Baylin Technologies Inc. (BYL) Earnings Call Transcript & Summary

Thank you, everyone, for joining us this morning, and appreciate your patience waiting for the shareholder to get everything organized. Good morning, ladies and gentlemen, and welcome to the 2020 Annual and Special Meeting of Shareholders of Baylin Technologies Inc. My name is Jeffrey Royer, and I am Chairman of the Board of Directors. In accordance with the company's bylaws, I will act as Chairman of this meeting. For those in attendance of the meeting, you will have noticed that my fellow directors, other than Randy Dewey, our President and Chief Executive Officer, who is with us in-person, are participating in the meeting remotely. They are doing this to minimize the risk of infection. For that reason, and in order to accommodate those who would like to participate in the meeting, but prefer not to attend in-person, we have made arrangements for you to participate by phone, either by calling the numbers or logging into the audience URL that was included in the management information circular for the meeting and is also available on our website. For those here in person, I ask that you do wear a mask. They're available at the door. Thank you very much for doing that, and maintaining social distance from one and other during the proceedings. The room has been set up to accommodate social distancing. Before proceeding with the business of the meeting, I would like to introduce my fellow directors: Ms. Janice Davis; Mr. Randy Dewey, who I previously introduced; and Mr. Barry Reiter; Mr. David Saska; Mr. Don Simmonds; and Mr. Harold Wolkin. You can see them all on the screen. Also in attendance at the meeting is our CFO, Mr. Michael Wolfe; and our Corporate Secretary, Mr. Philip Mohtadi. I would also like to recognize Mr. Grand Lui, who's representing our auditors, RSM Canada LLP. The meeting will now come to order, and I will ask Philip Mohtadi to act as Secretary. I will also appoint Computershare Investor Services Inc., the registrar and transfer agent for the common shares of Baylin and represented by Matthew Gemmell, to act as scrutineer for the meeting. The Secretary has advised me that the notice calling the meeting, together with the management information circular and the form of proxy have been sent to directors, the auditors and registered shareholders of the company on -- of record as of July 9, 2020. Accordingly, unless there is an objection, I will dispense with the reading of the notice of the meeting. The scrutineer reports that there are 39 shareholders present in person or represented by proxy at the meeting, representing an aggregate of 24,342,325 common shares, which represents approximately 59.54% issued and outstanding common shares of the company. A quorum of shareholders is present at a meeting of the shareholders, irrespective of the number of persons actually present at the meeting. If the holders of 25% of the common shares of the company are present in person or are represented by proxy at the start of any meeting of shareholders. The scrutineer confirms that there is a quorum present for the meeting. Notice having been duly given and a quorum being present, I declare the meeting to be duly constituted for the transaction of business. The items of business to be conducted today are: Number one, to present the company's audited annual consolidated financial statements for the year ended December 31, 2019, together with the auditor's report thereon; and number two, to elect 7 directors of the company for the ensuing year; number three, to appoint RSM Canada LLP as the auditor of the company for the ensuing year and to authorize the directors of Baylin to fix their remuneration; number four, to approve a new Omnibus equity incentive plan; and number five, to transact any other business that may properly come before the meeting. We will proceed first with the formalities of the meeting, followed by a business update from our President and CEO, and then shareholders will have an opportunity to ask questions. The votes at the meeting other than the appointment of auditors will be conducted by way of ballot. For those attending the meeting in person, you should have received a ballot when you entered the meeting. Is that -- just to be clear, only registered shareholders who have not previously voted by proxy or their duly appointed proxy holders are permitted to fill out a ballot for those 2 items of business. If you are a nonregistered shareholder, you already have had an opportunity to cast your vote on the matters to be considered at the meeting by providing your voting instructions to your intermediary. As long as you have compiled -- complied with the instructions sent to you by your intermediary, your votes on those matters have already been received and will be counted by the scrutineer. The company's audited annual consolidated financial statements for the fiscal year ended December 31, 2019, together with the auditor's report are placed before the meeting. These financial statements are available for review under the company's profile on the System for Electronic Document Analysis and Retrieval at www.sedar, S-E-D-A-R dot com. We will now proceed with the election of directors. The number of directors to be elected at the meeting is 7. The company's bylaws provide that only directors nominated in accordance with the provisions of the bylaws governing the nomination of directors are eligible to be nominated for election to the Board of Directors. Other than the nominees identified in the management information circular for the meeting, the company did not receive any nominations for directorship. I declare the meeting open for the nomination of directors. I will ask Randy Dewey to nominate the individuals proposed by management as directors of the company.

