How Holista Colltech Boosted Cash Flow and Supplement Sales Amid Legal Battles

Financial Resilience Amid Operational Challenges

Holista Colltech Limited (ASX – HCT) has delivered a cautiously optimistic quarterly update for the three months ended 30 September 2025. The company maintained solid customer receipts of $1.56 million from its core operations, supplemented by a $357,000 recovery from aged debts. This improved cash collection effort contributed to a significant reduction in net operating cash outflow, which fell to $78,000 from $241,000 in the previous quarter, reflecting tighter cost controls and better timing of supplier payments.

Strong Momentum in Dietary Supplements

The standout performer was the Dietary Supplements division, which posted sales of approximately $1.52 million; a 76% increase quarter-on-quarter and a 6.8% rise year-on-year. This growth was driven by sustained demand through Zuellig Pharma and domestic distribution channels, underscoring the division’s resilience and market appeal. Meanwhile, the Food Ingredients division experienced a slight dip to $178,000, attributed mainly to timing shifts in orders, though it remains on track for recovery in the coming quarter.

Mixed Performance in Collagen and Other Divisions

The Ovine Collagen division held steady with sales of $33,000, a modest 5% increase from the prior quarter but down 52% year-on-year. This segment is currently preparing for a significant rebuild and upgrade of its Collie facility, which may impact near-term output but aims to enhance future capacity and quality. The Infection Control and Agriculture division reported no sales this quarter, with management continuing to assess market demand and product fit.

Liquidity and Financing Position

Holista ended the quarter with a cash balance of $52,000 and access to $1.1 million in unused credit facilities, providing a total liquidity buffer of approximately $1.16 million. The company’s financing activities included modest drawdowns from banking facilities and a short-term loan, offset by scheduled repayments. Operating costs rose slightly to $1.99 million, influenced by one-off items such as legal fees related to the ProImmune case and inventory preparation for the next quarter.

Legal Proceedings Cast a Shadow

Holista remains embroiled in legal proceedings with The ProImmune Company LLC in the Supreme Court of Western Australia. Recent court orders have required procedural adjustments, with a summary judgment hearing scheduled for 13 November 2025. Holista has also initiated counterclaims against ProImmune and its director, Dr Albert Crum. The outcomes of these cases are uncertain but could have material implications for the company’s financial and operational outlook.

Outlook and Strategic Focus

Looking ahead, Holista is focused on sustaining growth in its supplements business, advancing commercialisation of higher-value nano-collagen products, and maintaining rigorous cost discipline across all divisions. The company’s ability to navigate legal risks while capitalising on its core strengths will be critical as it seeks to build shareholder value and operational momentum into 2026.