AVA Risk Group Limited (AVA) Earnings Call Transcript & Summary

Good morning, everyone. Ladies and gentlemen, welcome to the 2024 Annual General Meeting of Ava Risk Group Limited. My name is David Cronin, and it's my privilege to serve you as Chairman of the Ava Board. I declare that a quorum is present. Accordingly, I declare the meeting is open. Thank you to everyone for attending in person and connected into the online AGM technology for joining us today. The online AGM technology allows shareholders, proxy holders, and guests to attend the meeting virtually. All attendees can watch a live webcast of the meeting in addition to shareholders and proxies have the ability to ask questions and submit votes. Questions can be submitted at any time. [Operator Instructions] Please note that whilst you can submit questions or comments, we will not be able to address until the relevant time in the meeting. Please also note that your questions may be moderated if we receive multiple questions on the same topic or we might merge them together. For those shareholders attending our Melbourne venue, should you wish to ask a question when invited to do so, please raise the voting card you received at the time of registration. We will ask that you state your name and if applicable, the name of the shareholder you represent. Finally, due to time constraints, we may run out of time to answer all your questions. If this happens, we will answer them in due course via e-mail or posting responses on our website. We will certainly give our best efforts to answer everyone's questions. Before proceeding with the business of the meeting, I would like to mention some procedural matters. For those of you attending at our Melbourne venue, you should have registered your attendance as you entered the room today. If any member or proxy holder has not registered their attendance at the door with our share register, Boardroom, we ask that you please do so now. Staff from Boardroom are here to assist you. Visitors are also to be registered electronically on Boardroom's meeting registration system. If any visitors have not registered their attendance, we ask that you please do so. And at this time, in respect of the others around you, we kindly ask that you silence all mobile phones. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. Those shareholders attending our Melbourne venue will have received a voting card on registering your attendance, which I will ask you to complete as each resolution is proposed. Calvin Kurtz of Boardroom has been appointed as returning officer and will collect all votes at the end of the meeting. For those attending this meeting and voting on the online AGM technology, if you are eligible to vote at this meeting, the voting tab will appear on the navigation bar. Selecting this icon will bring up a list of resolutions and present you with voting options. To vote, simply select your voting direction from the options displayed on screen. Your selection will change color and a confirmation message will appear. To change your vote, simply select another option. If you wish to cancel your vote, please post cancel. There is no need to press a submit or send button. Your vote is automatically counted. Voting can be performed at any time once I open voting later in the meeting until I close the poll. Let me first introduce you to our directors in attendance today. Malcolm Maginnis, our Group CEO and Executive Director; Mark Stevens, Non-Executive Director; Mike McGeever is joining virtually. He can see us, but we can't see him, but is in attendance. Also sitting with us today is Neville Joyce, our Chief Financial Officer and Chief Commercial Officer. I'd also like to welcome Kim Larkin, our Joint Company Secretary. She is joining us virtually as well. I'd also like to note that in line with the Corporations Act, our auditors, BDO, are here today, represented by YR, and we'll be able to take questions on the audit report later in the meeting, if so required. I will start by updating shareholders on the significant progress that the company has made during FY 2024 in building our position as a global leader in sensing and risk management technology. I'll then hand over to our Group CEO, Malcolm Maginnis, who will provide further insight into the company's operations and discuss our plan to drive revenue and growth. During FY 2024, we continued the significant investment in our technology and commercial capability that commenced when Mal joined us in January 2023. In the Detect segment, we continue to invest in technology that supports the company's product offering. Aura Ai-X is our market-leading fiber optic sensing solution that has enormous versatility in its applications across many different industries and market segments. It's rapidly becoming a solution of choice for diverse industries, including telecommunications, which you would have seen some great news on Telstra earlier this year, and Mal will update you on that. Sovereign borders, which we've now signed a few more and have a few more in progress that Mal will also update you on. Energy and infrastructure. In the Access segment, we completed the product certifications for the cobalt series of locks, and that forms the basis of our relationship with dormakaba and its global framework agreement. Total sales order intake for Access grew by 48% on the previous year, underlying the performance -- underlying the importance of the dormakaba framework agreement and our efforts in the access industry. Access is well placed to continue its growth trajectory in FY 2025. In the Illuminate segment, we have developed a new wireless solution based on LoRa, which enables the integration of up to 500 devices without the need for data cables to provide a unified control and security network. The LoRa product has been successfully launched in FY 2025, and we are seeing our first direct sales already. Total sales order intake for the company was $35.3 million, an increase of 14% on the previous year. This has resulted in revenue and other income of $30.2 million for FY 2024, an increase of 6% on the previous year. The difference between sales order intake and revenue is reflected in the growth in sales order backlog of $8.5 million, including $2 million from contracted ARR. ARR is a key element of our growth strategy going forward, and Mal will update shareholders on our progress there, both for the first quarter and our outlook for the year in his presentation. Pleasingly, the company recorded positive underlying EBITDA during the second half of FY 2024 as revenue increased and the cost base stabilized. Whilst investments made in our commercial team and technology did impact underlying EBITDA in FY 2024, these investments have positioned the company well for future growth. We remain committed and focused on the strategy to grow revenue and profits and have a clear path to continued growth for the next 24 months, underpinned by the growth in sales order intake, strong sales order backlog, increasing recurring revenue, our high gross margins, which are still in the range of 60% to 65% and maintaining a scalable cost base that will generate positive EBITDA. Reflecting the strength of the opportunities before us, the company undertook a successful equity raising during the second half of FY '24, which raised $4.3 million from both an institutional placement and an oversubscribed share purchase plan from existing shareholders. I welcome the new shareholders to the register, and thank you for your participation in the capital raising. And as well, I really thank existing shareholders for their ongoing support and participation in that raising. Funds raised have been used to support major contract deliveries, which Mal will talk about, and also ongoing technology development, which is important to continue giving us a competitive edge. Critical to the financial performance of the company is driving growth in sales and order intake. During FY 2024, our sales order intake grew by 14% to $35.3 million, underpinned by growth, particularly in the Detect and Access segments. The improved sophistication in our commercial capability is best demonstrated by the significant agreements that the company progressed during FY 2024. Following extensive collaboration and trials, we successfully signed a supply agreement with Telstra Group for the supply of all of our different technology to Australia's largest telecommunications provider and owner of Australia's largest fiber optic network. This is an exciting opportunity for the company to deploy its technology to an existing network operator with large assets and critical infrastructure throughout Australia and overseas. Ava Risk Group Limited also entered into an agreement with UGL Limited to deploy its fiber optic sensing technology on a major Sydney transportation project. Mal will talk more about that and more about how we're expanding that relationship to generate additional revenue opportunities in his presentation. Using the company's market-leading Aura Ai-X technology, we received Safety Integrity Level 2 certification, a safety specific to the rail market for our Aura Ai-X product. This is a globally recognized certification, and Mal will talk shortly to the opportunities ahead of us in railway protection and transportation. The Board is optimistic about the opportunities ahead of the company. We have a proven track record of growth highlighted by increased sales and order intake over FY 2024 and our high-quality customer base. We expect to maintain our strong gross margin as our technologies have been developed and we have established products in the market. Our business model is highly scalable. The cost base has stabilized, and we have completed the investment in our commercial capability. Our EBITDA margins will grow as our revenue grows. Our technologies are well developed and proven in the market. And whilst we will continue to invest in technology, we do not require significant near-term investment in order to penetrate large addressable markets. Our leadership team is stable, led by Mal, who's been here for about 20 months and has done a fantastic job coordinating our various management teams in 3 divisions. We've invested in upskilling our sales and commercial capability as demonstrated by the high-quality additions of partners such as Telstra, UGL, Dorman, Siemens and catalysts for growth exist in each of our segments. Mal will provide further details on the expected future performance of the company and how we're going operationally to date. I'll now ask Mal to address the meeting.

