Pharmazen

[Minimoke]

PAZ fined $7,500 by FMA for late filing of Accounts

There is zero excuse for that. They are a small company and the accounts ought not be that complex.

This years AGM will be interesting.

[lorraina]

Pleasing their bank is still supporting them.

PharmaZen Limited Press Release
30 May 2025
Dear Shareholders,
As noted in our release of 12 May 2025 we have been working with our auditors to finalise the financial statements
to 31 Dec 2024.
As previously released to the USX, CIBUS Oscar Limited has issued a redemption notice which on implementation
will create a liability for the Company. Until that liability is known or unlessCIBUS withdraw the redemption notice
the auditors will not be able to give a clear audit report. We have been working to try to resolve this, but this has
taken longer than anticipated so as a result, we advise that the release of our Annual Report will be delayed to no
later than 6 June 2025, rather than 30 May as previously indicated.
The delay has resulted in a $7,500 infringement notice from the Financial Markets Authority (FMA) for late filing
per the link below
https://www.fma.govt.nz/news/all-releases/media-releases/fma-issues-infringement-notice/
The FMA's notice refers to delays caused by negotiations with our bank in relation to the going concern
assessment. These banking matters were resolved in early May, and we continue to have the support of our bank.
The CIBUS redemption notice relates to two matters from 2024, and we were disappointed at the timing of receipt
of this given how late we were in the audit process. While we had anticipated resolving these matters through
negotiation, they remain ongoing.
We will provide a full update on the company's financial position with the release of the financial statements on
or before 6 June 2025. At that time, we also expect the current trading halt to be lifted.
Thank you for your continued support and patience.
Vincent Pooch
Chair of PharmaZen Limited
Further information:
Craig McIntosh
Managing Director
PharmaZen +64 21 372 069

[Minimoke]

Once may be forgivable. Two shows a problem. Three times is a trend. There is just no excuse for such poor accounting behaviours. On top of their very poor December update. The Board need to pull their socks up!

"Pharmazen has not yet filed audited financial statements for the year ended 31 December 2024 that were due by 30 April 2025, as required under section 461H of the Financial Markets Conduct Act 2013 (FMC Act).  It was also late to file financial statements in 2024 and 2023. "

[lorraina]

Dear Shareholders,
The finalisation of our 2024 year-end accounts has been delayed, primarily due to a redemption
notice from our private equity investor, CIBUS Oscar Limited. We are writing to provide clarity on
this issue, the resulting adverse audit report, and the Board's response to the CIBUS notice.
Background and Audit Delay
The adverse audit report stems from uncertainty over the redemption value of the CIBUS
Redeemable Convertible Preference Shares. Without an agreed value, the auditors could not provide
a definitive opinion. This uncertainty arose after CIBUS issued a formal redemption notice early in
May 2025, unexpectedly and without prior discussion, during the last phase of the audit process.
Our partnership with CIBUS was intended to support the expansion of our extraction business, driven
by projected growth from our krill supplier, who were constructing a new vessel. Although the
vessel's hull was launched in 2021, COVID-related disruptions, significant cost overruns, delays and
related litigation led to the shipyard selling the vessel to a competitor in 2024. As a result, the
extraction business, turning over $9 million in 2021 and expected to double, ceased operations
entirely by the end of 2024. Despite growth in other areas, the partnership has not delivered the
anticipated outcomes for either party.
CIBUS's Redemption Notice and Offer
The subscription deed clearly outlines a process for determining the fair value of CIBUS's preference
shares. The Board sought to follow this process to reach a commercial resolution, however, CIBUS
proposed a redemption value approximately 60% above the audit approved valuation (as of
31 December 2024). We consider this non-commercial and unsupported by a fresh valuation as of
the redemption date.
Board's Response
The Board, comprising two independent directors and two major shareholders has acted with
integrity and resilience, refusing to accept a non-commercial offer that would disadvantage
shareholders.
We acknowledge that accepting CIBUS's terms would have expedited the audit process, however in
doing so would have compromised our fiduciary duty to you. Instead, we are pursuing a fair
valuation process, as required by the subscription deed and remain open to constructive dialogue
with CIBUS to resolve this matter.
Financial Statements
Arising from the notice of redemption from CIBUS, received in the midst of the audit process, the
auditors could not gain certainty on the debt to CIBUS resulting from that notice. This was critical in
assessing liabilities of the Company and as a result, the auditors could not give a clear audit opinion
and there was a delay issuing their audit report. This also caused delays resulting in the FMA fining
the Company for not filing audited financial statements on time.
About PharmaZen:
PharmaZen (USX.PAZ), which trades as Waitaki Biosciences, is an innovative developer, manufacturer and marketer
of science-based, natural, nutritional ingredients and consumer goods. Originally founded in Dunedin, PharmaZen
now has the largest solvent extraction facility in the country and operates the largest batch freeze dryer in
Australasia. Shares in PharmaZen are traded through the Unlisted securities trading platform.
Waitaki Biosciences a division of PharmaZen Limited
320 Port Hills Rd, Hillsborough 8022
Christchurch, New Zealand
P : + 64 (3) 337 6096
W : www.waitakibio.com | www.aioranz.com
Next Steps
We regret the delay in finalising the accounts and are working diligently to address the outstanding
issues. At the upcoming Annual Shareholders' Meeting we will provide further details on the
Company's performance, the opportunities ahead and our strategy to strengthen the business. We
encourage your support as we navigate this challenge and work to protect shareholder value.
Should CIBUS reconsider their approach and withdraw the redemption notice, it would facilitate a
prompt resolution and avoid further disruption. We remain committed to transparency and
welcome your questions at the ASM.

