Cann Group Limited (CAN.AX) Earnings Call Transcript & Summary

Good morning, everyone. My name is Allan McCallum, and I'm the Chairman of Cann Group Limited, and I will be chairing today's general meeting. Today, we are very pleased to welcome you to our first virtual general meeting held on a platform provided by our share registry, Link Market Services Limited. Due to the current restrictions on public gatherings as a result of the COVID-19 pandemic and in light of the determination made by the Federal Treasurer to modify the operation of the Corporations Act 2001 and the Corporations Regulations 2001 to allow companies to hold virtual meetings, we have determined to hold this meeting virtually. We hope that holding a virtual meeting will assist to curb the spread of COVID-19 virus and encourage greater participation and engagement amongst our shareholders. Before we begin the meeting itself, I'm going to hand over to our company's Secretary, Ms. Geraldine Farrell, who will run through some of the technical aspects of the -- for the conduct of this meeting. We will then commence the business of the meeting. Thanks. Geraldine?

Thank you, Mr. Chairman. Shareholders who are in attendance today have logged in through the virtual meeting website. At the top of the web page, there are green boxes to ask a question and get a voting card. If you wish to vote or ask a question at the meeting, you will need to provide your shareholder details or your proxy details to access these parts of the meeting. Once you have provided your details, you will see an electronic voting card with all of the 5 resolutions to be voted on by shareholders at this general meeting. The Chairman will ask everyone to submit their votes at points in the general meeting when he demands a poll for each resolution. Please make any changes required to your electronic voting cards at this time and then submit your voting cards at the end of the meeting. The voting card remains eligible until the voting has closed 5 minutes after the close of the general meeting. Once voting has closed, all voting cards, both submitted and unsubmitted, will automatically be submitted and cannot be changed. At the conclusion of the general meeting, a red bar with a countdown timer, will appear at the top of the webcast and slide windows advising the remaining voting time available to shareholders. You will only be able to ask a question online after you have registered. [Operator Instructions] Finally, if the online platform has any technical difficulties during this meeting, I will notify the Chairman. If this happens, the Chairman may choose to call a short recess of the meeting to address the issue. If you have any difficulties, I also ask you to refer to the Virtual General Meeting Online Guide that was circulated with the notice of general meeting or to dial the help line that is indicated on the meeting page. I will now hand back to the Chairman to conduct the meeting.

Thank you, company Secretary. Now for the formalities of the meeting. Today's meeting has been properly convened. It has been called by a notice of general meeting dated the 11th of May 2020, and sent to shareholders by the company's secretary in accordance with the company's constitution. I note that there is a quorum present, and I declare the meeting open. Only shareholders of Cann Group proxy holders or authorized company representatives in the case of corporate shareholders are entitled to make comments or ask questions on business put to the general meeting or to vote on the resolutions. All other attendees are guests and are welcome as observers. Please note that because this is a general meeting of the company to deal with specific items of business, and this is not an Annual General Meeting, questions may only be in relation to the 5 items of business of the meeting that are set out in the notice of general meeting. The agenda for the general meeting is to deal with the 5 resolutions set out in the notice of general meeting. Voting on each of the resolutions will be conducted by way of a poll. As noted by the company's secretary shareholders attending the meeting online will be able to cast their vote using the electronic voting card received when online registration is validated. Please refer to the virtual annual meeting online portal guide or use the helpline specified. As also noted by the company's secretary, there will be an opportunity for shareholders to ask questions on each matter being put to shareholders. The resolutions. Ladies and gentlemen, we now come to the formal part of the meeting. Matters require resolution, which are outlined in the notice of general meeting. The resolutions for consideration today may only be voted on by shareholders, proxy holders and shareholder company representatives. I ask that in the interest of fairness to all shareholders attending this meeting that anyone wishing to speak should be as concise as possible and be considerate to other shareholders wishing to ask questions. For the sake of good order, shareholders should speak once on a resolution being put, and the questions raised should relate directly to the matter being considered. Now moving to the resolutions. I hereby demand that each resolution set out in the notice of general meeting be decided by a poll. I appoint Jim Kompogiorgas of Link Market Services as returning officer to conduct the poll and report the results of the poll to me. As noted in the notice of general meeting, I intend to vote all undirected proxies in favor of each of the items of special business. Each of the resolutions 1 to 4 set out in the notice of general meeting is to be considered as an ordinary resolution, and as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. Resolution 5 set out in the notice of general meeting is a special resolution and as such, must be approved by at least 75% of the votes cast by shareholders entitled to vote and voting on the resolution. Resolution 1, ratification of prior issue of shares to the CSIRO. Resolution 1 concerns the prior issue of shares to CSIRO, the details of which are further set out in the resolution itself and in the notice of general meeting and the explanatory memorandum. I now move that for the purposes of Listing Rule 7.4 and for all other purposes, the shareholders of the company approve and ratify the prior issue of 550,278 fully paid ordinary shares in the capital of the company to the Commonwealth Scientific and Industrial Research Organization pursuant to the share purchase agreement dated 24th of October 2018 between CSIRO and the company on the terms and conditions set out in the explanatory memorandum accompanying the notice of general meeting. The resolution and the summary of the proxy votes received prior to the meeting appear on the slide. Are there any questions regarding this resolution? You may submit your questions at this point. I'll first take questions from shareholders watching online who have sent in their questions online in a text format. No, we have no questions there. So are there any questions from telephone participants?