Thank you, David, and good morning to everyone. Thank you for attending. It's been a little over 18 months since I joined Ava Risk Group. So I really appreciate the opportunity to talk to you about our progress and what we've made and the opportunities which are more important going forward. Upon joining the company, I had several priorities. I organized the company to align our technology and products to the customer solutions, and that's the critical point. The resulting 3 operating segments focus on their go-to-market strategy, but also seek opportunities where we can offer multiple solutions into the market. This is creating a growing larger program business, which is critical to us hitting those large growth numbers and particularly between the Detect and Illuminate sector where we're seeing the sense of growth. And I'll share some insight on this when I shortly discuss some of the case studies and market sectors and where we are. I also reviewed the technology and products that support each segment, and we've made significant progress and change in ensuring that our technology remains market-leading in each segment. Aura Ai-X is the market leader in DAS technology in the fiber optic sensing product and achieved significant market penetration and customer acceptance since we launched. It is at the forefront of transforming the deployment of our technology from a static security-based approach into generating sensing data, which is used by customers across their fleets. Its versatility is demonstrated by the wide range of applications to which it is now being deployed from FY '24 onwards. In particular, and I'll speak later about them, sovereign border protection in Europe, energy infrastructure in U.S. and telecommunications in Australia, just to name some of the new sectors. We have grown our contracted recurring revenue base to $2 million annually. And as the subscription model becomes an integral part of the deployment, this will just continue to grow. The Aura Ai-X family has now expanded. We've introduced a shorter-range version of the model, which the customers needed because not every site needs 20, 40 or 80 kilometers. And we'll shortly be adding 2 additional Aura products into the family that is in the final stages of development and release. In Access, the product development, as David mentioned, and certification of the cobalt locks has been finalized in late '24 and been accepted into dormakaba as our key partner. And as a result of that, we saw that impressive sales order growth of 48% in Access. Recently, we've added a new Bluetooth reader version to our YG80 lock, which is the large entrance lock that we produce. Again, this is to open up new markets with the bluetooth capability that the customers nowadays expect. In the Illuminate segment, development of the LoRa wireless connection solution was completed during late 2024. LoRa is a system connects up to 500 devices up to 10 kilometers. In fact, with some of our customers, we've got up to 20 kilometers of distance in operations. And it saves our partners from massive data cabling installation. Imagine installing cables at 20 or 30 kilometers and you're talking 40 or 50 cat 6 cables. It's a huge project, and we can replace that with LoRa. It incorporates devices into a unified network alongside partner control, automation and security systems and offers configuration capabilities that enable intelligent responses to events. It has been successfully launched, and we're seeing its direct sales. More importantly, we're seeing direct sales from us directly into customer base as opposed to just the distributors. More importantly, it's underpinning the Illuminate entry into the larger program business, and I'll speak about several of those shortly. Now combined with our existing high-quality customer base and strong commercial capability, the technology supporting our products leaves us extremely well placed going forward. The technology supporting each segment is unique to the segment, so it has its own direct-to-market approach, but it is complementary to our other products now. We can sell each technology individually, and we can also integrate them into a holistic solution. The diagram depicts just one example of this of our technology has been sold into a correctional facility in Southern United States. Our fiber optic detection system products provide perimeter detection, warning and sensing. Our Access products secure the staff and access and our Illuminate products can secure critical assets, buildings and provide a layered defense. The key aspect of this slide is the commercial impact of turning what I call dumb passive objects, fences, walls and ditches into live 24/7 sensing. They're always on, they're always working and they're always providing data to the customer. This combined across all 3 of our divisions. Now I'll speak later in the market sectors about the impact of this sensing beyond security and sensing using in-place critical infrastructure. Now each segment has a proven go-to-market strategy. Now the detect system typically uses large system integrators and partners to reach the end user. But as I'll discuss later, we are also starting to work much more as a partner in that approach to the customer. An example is the supply agreement we've mentioned that we signed with Telstra and also then what I'll talk about with the other major partners. Now, the Illuminate and Access segments typically use high-quality distributors, dormakaba, such as Bosch, dormakaba, et cetera, to reach the end users. Now we have a strong mix of high-quality system integrators and