How CONNEQT Health Is Managing $2.6M Cash Burn with $2M Convertible Note

Quarterly Cash Flow Overview

CONNEQT Health Limited, formerly Cardiex Limited, disclosed its cash flow report for the quarter ending 30 September 2025, revealing a net operating cash outflow of $2.624 million. Despite this, the company managed to bolster its cash position through financing activities, notably receiving a $2 million loan advance via a convertible note subscription agreement with C2 Ventures Pty Ltd, a company owned by two of its directors.

At the close of the quarter, CONNEQT Health held $2.711 million in cash and cash equivalents, supported by fully drawn financing facilities totaling $4.593 million. The company’s cash burn reflects ongoing investments in research and development, product manufacturing, and operational costs.

Operational Restructuring and Sales Momentum

Significant operational restructuring has been a key theme for CONNEQT Health this year. The company centralized its engineering and development teams from the U.S. and offshore locations to Sydney, achieving a roughly 30% reduction in its cost base compared to the previous year. This streamlining effort is already evident in the improved cash flow trends observed in the September quarter.

On the revenue front, the CONNEQT Pulse product continues to gain traction, delivering over 50% quarter-on-quarter sales growth. Alongside the established ATCOR business and a recently announced clinical trial, these revenue streams are contributing positively to the company’s gross margin and cash flow outlook.

Financing and Future Funding Prospects

CONNEQT Health’s financing strategy includes a mix of loan facilities and convertible notes. The company entered into a new R&D Term Loan Facility with Mitchell Asset Management Pty Ltd, secured against anticipated R&D tax incentive refunds. In the current quarter, the company received $2.912 million from financing activities, including the $2 million convertible note from C2 Ventures.

The company expects to receive its FY25 R&D Income Tax Incentive Refund of approximately $1.6 million in the second quarter of the next financial year. This refund is earmarked to repay the R&D loan facility in full, with any surplus funds retained to support ongoing operations and potential further financing initiatives.

Outlook and Operational Continuity

Despite the current cash outflow and limited runway of just over one quarter based on available funding, CONNEQT Health’s management remains confident in the company’s ability to sustain operations. The combination of accelerating sales growth, cost reductions, and anticipated tax refunds underpin this optimism. Additionally, the company has demonstrated a capacity to raise capital when needed, as evidenced by recent financing arrangements.

Shareholder approval is pending for the conversion of the convertible notes into equity, a key step that will influence the company’s capital structure going forward. Investors will be watching closely for updates on this front and the company’s ability to transition to positive cash flow in upcoming quarters.