Annual Report
https://prod-trade.usx.co.nz/api/file/68412af016fc0d2a104781a6.pdf

[Minimoke]

Gone form a $5.2m profit to a $9.9m loss.

Capital raise on its way.

Margins shrunk.

Number of employees earning over $100k increased

Assets decreased by $3m, liabilities increased by $3m. $7m in receivables. $10m in payables. Cash on hand $95k

Inventory up $3m to $7.5m

Liabilities went from $11.7m to $41.8m

[Basil]

This is a very sad and distressing situation for many shareholders.  It is not my intention in any way whatsoever to rub salt into the wound.  Just post some thoughts as I see them that might be food for thought

It should be obvious to all experienced investors who know how to read a profit and loss statement and a balance sheet the company is in VERY deep trouble here and shareholders now face a classic conundrum of whether they throw good money after what will probably be bad, unless a successful capital raise can be progressed.   The situation with CIBUS is deeply problematic in the circumstances and indicative of a complete breakdown in the relationship.

My view, and I have more than 40 years experience as an accountant and investor, is that shareholders have been very badly let down over the years.  They had, what was once a company growing well with growth in top line sales and real earnings per share growth, brought to its knees by a bunch of directors who's plans for growth were simply far too ambitious.  Covid and all the issues around that, got in the way and should have been a salient warning of the risks but the directors ploughed ahead with relentless high growth ambitious and have encountered numerous other challenges flowing from that.

Directors often cited great level's of demand, implying it was far in excess of their ability to supply at times, (something I often tell clients is easily fixed very profitably with price increases), but these directors knew better until they don't and now find themselves on the brink of receivership coming cap in hand to the same shareholders they have so very poorly communicated with in recent years.  I also note much higher inventory this year which means investors may have been deliberately mislead with statements implying no shortage of demand.

I am glad I am not in the invidious position of deciding whether I should throw good money after bad. The key questions investors need to answer is firstly, Do the directors deserve another chance ?  Each investor will need to make their own mind up about that.   Secondly at an operational level is the business viable ? Looking at the financials' I would not put up a bid for any volume even at 1 cent per share, its that bad in my view. I note annual operational losses, (excluding all one off items of circa $4.5m in FY24).

They remaining trading at the behest of their bankers but with circa $25m owing and incurring losses and in breech of their banking obligations and without a waiver, for how much longer ?  Without a successful capital raise and it should be no surprise to anyone what the bankers will do shortly thereafter.  Selling surplus property plant and equipment can take a long time and if I were lead on the banking committee, without a decent sized capital raise, I'd be looking to be in charge of the process under administration and / or receivership.