distributor relationships across the globe in the business. And this enables us to provide those global solutions. The resultant revenue model can be split as follows. We have product sales, project-based revenue in detect supporting system integrators to the end user, key distributor relationships in Illuminate and Access, providing supply through their networks. Services support for the installation and commissioning of Detect systems and recurring subscriptions, multiyear support agreements providing access to machine learning algorithms and data libraries to improve Detect system performance in the field. Each Aura Ai-X system of the entire family is sold as an attached service and subscription model, which gives the users access to improved system performance, upgrades, et cetera, and new data libraries. The duration of the subscription is typically between 3 and 5 years. As such, we expect our recurring revenue to continue to grow as our installed base continues to grow. During FY '24, we realized $0.8 million of recurring revenue. At the end of FY '24, we had reached $2 million in recurring revenue. This number will naturally compound as more and more of the Ai-X products are sold. Anticipated future growth is supported by a strong sales pipeline in the Detect segment. You will all remember, I have spoken a lot about building backlog into the business to give it more stability. So our current pipeline, which is with expected close dates or decision dates in '25 is now around $100 million, excluding any opportunities that we're currently already working with Telstra and other adjacencies . We separate our pipeline between high probability in progress and early stage. High probability represents prospects that we expect to win based on customer feedback and advice and the maturity of the bid. Generally, the only thing being finalized in high probability is literally the order process and getting it into the books. In progress represents opportunities that have come to the market are being actively bid. We need to proactively manage the timing of those. I'm sure you'll all be surprised customers are incredibly late in making decisions and executing potential contracts. So we need to proactively manage the timing and win rate of these opportunities. And this has been a critical change in the commercial team's approach to program delivery. As the name suggests, early stage represent opportunities that we are aware and will come to the market, but we've not yet been able to do the particular key work to develop them. So they're in their infancy, but I need to build those pipelines. Our key focus on these opportunities to ensure that relevant specifications and tender requirements are consistent with our technology. There's no point us going to a tender and it's all the opposition specifications. That would be not clever. Importantly, the pipeline includes a number of large-scale programs, which are essential to enable us to hit our growth targets. In the past year, we won a number of these opportunities, such as the contract with UGL Sydney Metro, deploying our systems there and also a major pipeline product project in Chile. It's important that we continue to win those opportunities and build on the enhanced commercial capability we've developed over the past year. Specifically, the pipeline includes some opportunities, which we believe we're very well placed to win. There's a next stage of European border protection, approximately $5 million at the moment. Western Sydney Airport Metro, approximately $3 million; Western Sydney Metro, approximately $1.5 million; and City and Southwest, UGL Sydney Metro, further extensions of another $1 million. These are really exciting projects that we worked on and are leveraging as we go forward. Now the pipeline is supported by our high-quality relationships with key partners. I won't talk to all of them, and I don't want to give you a giant list of companies we work with. This is about the particular ones that are helping us drive the position. We've added a couple of new logos over the past year, specifically UGL, Exxon, Woodside, Siemens and of course, Telstra. These relationships are crucial to us expanding our presence in various global markets and the Australian transportation, oil and gas and communications sectors, which I'll talk about in a moment. We've also deepened our relationship with dormakaba globally following the certification and the deployment of our locks. I've included 2 slides because last year, there was a lot of comment about our marketing and our approach to the market and how we're getting our messaging out there, which I felt was extremely fair commentary. And as a result, [ Jen ] , my Director of Marketing is here today. Feel free to talk to her later on, any questions you want. Just put you under the bus there, [ Jen ] . Feel free to have a chat with her about it and see where we go. But I've included 2 slides to look at what we talked about last year. We've been working really hard to update and improve our overall marketing effort. We've now seen a fabulous response to our new website that was launched. This has shown a significant increase in traffic plus a much wider global engagement. I've been genuinely surprised at it being somewhat of a dinosaur, but I have really seen the impact of the new website and the links to the commercial team we've seen globally with opportunities coming from as far away as Nepal, Hong Kong, Kazakhstan, et cetera, just people who are picking things up through the marketing approach. And I'll discuss a couple of those shortly. So coupled