I move that the following individuals, as set out in the management information circular, be nominated for election as directors of the company: First, Jeffrey Royer; second, Janice Davis; third, Randy Dewey; fourth, Barry Reiter; fifth, David Saska, sixth, Donald Simmonds; and seventh, Harold Wolkin.

If elected, these nominees will hold office from today's date until the close of the next annual meeting of shareholders or until their successors are duly elected or appointed. As a motion to nominate directors does not need to be seconded, may I have a motion to close the nominations?

I so move.

Thank you, Michael Wolfe. May I have a seconder, please?

I second the motion. It's Randy Dewey.

Thank you, Mr. Dewey. All in favor, please signify by raising your hand. [Voting]

I'm against.

Okay, against. So the records show that Mr. Gelerman has raised his hand and voted against the nominations. I declare the nominations to be closed. In accordance with the requirements of the Toronto Stock Exchange, the election of directors will be interrupted on an individual basis. The results of the election today, including details -- detailed results based on the shares voted by proxy in respect of the election of directors will be disclosed in the press release following this meeting. The Board of Directors of the company has adopted a majority voting policy as acquired by the Toronto Stock Exchange. In essence, the policy provides that a director who receives more withheld votes than for votes at any shareholders' meeting where shareholders vote in an uncontested election of directors must immediately submit his or her resignation to the Board of Directors to take effect upon acceptance by the Board. The Board then must determine whether or not to accept the resignation within 90 days, during which time, an alternate Board member may be appointed. The policy is described in greater detail in the management information circular. The motion will now be voted on by way of ballot. I've been informed that the scrutineers have already handed out ballots to those persons entitled to receive their ballots. The scrutineer...

Ballots have been handed out.

Pardon me.

The ballots have been handed out.

Ballots have been handed out. Thank you very much. And the scrutineer has counted the ballots?

Yes.

Okay. The scrutineer has advised me that the votes cast for the -- and withheld for each of the [ pro ] director nominees. I declare that each of -- Jeff Royer; Janice Davis; Randy Dewey; Barry Reiter; David Saska; Donald Simmonds; and Harold Wolkin have been duly elected as directors of the company. The next item of business is a resolution appointing the auditor of the company for the ensuing year and authorizing the directors to fix their remuneration. I ask for a motion appointing RSM Canada LLP as auditor of the company to hold office for the ensuing year or until their successor is appointed and authorizing the directors to fix their remuneration.

I so move.

Randy Dewey has moved. May I have a seconder?

I second the resolution.

I'm against the resolution.

Okay. Okay. Mr. Wolfe, thank you for your seconding. Thank you very much. All in favor, sing by raising your hand. [Voting]

Are there any objections?

I'm against.

Okay. Mr. Gelerman has put together -- put in his objection.

I want somebody from Big Four to be nominated.

I'm sorry, could you -- I couldn't hear you...

I would like Big Four -- 1 of Big Four accounting firms to be nominated as an auditor.

I'm very sorry, David. I want to hear what you're saying clearly, sorry.

I would like somebody from Big Four auditor firms to be appointed as an auditor.

Okay. Okay. Thank you for -- I appreciate your input on that. Thank you very much. Okay. So the -- I've declared the motion passed. Thank you very much, Mr. Gelerman, for your input. The next item of business is the approval of a new omnibus equity incentive plan. This plan is intended to consolidate existing compensation plans under one plan document and to provide the Board with greater flexibility, to design and award equity-based compensation tied to the company's performance. Details of the plan are set out in the management information circular, including the full text of the plan. I ask for a motion in the form of the omnibus plan resolution as set out in the management information circular to approve the omnibus equity incentive plan.

I so move.

Moved by Mr. Dewey. May I have a seconder, please?

Can we discuss?

