Full Press Release Details
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial
statements and related notes as set forth in Exhibit 99.2 entitled "Condensed Consolidated Financial Statements for the Six Months
Ended December 31, 2024 and 2023." In addition to historical unaudited consolidated financial information, the following discussion
contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those
discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below
and "Risk Factors" as more fully disclosed in our Annual Report on Form 20-F for the fiscal year ended June 30, 2024, as filed
with the U.S. Securities and Exchange Commission (the "SEC") on November 15, 2024. All amounts included herein with respect
to the six months ended December 31, 2024 and 2023 are derived from our unaudited consolidated financial statements included elsewhere
in Exhibit 99.2. Our financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS.
Unless the context indicates otherwise, references to "Gelteq" are to Gelteq Limited., an Australian public limited company
and references to "we," "us," "our," "our company," the "Company" or similar
terms used in this Exhibit 99.1 are to Gelteq and/or its subsidiaries.
We are a clinical and science-based company that
is focused on developing and commercializing white label gel-based delivery solutions for prescription drugs, nutraceuticals, pet care
and other products. A "white label" gel-based delivery solution is where we produce a product that other companies rebrand
as their own product. Our principal products are edible gels, which we refer to as gels, and their application in gel-based dosage forms.
Our current product suite consists of multiple products that sit within five core verticals - for pets, sports, pharmaceutical
(pharma), over-the-counter (OTC) and nutraceutical - all of which leverage our patent pending multiple-ingredient dosage forms,
and that we expect to have a wide range of applications and consumers. We currently focus our efforts on out-licensing our technology
to companies to develop and create new products they can manufacture and sell within their established and researched markets, while
we continue to manufacture our existing products under license ("white label").
On October 30, 2024, we consummated our initial
public offering of 1,300,000 Ordinary Shares at a price of US$4.00 per share, generating gross proceeds to the Company of $5.2 million
before deducting underwriting discounts and offering expenses. In connection with the IPO, the Company entered into an Underwriting Agreement,
dated October 28, 2024 (the "Underwriting Agreement") by and between the Company and The Benchmark Company, LLC
as representative of the several underwriters. The Company agreed to an underwriting discount of 7.0% of the public offering price of
the Ordinary Shares sold in the IPO.
On November 14, 2024, we entered into a license
agreement for office space rental in New York for a fee of 4,468 USD per month. The license agreement has an initial term of six months
and automatically renews for additional six-month terms upon the expiration of the initial term.
On December 2, 2024, we entered into an agreement
with WPIC Marketing and Technologies Limited ("WPIC") to assist with sales and distribution of our SportsGel products
throughout the Asian Pacific region, commencing with China initially in March 2025. As of the date of this prospectus, we have four
online stores across various platforms open in China as WPIC's first region of focus.
On December 19, 2024, we appointed Dr. Paul
Wynne as our Chief Scientific Officer.
On March 31, 2025, Simon H. Szewach
resigned as our Executive Chairman. He continues to serve as our Chairman and director.
On April 30, 2025, David A.V. Morton
resigned as a Director.
On June 3, 2025, Anthony W. Panther
resigned as our Chief Financial Officer and on the same day, Thuy-Linh Gigler became the Company's Chief Financial Officer.
Financial Operations Overview
For the year ended June 30, 2023, we delivered
60,000 units in December, 2022 and recognized revenue of AUD$79,843 (USD$51,898) from the deferred revenue balance at June 30,
2022. The delay in completing the manufacturing in support of the new January 2023 orders, and being able to recognize the relevant
component of the existing deferred revenue balance as income, is due to certain of our customers that experienced cash flow difficulties
and therefore being unable to pay for the order at the time.
For the six months ended December 31,
2024, we had prioritized pharmaceutical research and improving operational processes, and we expect to grow and execute on our business
plans with lower overheads and expenses in the financial year ending June 30, 2025. To facilitate this, we entered into a rental
contract, filed as an exhibit to the registration statement of which this prospectus forms a part, for laboratory facilities with Monash
University on February 2, 2024 (the "Monash Facilities") for further research purposes. Our lack of personnel,
and our focus on research, and identifying and establishing a laboratory facility, adversely affected our ability to close new sales opportunities.
We believe this will have a short-term impact on sales revenue which was nil for the six months ended December 31, 2023.
With the Monash Facilities established and fitted,
as well as the closing of our IPO, we are prioritizing our sales activities with a focus on the animal health, nutraceutical, sports,
over-the-counter and pharmaceuticals verticals. Notwithstanding the foregoing we are currently prioritizing pharmaceutical research on
our existing 505b(2) application and seeking other potential pharmaceutical candidates through such pathway.
We continue to discuss revenue opportunities with
existing and prospective customers and we remain confident in our sales strategy and our strong existing new business pipeline, and we
would fulfil our revenue numbers should each existing potential client in the pipeline eventuate. However, for the business to generate
its expected revenue from products sales and licenses in the financial year ending June 30, 2026, we need to ensure the following
Operating expenses - for
the six months ended December 31, 2024
Our company's focus has been on research,
with our operating expenses being made up of corporate and administrative expenses together with research expenses.
Research expenses - for
the six months ended December 31, 2024
Our research expenses consist of:
The primary research on our gel based delivery
system is complete and the Company has already begun manufacturing across different product verticals in May 2022.
With our product verticals, in the financial year
ending June 30, 2026, we will prioritize research and development in our pharmaceutical/OTC vertical. Unlike foods, nutraceuticals,
and sporting verticals, pharmaceutical and OTC regulations are stricter and require clinical work or studies. Clinical research and development
costs differ at different stages of the product research and development cycle. As our focus is on the 505(b)(2) pathway, these expenses
are substantially less than that of a new drug development. However, the studies required can still be unpredictable in cost. While we
do all the required lab work possible prior, there is inherent uncertainly in a clinical trial that makes it difficult to be assured of
the time when the results will arrive and whether additional trials are needed. Given this, the timing for income generation from these
products has uncertainties and we may require additional research and development costs to finalize a product.
The 505(b)(2) pathway is the shortest timeline
we can take to register a product with the FDA as the approved timeline requires stability and bioequivalence data rather than three phases
of clinical trials. Any trials which have a negative outcome, or any requirements from a regulatory body for additional data will create
a delay to income and increase our research and development costs which in turn can have a material adverse effect on our operations.
Corporate and administrative expenses - for
the six months ended December 31, 2024
Our corporate and administrative expenses are
primarily made up of staff and consultants' salaries, employee benefits, professional fees for auditors, consultants and legal counsel
and advertising and marketing expenses. Such expenses are incurred in the process of becoming an Australian public company that is to
be treated as a public company in the United States.
We can expect the corporate and administrative
expenses to increase through an increase in staffing expenses and employee benefits, legal and auditor professional fees, fees associated
with stock exchange listing and SEC requirements, investor relations expenses and insurances.
As we have products ready for commercialization,
the increase in staff expenses is expected to prepare for commercial operations, in particular around sales and marketing of our products.
Financial expenses - for the
six months ended December 31, 2024