with the new website and our newsletters, we've updated and renewed all of our customer-facing technical and product documents in addition to their sector and product branding. I'm sure you understand just what a huge effort that was. We've got over 100-something products. We had to upgrade, rebrand the whole of the suite to match the new products and our approach to the market and that's been done by Jen in the last year. It's a massive undertaking, and it's been really successful with the clients. It's a continuous effort. We still have much to do, but we will continue to do it, and we'll continue to advise you of our progress in that over the year. I'd now like to provide some more insight into the actual market sectors that we're working in and some of the customers and why I'm excited about our opportunities going into the rest of '25 and into '26. We are actively engaged with Telstra on several solutions. As we speak, we're performing a trial for pit lead intrusion and tampering in Western Australia. Interesting and pleasing, the trial is using our Illuminate products and has a longer-term potential for some of our fiber products, but it's part of that integration I spoke about of our entire suite, not just a single product. We're currently providing a new Aura AIX option to provide monitoring of subsea cables as they come onshore. As you would expect, the point at which the cables come onshore is a high-risk sector. Remember that quite a few of these are internationally based onshore. We expect detailed evaluation of our solution to commence in late November. You may also have seen some recent media coverage of vandalism occurring at the mobile network, tower network of Telstra across the country. Again, this is a point of discussion with Telstra around how our products can provide better sensing answers to what's going on, on the towers and how we can better protect the sites from that form of vandalism. Most of the sites at the moment are fundamentally protected by fencing of a form, which I won't be rude about saying what type of fencing, I think it is, but it certainly would not deter a serious annoying person, if I would say that. We highly value the relationship with Telstra. Telstra is much more than just a commercial relationship. They're a major fiber player. They have very, very strong technical capabilities. And what we're finding is some of the work we're developing with Telstra is going immediately into markets overseas. So while Telstra will take us time to build that great relationship, we're seeing a tremendous result just coming out of that technical interface with them. Another major success story for 2024, and this has been a real change for us has been done with partners on the critical Eastern European borders. For obvious sensitivity and security, I don't need to say more than that. I'm sure you can all work out what that means. This is represented by the first deployment of Aura AIX. You might remember last year, we announced that on the ASX. We provided a buried fiber solution to the client. We significantly reduced nuisance alarms and improved our detection and the customer is delighted to the point where you might remember in August, we announced a further extension of that to another $0.5 million, and we're providing additional now into that sector. During '24, we fulfilled the order for the 200-kilometer border. We're currently bidding to potentially replace an opposition on a border where they failed. In addition, geopolitical uncertainty on that border sector is providing a lot of opportunities for our successful solutions. I have at the moment in the very detailed and developed bids up to $12 million for execution in '25 and '26 on the European borders. And if you imagine the scale of it from Finland all the way down through Eastern Europe across Turkey and into the various stands, it's an enormous project capability. The next one is the contract we signed. I'm going to talk here about a market vertical transport, I split into 2 parts. The contract we signed with UGL during late FY '24 is a further example of using a major project to open further opportunities in new industry. We are deploying AIX to provide perimeter security on the fully automated Sydney Metro line. As part of this project, an independent third party completed testing of AIX to ensure it made all the performance metrics were satisfied. Additionally, the system achieved safety Integration Level 2, a globally recognized safety certification for rail transport. This certification is a key enabler. If you're not certified, you can't bid. It's as simple as that. It's a key enabler for further rail-based opportunities, both in Australia and internationally. All equipment under the current original order has been supplied to UGL, and we are currently finalizing commissioning. Within the sales pipeline, there are also further opportunities within the rail sector, both within Australia and elsewhere. We have also commenced discussions on deploying Illuminate products into a project within UGL and Sydney Metro to assist in railway platform management. This is a great example of the complementary nature of our product solutions and how we're able to leverage the relationship with a key partner and a key customer like UGL and Sydney Metro. Finally, in the transport sector, I'd like to comment on an emerging area of opportunity, airport security. I have significant experience for many, many years wasted at airports. And this has been somewhat interesting to me that it has become an important sector. Airports are facing a unique set of threats from