1 second, please. After we have the motions, yes. May I have a seconder?

I second the resolution.

Okay. It's been seconded by Mr. Wolfe. And is there any discussion? And I'll open the floor for discussion.

What's the reason to replace -- okay, first of all, my name is David Gelerman, for the record. And I am President and CEO of SpaceBridge Inc., formerly Advantech Wireless, Inc., shareholder of Baylin shares. And I would like to ask you several questions. Number one, what was the reason to replace existing compensation plans with new Omnibus plan?

Our Corporate Counsel, Mr. Philip Mohtadi, can answer that question for you. It relates to simplification of the procedures for the company.

Thank you for the question. The reason is very really just to simplify new operation of -- one of the reasons to simplify the operations of the plan. Now 3 plans and they're not all the same. So having all of these incentives under 1 plan makes them easier for us to deal with the different types being tested effectively. The current plan is going to give the Board sufficient flexibility to offer equity incentives that are tailored to performance of the company. And so this will give the Board more latitude to design equity compensation of the company.

Okay. And I find some inconsistency in your proposed plan. Specifically, you put discretion of award under omnibus exclusively to the Board without complete objectives and pay-for-performance transparency policy. I found that not in the best interest of stakeholders.

Okay. Thank you very much for your observation. The Board is recommending it, and we do recommend that shareholders approve it because we believe it is in the best interest of shareholders for the reasons as outlined by Phil.

I don't...

Simplifying things, there is no increase in compensation. It simply provides more flexibility to accommodate the needs of our staff, which are very important because they obviously are the heart of our business.

The way transparency or principles, what public companies have to adhere, how come would Board can exclusively on a sole discretion award or not award people and weigh about performance? I think in best in place of shareholders to award people for their performance, unlike what Board is doing right -- awarding Baylin CEO for his nonperformance, and this is detrimental to shareholders' value.

Thank you for your input.

In fact, I would like to discuss it in more detail.

This is not an appropriate venue for making the discussion -- this item. We are discussing the executive plan. We're not here to diss them. Again, we recognize your point...

However, face-to-face can these set of objectives -- and if people meet objectives, they should be rewarded. If people don't meet objectives, they should be reduced -- their performance. And if they don't perform continuously for a number of years, like he is losing little known company -- lose money. They should be asked to leave company and then get replacement for them.

Thank you for your perspective. As I've stated, the management and the Board have support this change, and we recommend it to be passed.

Okay. So you can pass it, but I am just raising my concern.

I understand.

Because it's not fair, not transparent and it's not certainly in the best interest of shareholders or the [ shareholder ] family. Okay, you can pass it, but I want all shareholders to be able to listen to my concerns.

Thank you. Your concerns have been registered. Thank you very much. Are there any other questions from other shareholders online? Okay.

I have other questions.

Yes. Okay. Go ahead, Mr. Gelerman. Is it related to this particular matter that's before the meeting?

GG Recommendations, where they recommended -- recommendation -- heard the recommendation of [ GG ] committee was implemented specifically considering where pay for equity and performance philosophy. The performance-based short-term incentive plan were long-term incentives in fairness and reasonably well. A reference made specifically concerning Mr. Randy Dewey remuneration.

What was your question?

I'm not sure if I understand your -- I do want to process your question, David, but I need to understand -- make sure I understand exactly what the question was.

You hired [ GGA ], external...

Yes, the council.

And raised the recommendations. My question is, did you implement these recommendations?

The committee of the Board that is in a charge of compensation process the recommendation and did implement the one part that they felt were appropriate.

Okay. Thank you.

Okay. We're going to move forward now with the ballot on this matter. The motion will now be voted by a way of ballot. I've been informed that the scrutineer has already handed out ballots to those persons entitled to receive a ballot. In order to pass, the omnibus plan resolution must be passed by a majority of the votes cast by shareholders present in-person or represented by proxy at the meeting. [Voting]

And the scrutineer has counted the votes, am I understanding, is that right, Matt?

Correct.

Okay. The scrutineer has advised me that the votes cast for and against the motion are now completed. Based on results of that vote, I declare the Omnibus plan resolution passed. Thank you very much, everybody. As the formal business of the meeting is now concluded, I will entertain a moment -- motion, excuse me, to terminate the meeting.

