• Completed divesture of non-US assets to Prestige Consumer Healthcare for US$9.5m
• Repaid A$8.2m debt facility, now debt-free with US$3.2m (A$5.14m) cash on hand
• Focused on growing US ecommerce sales, with 28% quarterly revenue increase and 65% gross margins

During the quarter, Hydration Pharmaceuticals Company finalized the sale of its non-US assets to Prestige Consumer Healthcare Inc. for a total consideration of ~US$9.5m (A$15.2m). The company used the proceeds to repay its A$8.2m debt facility, leaving it debt-free with US$3.2m (A$5.14m) in cash at the end of the quarter. With the divestiture complete, the company is now solely focused on the US market, targeting growth in ecommerce through its established position on Amazon. In the quarter, the company generated unaudited revenue of US$768,000 from its continuing US operations, a 28% increase on the prior quarter. Gross margins improved to 65%, exceeding the historical average of 50-60%, following the company's focus on high-margin SKUs and a streamlined approach to operations. The quarter included several one-off costs totaling ~US$2.36m related to the divestiture, redundancies, and debt facility repayments. Adjusting for these one-off costs, the net cash used in operating activities was US$729,000. The company expects operating cash outflows to decrease in the coming quarters as it continues to execute its US growth strategy from a significantly reduced cost base. Following the departure of the CFO, the company has transitioned its financial leadership and systems to an Australian-based team led by former VP of Operations, Matt Ng.

The company is focused on driving growth in US ecommerce sales, with plans to launch two new SKUs in the Liver Support category in 2025 to drive incremental revenue beyond its current baseline.