various activist ground people around their long perimeters. Multiple airports have been closed by activists penetrating the perimeter, what I call a dumb perimeter, a chain link fence and they open the fence and then go running across the tarmac. Imagine the impact on security, the impact on the airports, and the impact on flights, costs, customers, et cetera, it's massive. Not to mention while you're at the airport, you all go back to have a full rescreen at the checkpoint, always a fabulous experience to go through. So securing their perimeter is now becoming a critical issue. And what we're seeing at the moment in Australia, Europe, North Africa, and the Middle East, we are just seeing a fabulous group of clients coming to us, big ones like Airport de paris, airports like Heathrow and Melbourne, all interested in how they further secure their perimeters. Now the final market sector I'd like to address is mining, oil, and gas. Now while we've been in this sector for some time, we are seeing a major renaissance in this market, which is mainly coupled with the performance of Ai-X, that is a major upgrade to the security of their key facilities. They also have a similar problem to the airports with interference at those facilities. We are seeing a very large opportunity pipeline for oil and gas linked to the renewal of older systems plus newly built infrastructure in Australia, PNG, Middle East, South Africa, and LatAm. The current active projects are over $4 million, and we have a pipeline of near-term opportunities above $12 million for execution in '25 and '26. I'll update you further this year as each of those starts to close, but we are in a very good position in oil and gas. And as I mentioned before, we now take a more direct position with some of these big clients. So we are working direct rather than through a third party. Now the company remains well placed to accelerate revenue and earnings growth in '25 and '26. Given our business capability and technology investment, earnings growth will be driven by increased revenue, leveraging a stable cost base. We have catalysts for revenue growth in each segment. In Detect, we carry a strong global sales pipeline of infrastructure protection opportunities. The focus is on increasing the market penetration of Aura Ai-X, and the market-leading sensing technology, which we've successfully deployed. We will consolidate our position in both North America, corrections, and energy sectors. We will complete the UGL transportation project in financial year '25 and use that to position ourselves for future and expanding rail opportunities, both in Australia and internationally. The successful deployment of our technology to sovereign border protection has led to other very large opportunities in Europe and Asia, which we expect to close in '25. Our supply agreement with Telstra continues to provide tangible evidence of the ability to use our technology in adjacent sensor-based applications. We are actively working with Telstra to generate use cases of how our technology can be installed on Telstra's fiber network to transform it into sensors. This is an incredibly exciting opportunity, which will propel growth in Australia and provide additional opportunities in the international telecommunications sector. Now building on the strong growth in access in FY '24, we'll exploit our distribution channels for our market-leading locks. Dormakaba is a key to that relationship, and we'll use that to drive access into the global market. We'll also continue to grow our other distribution channels in Europe, U.K. and Asia Pacific. And we're also doing further refreshes of various parts of the access technology. The Illuminate segment provides a complementary product offering for the Detect business. I see far more integration of Illuminate and Detect over the next year. Increasingly, through FY '25, I expect to see close collaboration across Illuminate Detect segments to provide a more holistic solution to our customers' requirements. It remains a priority to leverage this position in mainly North America and Asia Pacific, particularly Australia to grow the Illuminate segment. The launch of the LoRa system in early '25 is the lever that's giving us the opportunity to do all that. The leveragability of our model is illustrated by the anticipated expansion in EBITDA margins to around 25% in the outer parts of the year. This morning, we released to the market a trading update of performance for the first quarter of FY '25. Our sales order intake of $8.9 million was very strong, and I was delighted with the efforts of the commercial team. It was particularly so given that the first quarter tends to be our softest quarter due to the northern summer. As you all know, Europe disappears in July, August and sort of wanders back to work in September. So normally, it's quite soft for us. So this is a very good result. And Access had its strongest quarter post the large single stocking order from last year with Dormakaba. As I discussed on earlier slides, our sales opportunity pipeline has continued to grow and contains several large-scale programs. We have strong relationships with key customers and partners, which leaves us well-placed to close these opportunities. Based on our existing sales order and our backlog and our outlook of near-view sales pipeline opportunities, we have provided revenue guidance to the market for the first half of $16.5 million to $17.5 million. Based on this revenue guidance, the company expects to be EBITDA positive in the first half of FY '25. I will now hand back to David to do the hard bit.

