Holista’s ’80Less’ is five times stronger than regular sugar, but its financials aren’t so sweet
Health & Biotech
Health & Biotech
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Health food manufacturer Holista Colltech has completed successful testing for a low-calorie sweetener that is five times sweeter than ordinary sugar.
The company says its proprietary “80Less” formula can be used as a replacement in most applications without changing the flavour.
Holista reckons there’s a market opportunity to be exploited from the increasingly anti-sugar stance of global health regulators.
Holista’s 80Less is made via a blend of sucrose (normal table sugar) and sucralose, a sweetener derived from sugar cane.
And as part of the food manufacturing process, one gram of 80Less can replace five grams of normal sugar, making it “significantly cheaper”.
The product can be used in solids and liquids without changing the flavour profile, “except as a bulking agent as in sweets and candies”.
Holista CEO Rajen Manicka didn’t specify what kind of food manufacturing industries the company would supply, but he said the formation of the product is well-timed.
“It is being offered at a time when many countries around the world are introducing a sugar tax based on the level of sugar contained in food and drinks,” he said.
“More importantly, no regulatory approvals are needed.”
Just don’t run out of money
Although Holista has announced the development of more than one healthy food alternative this year, it’s still burning through money to do so.
So much so that the company’s most recent 4C filing prompted a response from the ASX. In short, it asked why Holista isn’t making any money.
Or in the exchange’s words, “does the Company expect that it will continue to have negative operating cash flows for the time being and, if not, why not?”
Holista conceded that cashflows will remain negative for the March quarter, but is optimistic that business will pick up in 2019.
It forecast quarterly revenues of $1.748 million this quarter, but says it won’t need to provide as much cash for its subsidiary companies this year. It’s also banking on increased revenue from its high-margin collagen products.
For now though, the ASX wants to see evidence that the company is taking efforts to maintain cash-flow. To that end, Holista advised that it’s currently in the application process for a $330,000 loan from a Malaysian bank.
Shares in the company were up fractionally this morning at around 6 cents, having trended steadily lower from their March 2018 high of 20 cents.