I so move.

Moved by Mr. Dewey. May I have a seconder, please?

Just a second. What about the discussion on financial performance of the company?

As I indicated at the beginning of the meeting, there will be a presentation subsequent to this about the financial performance of the company by our CEO. Is there a seconder, please?

I second the motion.

Seconded by Mr. Michael Wolfe. All in favor, please signify by raising your hand. [Voting]

I declare the motion passed and the meeting is now terminated. As set out of the notice of meeting is now terminated, I wish to thank you for attending, and I now declare the meeting to be closed. We will proceed with a company presentation, followed by a question period. Thank you very much for coming today. Okay. I will turn it over now to Mr. Dewey for the presentation. Yes?

You did not distribute financial statement along with management circular?

We did. It's in the documents that you received. There's -- there are copies there. There are copies at the front and there are copies right there on the side table, David, if you'd like. Yes?

This is the circular.

I don't know, that might be somebody else's, but is there enough there Kelly? Okay. So I just want to confirm that Mr. Gelerman has received the information that you asked for, David?

Yes, thank you.

Okay. David -- Randy, please go ahead with your presentation. Maybe -- okay. Thank you.

Good morning, everyone, and welcome to the 2019 Annual General Meeting for Baylin Technologies. We've provided masks and social distance spacing and attempted to provide all the necessary protocols to keep everyone safe. If you're joining us over the phone, please go to our website and open the Annual General Meeting presentation, which you'll find under the Investor Relations button at the top of the main menu, just under our logo on the home page. I'll give you a moment to turn to the presentation. We have obviously the benefit of being in the room, and the presentation is on the screen in front of us. We are obviously delayed the timing of our AGM due to government restrictions that were present in May, when we normally do our AGM. We have prepared our presentation to include the results of the first half as well of 2020 to make this a more meaningful overview, and I am open to taking questions for those here or on the line. Okay, I trust that you have the presentation in front of you. Turning to the second slide, the forward-looking statements. Please read this at your leisure. A quick summary, the comments and statements I'm making today could imply future events, prospects, financial performance that are subject to risks, uncertainty and assumptions. Please do not place undue reliance upon them as we will not be updating those statements unless legally required. Please read that closely, when you can, and our annual information form, which is filed on sedar.com. The next slide is the agenda. I will cover the 2019 key accomplishments and strategic initiatives, along with financial performance, our Q2 2020 results as well the Massive MIMO factory update and our 2020 second half of the year outlook. Slide 4, moving to Slide 5. The key financial accomplishments was evidenced with a 13% increase in revenue over the prior year. Additionally, gross profit was up 8%. However, we had a $2.8 million decrease in adjusted EBITDA due to in large part by the longer-than-anticipated integration of Advantech and Alga. We have experienced some raw material issues in Q2 and early -- sorry, Q1 and early Q2 of the prior year, plus a delay in the move of Advantech into Alga's building. All that is behind us, but it did create a timing problem for us. As you know, we closed our senior debt financing with HSBC and RBC in Q2 2019, and that relationship has gone well for us, and particularly, of course, with the challenges of this year, which I'll address in a moment. We won a large opportunity for Massive MIMO from a Tier 1 network equipment supplier, which required us to build a factory in Vietnam dedicated to this product line. We won this position on a long list of bidders as this is new and exciting 5G technology that very few companies in the world really have the capability of doing and some not even the opportunity to contribute in such a market. Lastly, our grand opening of our new facility in Montreal for Advantech and Alga took place and brought these 2 competitors together and operating as 1 company. Slide 6 outlines some of our key progress by Galtronics. They have dominated the small cell market in North America for a number of years. We made a stark move in base station antennas as this was done in parallel with our offerings in that business unit. We achieved some initial commercial success in the first half of 2019, but were set back by some industry CapEx pullbacks that were imposed -- that imposed some delays for the rollout of the notable 5G on the small cell side, most specifically. I felt that the impact through until COVID-19 continued, and of course, that hit us in Q1. Galtronics has advanced several new products in both the small cell and base station categories. And they've also won some very important positions with network carriers in North America for small cell antennas. Obviously, the continued ban of Huawei products in pushing network operators towards Ericsson, Nokia, CommScope and Samsung, which does benefit us as we have existing relationships with those companies. Turning to Slide 7, Advantech and Alga. We have invested heavily into the revamping of our entire product line in preparation for a move into the military, radar and government systems