REG - Wellnex Life Limited - Q1 FY26 Quarterly Report and Appendix 4C
20/10/2025 07:00
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RNS Number : 0007E Wellnex Life Limited 20 October 2025
ASX/AIM Announcement
20 October 2025
Wellnex Life Limited (ASX/AIM: WNX) ("Wellnex Life" or the "Company") is
pleased to provide the following operational and business update along with
its Appendix 4C for the quarter ended 30 September 2025 (unaudited). Executive
Chairman, Ash Vesali, has separately today provided an update to shareholders
on progress and plans.
Highlights
· Cash receipts of $4.5 million for the quarter ended 30 September
2025 (Q1 FY26) compared to $6.5 million for the previous quarter (Q4 FY25)
· Sales for Q1 FY26 were $5.4 million, a decrease of 18.2% compared
to the previous quarter (Q4 FY25: $6.6 million)
· Additional debt funding facilities of up to $5.35 million
secured, with $4.1 million drawn down at the end of Q1 FY26
· Wellnex continued its internal review to identify core
operational efficiencies and cost-saving opportunities, and has initiated a
process to exit medicinal cannabis segment
Sales for Q1 FY26 were $5.4 million, down 18.2% from the previous quarter,
primarily due to delayed IP licensing revenue, which declined 82.3%, now
expected to be invoiced and received in the coming months. Brand
sales grew 4.1% over the same period. Gross profit was 35.2% ($1.8
million), compared to 37.9% ($2.5 million) in the prior quarter.
Revenue overview:
Q1 FY26 Q4 FY25 % Change
Brands $5.1 million $4.9 million 4.1%
IP Licensing $0.3 million $1.7 million (82.3%)
Total $5.4 million $6.6 million (18.2%)
Gross Profit $1.8 million $2.5 million (28.0%)
The Company reported cash receipts of $4.5 million for Q1 FY26 and a net
operating cash flow loss from operations of $2.9 million. The operating loss
reflects increased product manufacturing costs, including a one-off raw
material purchase for Pain Away with the intention of increasing margins over
the longer term, repayment of long-term liabilities and lower quarterly cash
receipts.
During the quarter, the Company recorded advertising and marketing cost of
$0.8 million, compared to $0.6 million for the prior quarter. Staff
costs decreased to $0.9 million, down from $1.0 million in the prior
quarter.
Increase in administrative and corporate costs for the period was a direct
result of the establishment of the new loan facility with Reach Wholesale
("Reach").
Proceeds from borrowings of $7.0 million relate to the new loan facility with
Reach and funding provided by Scottish Pacific Business Finance Pty Ltd
("ScotPac"), with repayments of $3.5 million related to the ScotPac facility
including the reduction in the trade facility from $2.5 million to $1 million.
Payments made to related parties as outlined under section 6.1 of the Appendix
4C relate to:
· the customary director fees and salaries ($370k);
· repayment of costs for raw material and packaging and interest to
Homart, an entity associated with Jeffrey Yeh, a director of the Company
($1.28m); and
· rent and logistics costs to entities associated with Zack
Bozinovski, a director of the Company ($126k).
During the quarter, Wellnex continued its internal review to identify core
brand assets, operational efficiencies, and cost-saving opportunities aimed
at maximising revenue, margins and operational profitability. The review will
continue through FY26, with initial benefits expected to materialise
throughout FY26. Further details are set out in the separate Chairman's
letter.
As part of the Company's ongoing internal business review, the Board has
resolved to cease all operations under the Wellness Life brand in the
medicinal cannabis market. While the Australian medicinal cannabis sector
continues to present opportunities, it also demands substantial ongoing
investment and has become increasingly competitive.
The Company has initiated the process to fully exit all activities associated
with the medicinal cannabis segment, including the closure of related joint
ventures. In FY25, the medicinal cannabis operations contributed less than 1%
of the group total revenue and are not expected to have any material impact
going forward.