All right. Back to the boring bits. Thank you, Mal. Kim, have we received any questions in relation to the Chairman or CEO addresses?

David, there are no questions at this time.

Thank you. Any questions from shareholders in Melbourne? No? Thank you. All right. On to the formal proceedings. We will now proceed with the consideration of the financial and other reports followed by the formal resolutions. And as is customary, there will be time for shareholders to ask questions. The notice of meeting dated 26 September 2024 was dispatched to all shareholders. I propose that with your agreement that the notice of meeting is taken as read. Shareholders who wish to inspect AVA Risk Group's register may contact our share register, Boardroom Proprietary Limited. As I propose each resolution, the screen will reflect the total number of valid proxies for that item and the manner in which they have been directed. These figures will be as of closing time of receipts of proxies, which was 11:00 a.m. on 29 October 2024. These figures may be varied if a shareholder who submitted a proxy is attending the meeting and has revoked their proxy. We will now proceed with the meeting of the business. I now open the voting on all resolutions. On Item 1 of the agenda deals with the receipt and consideration of the financial report, the directors' report and the auditor's report for the year-ended 30 June 2024. No shareholder vote is required in relation to this item of business. However, shareholders now have the opportunity to ask questions or have a discussion on these matters. AVA Risk Group's financial report, directors' report, and auditor's report for the year-ending 30 June 2024 are incorporated in the 2024 annual report, which has been sent to all shareholders who have requested the report. I would now encourage any shareholder who has a question on these reports to raise them now. There is also the appropriate time to raise -- this is also the appropriate time if you have any questions of the auditors that are relevant to the conduct of the audit and the preparation and content of the audit report. Kim, do we have any text or verbal questions received via the online platform?

