Cardiex Faces Tight Cash Runway Despite Cost Cuts and New Revenue Streams

Quarterly Cash Flow and Operational Overview

Cardiex Limited’s latest quarterly cash flow report for the period ending 31 March 2025 reveals a continuing cash burn, with operating activities consuming A$2.06 million during the quarter and A$8.14 million year-to-date. Despite this, the company is actively reshaping its cost structure and revenue model to improve its financial footing.

The company’s cash reserves stood at a modest A$236,000 at quarter end, underscoring the urgency of its operational and financial initiatives. Cardiex’s management acknowledges the tight liquidity position but highlights significant progress in cost containment and revenue diversification.

Cost Reduction and Operational Restructuring

Cardiex has implemented a strategic operational restructuring, centralizing its engineering and development teams from the U.S. and offshore locations to Sydney. This consolidation has reduced the company’s cost base by approximately 30%, translating into annualized savings of about A$4.7 million. The new annual expense base is around A$10 million, down from roughly A$17 million in FY24.

These cost efficiencies are already impacting cash flow positively in the current quarter, with full benefits expected to materialize in the first quarter of FY26. This disciplined approach to expense management is critical as the company navigates its path to sustainable cash flow.

New Revenue Streams from Product Launches

In Q3, Cardiex launched the CONNEQT Pulse and accompanying App, marking a significant step in its commercial strategy. These new digital and product offerings are beginning to generate revenue, complementing the existing ATCOR business. The company anticipates that these combined revenue streams will contribute to improving gross margins and cash flow in the near term.

Financing Activities and Loan Facilities

During the quarter, Cardiex received a A$1.46 million refund from the 2024 Research and Development (R&D) tax incentive, which was used to fully repay its Working Capital Loan Facility and partially reduce its R&D Term Loan Facility with Mitchell Asset Management Pty Ltd (MAM). The remaining balance on the R&D Term Loan Facility was reduced to A$730,000.

Post quarter-end, the company increased the limit on this facility by an additional A$446,000 and secured revised terms, including a lower interest rate of 16% effective April 2025 and repayment secured by the 2025 R&D tax incentive refund due by October 31, 2025.

Additionally, Cardiex has a US$2.39 million promissory note with its US legal counsel related to outstanding fees from a withdrawn NASDAQ IPO initiative, with structured repayments scheduled through October 2025.

Capital Raising Plans and Shareholder Support

Recognizing the need for additional funding, Cardiex is actively pursuing capital raising efforts in Q4 2025. Lead shareholder C2 Ventures has already demonstrated strong support by fully funding its A$250,000 commitment ahead of shareholder approval and signaling ongoing backing for future funding rounds.

The company is engaging with investors in Australia and the US to secure sufficient capital to reach cash flow positive trading. Funds raised will primarily support new device manufacturing, marketing, sales activities, and scaling supply chain operations for the CONNEQT Pulse.

Outlook and Strategic Implications

While Cardiex’s current cash runway is limited to approximately 0.11 quarters at the current burn rate, management expresses confidence in its ability to raise additional capital as needed. The combination of cost reductions, new product revenue, and shareholder support positions the company to potentially reverse its cash flow trajectory in the coming quarters.

Investors will be watching closely for the success of the planned capital raise and the commercial traction of the CONNEQT Pulse as key indicators of Cardiex’s financial sustainability and growth prospects.