Rewardle Faces Reporting Delays Amid CloudHolter Audit Despite Strong Growth

Strong Operational Cash Flow Drives Growth Investment

Rewardle Holdings Limited (ASX: RXH) has delivered another quarter of robust operational performance, generating $7.78 million in cash receipts and nearly $4 million in positive cash flow from operations during the December quarter of FY25. This marks the 12th consecutive quarter of positive cash flow, underscoring the company’s ability to leverage its existing platform and operational capabilities to fund growth initiatives without resorting to external capital.

The company maintained a cash balance of approximately $1.2 million at quarter-end, strategically reinvesting cash flow into expanding its footprint and enhancing its proprietary Business to Business to Consumer (B2B2C) software platform.

CloudHolter Partnership Catalyses Valuation Leap

A standout highlight for Rewardle this quarter was the substantial increase in the valuation of its Growth Services partner, CloudHolter Pty Ltd. The MedTech company, which provides innovative in-practice Holter monitoring services and is developing AI-powered ECG diagnostic software, secured capital at a valuation of $100 million, nearly triple its previous $35 million valuation.

This valuation uplift reflects CloudHolter’s rapid growth trajectory and technological advancements over the past 12 to 18 months. Rewardle has converted $2.325 million of fees into equity during the quarter, increasing its stake to 49.1%, with expectations to approach 49.9% through further conversions. However, contractual terms prevent Rewardle from acquiring a controlling interest.

CloudHolter’s AI-driven software aims to revolutionize cardiac arrhythmia diagnosis by offering faster, more accurate, and cost-effective analysis compared to traditional manual methods. This innovation holds significant global market potential, positioning Rewardle to benefit from both operational cash flow and equity appreciation.

Expanding Growth Services and Vertical Integration

Beyond CloudHolter, Rewardle is actively developing a portfolio of Growth Services partnerships, seeking to replicate the success of its MedTech collaboration. The company is exploring both direct and partnership models to build a venture capital-style portfolio of transactional, licensing, and equity positions in complementary businesses.

Simultaneously, Rewardle is advancing the vertical integration of its grocery delivery services, aligning these with its local membership, points, rewards, and payments platform. Beta testing of new merchant and member services is underway, aiming to leverage the existing network to generate high-margin revenue streams and enhance user engagement.

Financial Reporting Delays and Outlook

Rewardle’s shares remain suspended pending the lodgement of its FY23 accounts, delayed primarily due to the requirement for audited financial statements from CloudHolter, which is outside Rewardle’s direct control. CloudHolter is nearing completion of its FY24 audit, which will enable Rewardle’s auditors to finalize outstanding reports and resume timely market disclosures.

Despite these reporting challenges, Rewardle’s management remains confident in the company’s multi-dimensional growth strategy and operational agility. The company continues to balance investing in growth with prudent liability management, including repayment of director loans and accrued fees.

Founder and Executive Chairman Ruwan Weerasooriya emphasized the company’s commitment to executing its strategy, leveraging operational cash flow to fuel a compounding growth flywheel effect, and unlocking shareholder value through its strategic partnerships.