market. Commercial SATCOM looks promising with the new LEO/MEO constellations coming, but these markets are, of course, very large, and on that side, it's definitely a hand-and-glove fit for Advantech. The product overhaul and new system architecture was finished last month, and our first order was placed for delivery in the beginning of 2021. The ability for Advantech to move up stack and compete on the system side with these advanced new product portfolio will put them in a very unique position within that sector. Additionally, Galtronics has introduced Advantech to a Tier 1 North American carrier and made several inroads with this customer, Advantech won a 5G backhaul program with that carrier early this year, and they are set to deliver their second system in the Q3. The move of Advantech into the network operators was a potential synergy that we have seen materialized with the new products we now provide. Turning to Slide 8, it outlines the financial results, which are showing they are moving in the right direction up and to the right on a trend basis. However, you could see the impact of Q3 and 4 of 2019 with the CapEx impact and the reductions that we have seen. And then, of course, the Q1, Q2 COVID impact that has set us back on our growth trajectory on both the top and bottom line. Although these are temporary in nature, they're still challenging. The next 2 pages, Slide 9 has the P&L summary. And the revenue growth on Page 10 demonstrates that we had good momentum and trajectory prior to Q3 last year in the last 3 to 4 quarters has, for 2 reasons, softened that progress. However, the long-term outlook for these business units continues to remain bullish for the reasons of 5G and the new constellations and our move into new markets. We expect to see the resurgence towards these long-term macro drivers to create momentum in the medium term. Turning to Slide 12 on the income statement. COVID has obviously impacted each and every person in many ways and then, of course, each and every business as well. The comparison to last year of Q2 is an apples-to-oranges-type view. So I think the comparison of Q2 from Q1 shows 3 very important things for us. First of all, we drove down our OpEx by $6.5 million per year, and we also eliminated a significant number of positions and got our operating costs down. And the second is the EBITDA in Q2 was the highest in the past 4 quarters, which is significant in light of the fact that COVID was still hitting businesses quite hard in that period. And third, revenue was up 14%, and the rebound came from higher-margin areas of our business. Slide 14 is an update on our 5G Massive MIMO business. And as I mentioned, we have been selected as a vendor to supply Tier 1 network equipment provider with MMU antenna products. The significance of this initiative, there's the need for this type of product. It's the one of the fastest-growing segment within 5G antenna market on the international stage. The next 8 years shows this industry is set to grow to $21 billion, which is likely on an annualized basis. The antenna component, at least 10% of that, which is a TAM for us of $2 billion. At the moment, there is only a couple of competitors in this space able to even address this market, and we are chosen as the larger field to be the next one. Our new factory and the evolution of our engineering group in this area is an exciting opportunity for us to grow. The pre-COVID outlook had this starting for us in Q2 of this year, but with the delays in our factory completion due to the travel issues in Vietnam, we are looking to start production in the second half of Q4. We have phased a 6-month delay due to COVID. At the moment, things are on track to hit this milestone, but we are cautious as the situation remains fluid with the Vietnamese government and their visa and travel policies. Turning to Slide 16. Our outlook remains exciting with 5G and the new SATCOM constellations set to expand as well our product development has put us into the opportunity markets of military and radar. We have new outstanding technologies and are excited about what lies ahead. And as you can see on Slide 17, the prospects for Galtronics are equally as robust with the expansion of our market opportunities. We have experienced market setbacks as we evolve from LTE world into the 5G world and COVID-related impacts that are outside of our direct control. We know these markets are significant, but the timing can create some short-term challenges here. We have felt the impact over the past 12 months. And with COVID likely, it will take some time to get resolved. We remain cautiously optimistic with all the positive reasons we've expressed. The long-term momentum appears clear. It's the short-term uncertainties of the broader economy that creates some thoughtful caution. We have been fortunate to be considered an essential service through this entire COVID period, and that remains a pillar moving forward. If things become more difficult before a vaccine is found, then we are poised to continue operating and providing essential wireless connectivity to support the world's fight in this disease. Lastly, on Slide 18. We are focused on organic growth, cost containment and profitability, including generating cash. We're not focused on inorganic growth at this time. Although we remain open to opportunities, we're making no outbound calls. We are hyper-focused on managing our assets in our end markets as we have them today. That concludes my formal presentation. And if I can ask the operator for those in attendance on the line, if there's any questions.