Appendix 4C
Quarterly cash flow report for entities
subject to Listing Rule 4.7B
Name of entity
WELLNEX LIFE LIMITED
ABN Quarter ended ("current quarter")
77 150 759 363 30 September 2025
Consolidated statement of cash flows Current quarter $A'000 Year to date
(3 months)
$A'000
1. Cash flows from operating activities 4,536 4,536
1.1 Receipts from customers
1.2 Payments for (117) (117)
(a) research and development
(b) product manufacturing and operating costs (4,586) (4,586)
(c) advertising and marketing (809) (809)
(d) leased assets
(e) staff costs (881) (881)
(f) administration and corporate costs (889) (889)
1.3 Dividends received (see note 3) - -
1.4 Interest received 0 0
1.5 Interest and other costs of finance paid (86) (86)
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other (GST refund/(paid)) (147) (147)
1.9 Net cash from / (used in) operating activities (2,979) (2,979)
2. Cash flows from investing activities - -
2.1 Payments to acquire or for:
(a) entities
(b) businesses
(c) property, plant and equipment - -
(d) investments - -
(e) intellectual property -
(f) other non-current assets - -
2.2 Proceeds from disposal of: - -
(a) entities
(b) businesses - -
(c) property, plant and equipment - -
(d) investments - -
(e) intellectual property - -
(f) other non-current assets - -
2.3 Loan repayment from other entity - -
2.4 Dividends received (see note 3) - -
2.5 Other (cash acquired from CBDG Administration) -
2.6 Net cash from / (used in) investing activities - -
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
3.2 Proceeds from issue of convertible debt securities - -
3.3 Proceeds from exercise of options - -
3.4 Transaction costs related to issues of equity securities or convertible debt (819) (819)
securities
3.5 Proceeds from borrowings 6,942 6,942
3.6 Repayment of borrowings (3,467) (3,467)
3.7 Transaction costs related to loans and borrowings - -
3.8 Share applications to be refunded - -
3.9 Other (repayment of lease liabilities) - -
3.10 Net cash from / (used in) financing activities 2,656 2,656
4. Net increase / (decrease) in cash and cash equivalents for the period 497 497
4.1 Cash and cash equivalents at beginning of period
4.2 Net cash from / (used in) operating activities (item 1.9 above) (2,979) (2,979)
4.3 Net cash from / (used in) investing activities (item 2.6 above)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 2,656 2,656
4.5 Effect of movement in exchange rates on cash held - -
4.6 Cash and cash equivalents at end of period 174 174
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
$A'000
$A'000
5.1 Bank balances 174 497
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (funds held in trust) - -
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 174 497
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included 1,776
in item 1
6.2 Aggregate amount of payments to related parties and their associates included -
in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements available to the entity.
$A'000
$A'000
Add notes as necessary for an understanding of the sources of finance available to the entity.
7.1 Loan facilities 8,215 (5,790)
7.2 Credit standby arrangements - -
7.3 Other (Director's loan) 2,513 (2,525)
7.4 Total financing facilities 10,728 (8,315)
7.5 Unused financing facilities available at quarter end 2,413
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
1.
Sec
ure
d
Rev
olv
ing
Tra
de
and
Deb
tor
Fac
ili
ty
wit
h
Sco
tti
sh
Pac
ifi
c
of
$3.
8
mil
lio
n
Int
ere
st
Rat
e:
BBS
Y
plu
s
6.8
%.
2.
Sec
ure
d
loa
n
fac
ili
ty
wit
h
Rea
ch
Who
les
ale
of
up
to
$5.
35
mil
lio
n
at
14%
per
ann
um
exp
iri
ng
Aug
ust
202
7.
The
amo
unt
sho
wn
in
Sec
tio
n 7
is
for
the
amo
unt
dra
wn
dow
n
($4
.1
mil
lio
n)
at
the
clo
se
of
the
per
iod
plu
s
fur
the
r
$31
5,0
00
tha
t
is
ava
ila
ble
to
the
com
pan
y
if
req
ues
ted
.
Any
fur
the
r
dra
wdo
wns
of
up
to
$87
5,0
00
is
at
the
abs
olu
te
dis
cre
tio
n
of
len
der
wit
h
no
gua
ran
tee
s
of
fut
ure
dra
wdo
wns
.