This is just my view and others will see it differently. Good luck to all shareholders.

Disclaimer. The above is not professional advice or a recommendation on what to do..  Where its financially worthwhile to do so and you want professional advice, investors should seek guidance from a highly experienced professional advisor.  All investments involve risk.  DYOR and take advice as required.

[lorraina]

A lot of water to go under the bridge..??..lol.
Currently their equity ratio is 30.15%.
The huge increase in current liabilities needs an urgent capital raise.
We are now near PAZ's first half ending at the end of month, yet no mention has been made of how they are trading.
A big hole in their revenue was the loss of their Kril supplier.They have a new supplier,but again no mention has been made of how that is progressing.
The pet food partnership looks interesting but it will be sometime before we hear how that is going,and how profitable it is.
$30mil revenue out of the Port Hills Road set up is an achievement.
The land they have for sale at Rolleston should be easily sold as Rolleston is still growing rapidly.
The capital raise on Unlisted will be a challenge.
Going to be an interesting AGM..lol.

[Basil]

Had another skim read.  Gosh, I initially didn't realize the terms of those preference shares include redemption for cash in certain liquidity events.  It would seem to me CIBUS want cash, not the preference shares converted into ordinary shares.  Not sure how they will raise sufficient funds to pay CIBUS back, get their bank facility down and have sufficient working capital to continue operations.  Maybe a 1:1 cash issue at 10 cents but how many shareholders would support that ?

[lorraina]

2025 Annual Shareholder Meeting
Tuesday, July 15 2025 - 11:00am
Annual Meeting

The Annual Meeting of Shareholders of PharmaZen Limited will be held at the Rakaia Room at the Novotel Christchurch Conference Centre, 52 Cathedral Square, Christchurch and online at www.virtualmeeting.co.nz/paz25 on Tuesday, July 15, 2025 at 11:00 am (New Zealand time). If you will be attending online, you will require your CSN/Holder Number for verification purposes.

[Doozer]

I see the share price has tanked to 10 cents - Hope to see honesty and real questions at the ASM rather than propaganda

[Monty]

I see the share price has tanked to 10 cents - Hope to see honesty and real questions at the ASM rather than propaganda

They will have to come up with some clever smoke and mirrors at the AGM to deflect this lot.

I wonder if this is a deliberate move to devalue the shares so as to deter CIBUS from exiting?

[Minimoke]

They will have to come up with some clever smoke and mirrors at the AGM to deflect this lot.

I wonder if this is a deliberate move to devalue the shares so as to deter CIBUS from exiting?

The AGM;s eh.

Where we we told there were no issues at all with the CIBUS referential share options as the triggering events would never happen/

How CIBUS were great investment partners and would bring a wealth of experience and access to many more international markets.

Manufacture isnt the problem - we have way more demand than we can produce.

I was seriously unimpressed with the Chairs market update in December. They better pull up their socks!

[Basil]

The AGM;s eh.

Where we we told there were no issues at all with the CIBUS referential share options as the triggering events would never happen/

How CIBUS were great investment partners and would bring a wealth of experience and access to many more international markets.

Manufacture isnt the problem - we have way more demand than we can produce.

I was seriously unimpressed with the Chairs market update in December. They better pull up their socks!

Risk has been very badly mismanaged over the years.  Unless there's support for a major capital raise ...I think its pretty clear what's going to happen.

[Minimoke]

Risk has been very badly mismanaged over the years.  Unless there's support for a major capital raise ...I think its pretty clear what's going to happen.

Last time we were told there was no appetite from existing shareholders to put money in -- that's why they went to Cibus.

Bit of a shame they sold part of the Rolleston site. No asset. And an insurance overhead/. With no apparent production coming from it. A bit like Synlait - a big pile of stainless steel.

[Basil]

Directors hold huge stakes and are unlikely to be in a position for a large pro-rata cash issue.

A very dire situation.  I doubt the bank will continue support without a substantial capital raise so unless a white knight can be found and unless Cibus and the bank can be accommodated as part of that...