[Operator Instructions] There are no questions from the phone.

Okay. We have a question in the room?

There's David in the room. Yes.

Why company suffered such massive losses in 2019. pre-COVID, $19 million were lost in revenue and losses.

Well, as we pointed out, we had some setbacks on the integration of Advantech and Alga, obviously, to that period of time. And as well, we had a step back in the second half of the year related to the CapEx pullbacks by carriers. So that impacted the Galtronics as well as the impact...

And so how would you explain to shareholders what -- Advantech was making money every single year from its inception in [ 1988 ] to divestiture to Baylin in '19 -- 2018, every single quarter, every single month since inception. And immediately upon acquisition, company started losing money and declared massive losses, like the [ $16 ] million or [ $13 ] million in the last year. How is it possible? Is it a result of good management, good stewardship and reign of CEO and President of the company?

Mr. Gelerman, ridicule and statements of that nature will not be accepted in this meeting. Proper questions are accepted. You have a right to ask questions, but you do not have the right to speak that way to our management.

Okay. No problem. So how is Mr. Dewey will explain what company was making money every single month in its existence, immediately start losing money and losing -- it generated cash, but on your financial statement reports massive losses?

Well, there's a couple of things there. So one, the integration, obviously, taking over the business certainly pose some challenges for us, no doubt. The investments that we had to make in the product that was aged that we inherited from the previous owner created an investment that was significant, that helped us to advance the platforms in preparation for some new markets that were coming and some opportunities that we had faced. And so those created some challenges, of course. And that is why we had some difficulties in 2019. We continue to be very bullish on the future of SATCOM and on the future of Advantech. Obviously, we inherited a company with a great name and international reputation for products. So we are bullish on the future of the products.

What I understand is Advantech losing a lot of ground in many parts of the world, like MTN was lost and other accounts due to nonmanagement -- not properly managing this account. But -- and also looking in your financial statement, I cannot find what you're recording any provisions for lawsuit between former owners of Advantech and Baylin, which is close to $20 million that remains served omnibus suit. Why is not -- it's not reflected here?

Well, it is fully disclosed in the notes of the financial statements. Any...

Can you point me to the note?

Sure.

Sorry, maybe it is here, but I cannot find. Just the financial statements.

And while I'm looking for it, we need to assess the likelihood and the quantum of it. And if we determine that, that -- that the likelihood of success and the quantum is undetermined...

Of course. Of course.

Then we don't actually put a provision in the actual numbers.

Okay. But don't shareholders entitled to know about it?

Yes, and it is disclosed. I'll just have to find it in the notes.

This is rest of the market capital -- almost half of the market cap of the company?

If you want to ask any other questions while I find it, go ahead.

Okay. I have -- you mentioned what you -- saved $6.5 million of...

OpEx?

A year ago on the account opening in facility center of excellence for Advantech. You recently declared what -- it's given new future and bright future for Advantech employees. How is it possible that all the Advantech employees were laid off during this process? And none of other like, Alga in the same facility, not a single person laid off?

That's incorrect, actually. So we have laid off on both the Advantech and the Alga side. It has been -- affected both parties. Obviously, Advantech was the larger company. And with the consolidation of the products that we did, we didn't need as much labor, so it ensued layoffs as a result of it. So yes, it was part of the optimization of that and to return the company to its profitable victory.

Do you see what management did related to lay off and you didn't lost vital expertise, which you will not be able to easily replenish or replaced?

We did lose some expertise, but it was on a historical platform that we no longer support. So yes, unfortunately, as a result of the consolidation, there was some expertise that was lost, but that was expertise that we did felt that wasn't necessary in the future.

