative cash flows highlights the need for ongoing financial discipline or additional capital raising in the future.

Investors will be watching closely how the acquisition talks progress and whether the company can pivot towards positive operating cash flows as it navigates this critical phase.