No, David, there are no questions at this time.

Thank you, Kim. Any questions from Melbourne? Thank you. If there are no further questions, I'd now like to move to consider the formal motions of the meeting. Resolution 1, the remuneration report. I refer you to Resolution 1 of the Notice of Meeting in respect of the approval of the remuneration report of the company. This is a nonbinding resolution. The company's remuneration report is contained in the 2024 annual report and is also available on the company's website. The screen shows proxies received for and against this resolution and at the proxy's discretion, including me as Chairman to vote in accordance with my stated voting intentions in favor of the resolution. I would highlight that in accordance with the Corporations Act, no votes may be cast on this resolution by or on behalf of a member of the company's key management personnel or their closely related parties. I'll refer to these people collectively from now on as prohibited voters. A prohibited voter may vote directed proxies where they do so for another person who is not themselves or a prohibited voter. As Chairman, I may also vote undirected proxies for a person that is not a prohibited voter in accordance with my stated voting intention to vote all resolutions or all available proxies in favor of this resolution. For the purpose of this resolution, a prohibited voter includes a member of the key management personnel named in the remuneration report. Before opening this to discussion, I would like to mention that in the interest of corporate governance, the Ava Risk Group Board has abstained from making a recommendation in relation to this resolution. Kim, do we have any text or verbal questions via the online platform?

There are no questions at this time, David.

Thank you. Any questions from Melbourne? Ian? [indiscernible] Well, I think you'll find that when the target was set last year, the share price was a lot higher than when the target was set this year. So, I think you've got to look at what the target is and then what the share price is at the time of setting the target. [indiscernible] I'm not sure what the question is. What's the question?

The question is, are you rewarding yourselves?

Well, I can't speak for my own remuneration. But in terms of the other directors, if our share price goes from $0.10 or $0.12 where it was at the time of setting that remuneration to $0.24, I think the results of the company must have improved from where they were at that point in time. It's entirely appropriate that, director receives that compensation for that improvement. That's what performance-based compensation is about. Setting at a level that's $0.30 or a level that's well away from the share price that's currently trading, I don't think that's really fair and just compensation.

You're on the Remuneration Committee?

