Bod Science is fighting for survival after appointing voluntary administrators as a deepening cash crisis forced the board's hand.
The company confirmed that external administrators from Rodgers Reidy have taken control of its business and assets with immediate effect.
The announcement came a day after the company was suspended from the ASX at its own request, pending a transaction described as "critical to the company's financial viability".
Chief executive Jo Patterson described it as a "really tough situation" and one "I deeply regret" in an interview.
The company's already-strained finances deteriorated further last Friday when a A$2 million capital raise fell apart, leaving the board with few options.
Patterson said it became clear that cornerstone investor Antah Healthcare would not be able to settle its $1.1m commitment by the Monday deadline. The Malaysia-based company had already missed the original deadline of November 14.
"We tried to develop alternative arrangements, but it really didn't give us enough time to find an alternative source of funding that would give the board comfort," Patterson explained.
"Subsequently and regrettably, the board elected to appoint administrators. I deeply regret that we're in this situation and at the forefront of my mind are our amazing staff, shareholders and stakeholders.
"I am now working with the administrator to hopefully find a pathway out."
In a brief statement to the ASX, Bod confirmed its subsidiaries are not included in the administration. Its 2023 annual report lists Bod Healthcare UK, Bod Healthcare US and Switzerland-based Bod SAGL as subsidiaries.
"The administrators have assumed control of the business and assets and will work with the board of directors during the administration period to maximise the outcome for all stakeholders of the company," the statement said.
No additional information was provided.
Bod had previously attributed the delay in receiving payment from Antah Healthcare to complications in obtaining Monetary Authority of Singapore approval for the fund transfer.
When asked whether there was still any chance of receiving those funds, Patterson said: "That ship has sailed in terms of the original equity raise. We couldn't get a definitive date [to receive the funds] and we couldn't keep holding on."
Patterson said she was unable to comment on where new funding would come from.
"We are working to find a pathway through and source funding for the company to continue as a going concern," she said. "We have lots of assets [and] there is interest in those so we'll see where those conversations lead us.
"Of course we want to find a way out and that's what we're doing. You keep fighting for what you believe in. At the forefront of my mind are the staff and the shareholders who have backed us. Our view of the opportunities for the business hasn't diminished, but unfortunately we've hit some roadblocks."
When asked whether she was confident of finding a way through, Patterson said: "I can't comment on that, but I hope we can. If you don't have hope, what have you got?"
Boards typically appoint administrators when it becomes clear a company is at risk of running out of money and cannot meet its financial obligations.
Under the Australian Securities and Investments Commission (ASIC) framework, administrators have three courses of action available to them once they have examined the company's finances.
These are to conclude the administration and hand control back to the directors, approve a Deed of Company Arrangement (DOCA) under which the company repays all or part of its debts, or wind the company up and appoint a liquidator.
Bod's largest shareholders are HSBC Custody Nominees Australia with 16.6%, WA-based Dutch Ink with 8.7% and Health and Beauty Enterprises, of which Patterson is the sole director, with 3.6%.
The appointment of Rodgers Reidy caps a turbulent few months for the Sydney-based company.
Despite successful trials of Aqua Phase, a UK-designed drug-delivery technology acquired in October 2022, and positive clinical trial results for an over-the-counter CBD product, Bod has struggled to generate meaningful revenue.
Senior management accepted pay cuts earlier this month to conserve cash after the ASX raised questions about the firm's ability to meet its financial obligations. At the end of September, the company reported just $115,000 in available cash.
Patterson said late last year that the era of repeatedly returning to shareholders for funds was drawing to a close.
"Investors want to see – and I am fully supportive of it – a revenue model that is sustainable because no matter if you're a public company or a private company, you can't keep coming back for more," she said. "The last five years has been about building assets that could realise significant revenue value.
"You've then got to prove out the business model and that is why I'm so excited about Aqua Phase. Living the position of a drug-delivery company and product innovator will really start to play out."