Okay. Michael, were you able to find the note on that matter?

Page 54.

Page 54?

Financial statements. There's a section...

I only read 39 so far.

There's a subsection heading called legal proceedings, and it notes the claims both ways.

Can you say approximately what place? So your claim is 5,000 -- $5,560,000, it's incorrect. You were...

At the time of the statements, that was correct. At the time we issued these statements.

Yes, you're vote consequence event, do you think shareholders don't have rights to know that you will select omnibus claim? And now claim of former owners of Advantech is well and close to around $20 million?

At the time of the statements, some of those weren't claims against the company. They were...

I understand. I understand. But you're not -- you're holding the other meeting on -- clearly, not for August.

They were offsets.

You're holding annual meeting on 13th of August do you think what -- 50% of market capitalization [indiscernible] company is not -- while it's not -- it's subsequent -- significant event, but you should not be disclosing it...

Mr. Gelerman, these statements have been approved by the Board of Directors unanimously. They are all on the line listening right now. They have heard your question. And I will say that we have made this is record, this approval subject to our best business judgment as fiduciaries, as members of the Board of Directors. We accepted management's recommendations, considered it carefully. And if we want to change it, we would have done so. So your question should be probably directed to the Board of Directors, not to management.

Right now, it's a general assembly. General assembly, it's above Board of Directors, for your knowledge.

I'm not -- you don't have to tell me how to run this meeting, Mr. Gelerman. You can stop right now. I'm in charge of the meeting, not you. And I will tell you that right now, the question that you've asked is something related to the statements that were published, including the legal matters. You've asked now several questions, and you keep directing the question to management. But I'm reminding you with absolute clarity, and don't you forget, that the Board of Directors approved these statements.

Just like you mentioned, you got fiduciary duties in front of all shareholders to fairly and transparently...

Right. And we will continue to exercise that as well as appropriate business judgment. Thank you. Any further questions?

This is the reason Mr. Royer, one of the reason I resigned from the Board. One has to -- what -- I can ask questions in front of entire shareholders, not just a Board.

And you're welcome to do so and we've given you the floor to do so. Thank you.

Thank you, Mr. Chairman.

Is there anything else that you'd like to bring up before the meeting, Mr. Gelerman?

Yes. I would like to talk about Mr. Dewey's remuneration, why it's increased so much in the last year? When company is going down in performance, Mr. Dewey was paid in shares, and now it's increased to 1.3 million. And if I get report from the same Wall Street, its way above average of a group of companies in -- below $0.25 billion market cap.

Right. The compensation of Mr. Dewey was set over 5 years ago, and the options that were -- it was awarded that time had a 5-year expiration on them. They expired in 2019. Unfortunately, and I would concur with your viewpoint about this, and Randy would as well, he was required to exercise his options. We had no option to extend them. There is no provision. We did a lot to do so. Am I right, Phil, in this regard? And therefore, it was required to exercise them. So we were following along what exactly was approved many years before. And unfortunately, it was expiring, and there was no -- there's no option for removing that compensation, nor for changing it, nor for extending it, at the time. So I understand your statement. I understand your point. I think Mr. Dewey would recognize it as well. But unfortunately, these were things that were set up many years before. Any further questions, David?

I think management should focus on business and show performance. And reward has to be for performance, not on discretion of individuals. And right now, I don't see performance. I don't -- I didn't see it from day 1. I didn't see it from the very first months I came to the Board, and I don't see it now.

Okay. Thank you.

I resigned from the Board on March 31. So I -- so look at stock price, its hovering around $1. And it's really, if you look at value -- volume of transaction, it's 1,000, 2,000 at time of transaction. It's a highly unliquid stock now and I'm very concerned about it. I am probably second largest private investor in this company, and therefore, it's my money what you're playing with. So I would like really you to have a back look and understanding and take the decision how to make company profitable.

Thank you, Mr. Gelerman. I do appreciate your input on that, and we will certainly it take under due consideration. Thank you. Okay. Anybody else? Anything else on the line, Kelly? Okay. Okay. Thank you. With that, we'll close this meeting. Thank you very much for coming. We appreciate your attendance and we thank everyone for your support and your good questions. Thank you.