Yes. Any other questions? Thank you. If there's no further discussion, I propose that the company adopt the remuneration report for the year-ended 30 June 2024 in accordance with Section 250R(2) of the Corporations Act. Please submit your votes or mark your voting card in respect to the resolution. [Voting]

Resolution 2, reelection of Mr. Michael McGeever as a Director. I refer you to Resolution 2 of the Notice of Meeting in respect to the reelection of Mr. Michael McGeever. McGeever retires in accordance with Rule 19.3 of the company's constitution and Listing Rule 14.5. Mr. McGeever's biography is included within the explanatory memorandum accompanying the Notice of Meeting. The screen shows proxies received for and against for this resolution and at the proxy's discretion, including to the Chairman to vote in favor of the resolution. The Ava Risk Group Board, with Mr. McGeever abstaining, unanimously recommends that you vote in favor of this resolution to approve the election of Mr. McGeever as a Director of the company. [Voting]

Kim, do we have any questions text or verbal received via the online platform?

There are no questions at this time, David.

Thank you, Kim. Any shareholders in Melbourne like to ask a question in respect to this resolution? Please introduce yourself, if you would, please.

Gabriel Berman, private shareholder. Is Mr. McGeever able to address the meeting? Or is he just observing?

Can Mike talk, Kim?

He can, yes. We can give him to speak.

Could he just briefly address us as to what he thinks he brings to the Board and why he is seeking reelection?

Sure. Mike, did you hear that? They might need to.

Can you hear me?

There we go. Yes, Mike, we can hear you. Thank you.

Okay. Very good. Sorry, I didn't quite hear the question. Could you amplify it, please?

One of the shareholders has asked if you can just give a brief statement of why you're seeking to be reelected and what skills you bring to the Board?

Yes, sure. No problem at all. Well, thanks for the votes, first of all, much appreciated. I think because I've run a company with 55,000 staff, which has been very busy in all corners of the earth, literally, I think the situation is that because we're going Ava, Ava is going more and more global. We've talked about some of the different markets that we have at this moment in time. There are people and there are things that we can do and that we have knowledge of, particularly through myself, that's able to accelerate and get us into particular marketplaces. So, I'm quite happy to continue to be a member of the Board. I was a shareholder a long time before I was a Board member, a long, long time before, just simply because I believe in the products. And with the experience I have, I think I'm adding value. And as long as I think I'm doing that in anything in life, I'm very happy to be involved.

Thanks, Mike. Appreciate it. Any further questions from Melbourne? Thank you. I'll now propose the resolution that Michael McGeever, who is retiring in accordance with Rule 19.3 of the constitution and Listing Rule 14.5 and who offers himself for reelection is reelected as a director of the company. Please submit your votes or mark your voting card in respect of this resolution. [Voting]

Resolution 3, ratification of the issue of 23,076,924 shares. I refer you to Resolution 3 of the Notice of Meeting in respect to the ratification of the issue of 23,076,924 shares, the terms, conditions and allotment details of these shares are contained within the explanatory memorandum accompanying the notice of meeting. The screen shows proxies received for against this resolution and at the proxy's discretion, including the Chairman to vote in favor of this resolution. The Ava Risk Group Board unanimously recommends that you vote in favor of this resolution to approve the ratification of the issue of 23076-924 shares. [Voting]

Kim, do we have any text or verbal questions via the online platform?

There are no questions at this time, David.

Thanks, Kim. Any shareholder in the Melbourne meeting like to ask a question? Thank you. I now propose the resolution that for the purpose of Listing Rule 7.4 and for all other purposes, the company ratify the prior issue of 23,076,924 fully paid ordinary shares in the company, which occurred on 8 April 2024 on the terms and conditions set out in the explanatory memorandum. Please submit your votes or mark your voting card in respect of this resolution. [Voting]

Resolution 4, approval of 10% placement facility. I refer you to Resolution 4 of the Notice of Meeting in respect of the approval of the 10% placement facility. The terms and details of this resolution are contained within the explanatory memorandum accompanying the notice of meeting. The screen shows the proxies received for and against this resolution and at the proxy's direction, including the Chairman's votes in favor of this resolution. The Ava Risk Group Board unanimously recommends that you vote in favor of this resolution. [Voting]

Kim, do we have any text or verbal questions via the online platform?