8. Estimated cash available for future operating activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) (2,979)
8.2 Cash and cash equivalents at quarter end (item 4.6) 174
8.3 Unused finance facilities available at quarter end (item 7.5) 2,413
8.4 Total available funding (item 8.2 + item 8.3) 2,587
8.5 Estimated quarters of funding available (item 8.4 divided by item 8.1) 0.9
No
te
:
if
th
e
en
ti
ty
ha
s
re
po
rt
ed
po
si
ti
ve
ne
t
op
er
at
in
g
ca
sh
fl
ow
s
in
it
em
1
.9
,
an
sw
er
it
em
8
.5
as
"N
/A
".
Ot
he
rw
is
e,
a
fi
gu
re
fo
r
th
e
es
ti
ma
te
d
qu
ar
te
rs
of
fu
nd
in
g
av
ai
la
bl
e
mu
st
be
in
cl
ud
ed
in
it
em
8
.5
.
8.6 If item 8.5 is less than 2 quarters, please provide answers to the following
questions:
8.6.1 Does the entity expect that it will continue to have the current
level of net operating cash flows for the time being and, if not, why not?
No. In the prior quarter there was large one off large purchase of inventory
of $1.2 million, repayment of long term liabilities of c.$1.5 million to
strengthen the balance sheet and the company has commenced a cost cutting
programme that will result in a reduction of OPEX in this quarter. In
addition, there was a short delay in IP licensing orders which further
impacted margins.
8.6.2 Has the entity taken any steps, or does it propose to take any
steps, to raise further cash to fund its operations and, if so, what are those
steps and how likely does it believe that they will be successful?
Out of prudence, the company continually assesses different options in the
event the company requires a capital injection and Wellnex has been provided
with a non-binding letter of support from a third party that they will provide
funding if required.
8.6.3 Does the entity expect to be able to continue its operations and
to meet its business objectives and, if so, on what basis?
Yes. The company has invested in inventory that is expected to generate
significant sales for the company with also a large pipeline in this quarter
of IP licensing purchase orders that will significantly increase the cashflow
of the business. The company also has the support of third parties if so
required to raise additional capital.
Note: where item 8.5 is less than 2 quarters, all of questions 8.6.1, 8.6.2
and 8.6.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with
accounting standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
20
October 2025
Date:
...................................................................................
The
Board of Directors
Authorised by:
...................................................................................
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying
activity report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and the effect
this has had on its cash position. An entity that wishes to disclose
additional information over and above the minimum required under the Listing
Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 107: Statement of Cash Flows apply to this report. If this
quarterly cash flow report has been prepared in accordance with other
accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the
corresponding equivalent standard applies to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities, depending
on the accounting policy of the entity.
4. If this report has been authorised for release to the
market by your board of directors, you can insert here: "By the board". If it
has been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - eg Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the
market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations, the board should have
received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this
report complies with the appropriate accounting standards and gives a true and
fair view of the cash flows of the entity, and that their opinion has been
formed on the basis of a sound system of risk management and internal control
which is operating effectively.
This ASX/AIM announcement has been authorised by the Board of Wellnex Life
Limited (ASX/AIM:WNX).
For further information, please contact:
Wellnex Life Limited (ASX/AIM:WNX)
Reach Markets
Zack
Bozinovski
T: 1300 805 941
Chief Executive Officer & Managing
Director E: IR@reachmarkets.com.au
P: +61 3 8399 9419
E: zack.b@Wellnexlife.com.au (mailto:george.k@Wellnexlife.com.au)
UK Investors
Strand Hanson (Financial & Nominated Advisor)
James Harris / Richard Johnson
Tel: +44 (0) 20 7409 3494
Orana Corporate LLP (Joint Broker)
swykeham@oranacorp.com
(mailto:swykeham@oranacorp.com)
Sebastian Wykeham
S.P. Angel Corporate Finance LLP (Joint Broker) Tel:
+44 (0)20 3470 0470
David Hignell / Vadim Alexandre
To learn more, please visit: www.Wellnex Lifelife.com.au/
(https://wellnexlife.com.au/)
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
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