I can confirm that there's no questions from any participants for this resolution.

Thank you. I hereby demand a poll in respect of the resolutions and that the poll will now be conducted. Please select either for, against or abstain for resolution 1 on the electronic voting card. [Voting]

Resolution 2 is the ratification of prior issue of convertible notes. Resolution 2 concerns the prior issue of convertible notes to certain investors, the details of which are further set out in the explanatory resolution itself in the notice of general meeting and explanatory memorandum. I now move that for the purposes of Listing Rule 7.4 and for all other purposes, the shareholders of the company ratify and approve the prior issue of 7,255,671 convertible notes to the investors specified in, and on the terms and conditions and in the manner set out in, the explanatory memorandum accompanying the notice of general meeting. The resolution and the summary of the proxy votes received prior to the meeting appear on the slide. Are there any questions regarding this resolution? We will deal with online questions first. There are no questions there. Are there any questions from telephone participants, please?

I can confirm that there are no questions on this resolution.

Thank you. I hereby demand a poll in respect of this resolution, and the poll will now be conducted. Please select either for, against or abstain for resolution 2 on the electronic voting card. [Voting]

Resolution 3 concerns the approval of the issue of new shares to CSIRO, the details of which are further set out in the resolution itself and in the notice of general meeting in the explanatory memorandum. I now move that for the purposes of Listing Rule 7.1 and for all other purposes, the shareholders of the company approve the issue to Commonwealth Scientific and Industrial Research Organization of 325,272 fully paid ordinary shares in the capital of the company 2019 pursuant to the terms and conditions of the share purchase agreement dated 24th of October 2018 between CSIRO and the company, which is the share purchase agreement in relation to the provision of research and development services to the company from CSIRO under the researchers umbrella agreement dated the 24th of October 2018, between CSIRO and the company during the quarter ending on December 31, 2019; b, also up to a maximum of 269,230 fully paid ordinary shares in the capital of company pursuant to the terms and conditions of the share purchase agreement in relation to the provision of research and development services to the company from CSIRO under the research services agreement during the quarter ending on the 31st of March, 2020; and c, such a number of fully paid ordinary shares in the capital of the company, new shares, pursuant to the terms and conditions of the share purchase agreement with such number of new shares to be determined in accordance with the terms and conditions of the share purchase agreement in relation to the provision of research and development services to the company from CSIRO under the research service agreement during the quarter ended on the 30th of June, 2020, on the terms and conditions in the manner set out in the explanatory memorandum accompanying this notice of general meeting. The resolution and the summary of the property votes received prior to meeting now appear on the slides. Are there any questions regarding this resolution? And we will deal with the online questions first. There are no online questions. Are there any questions from the telephone participants, please?

I can confirm that there are no questions on this resolution.

Thank you. I hereby demand a poll in respect of this resolution, and the poll will now be conducted. Please select either for, against or abstain for resolution 3 on the electronic voting card. [Voting]

Resolution 4 concerns the approval of the issue of new shares to Pure Cann New Zealand Limited now named as Zalm Therapeutics Limited, the details of which are further set out in the resolution itself and in the notice of general meeting in the explanatory memorandum. I now move that for the purpose of Listing Rule 7.1 and for all other purposes, the shareholders of the company approve the issue to Zalm Therapeutics Limited, formerly known Pure Cann New Zealand, of such number of fully paid ordinary shares in the capital of the company pursuant to the shareholder subscription deed dated the 21st of April 2020 between Botanitech Pty Ltd, a wholly owned subsidiary of the company, the company and Zalm Therapeutics, with such number of new shares to be determined in accordance with the terms and conditions of the share subscription deed on the terms and conditions and in the manner set out in the explanatory memorandum accompanying this notice of General Meeting. The resolution and the summary of the proxy votes received prior to the meeting appear on the slide. Are there any questions regarding this resolution? We will deal with online questions first. We have no online questions. We will now go to the telephone questions, please. Are there any questions?

I can confirm there are no questions on this resolution.

Thank you. I hereby demand a poll in respect of this resolution, and the poll will now be conducted. Please select either for, against or abstain for resolution 4 on the electronic voting card. [Voting]

Resolution 5 concerns the approval of amendments to the company's constitution, the details of which are further set out in the amended constitution, which are hereby tabled for the purpose of this general meeting. The proposed amendments to the constitution were delayed in the -- detailed in the explanatory memorandum and a copy of the proposed amended constitution as tabled at this meeting has been available to all shareholders to view on the company website since the 11th of May, 2020, the date of the notice of this general meeting. I now move that the constitution of the company be amended as set out in the amended constitution table that this meeting is signed by the chairman of the meeting for the purposes of identification. The resolution and the summary of the proxy votes received prior to meeting appear on the slides. Are there any questions regarding this resolution? And we'll deal firstly with the online questions. There are no online questions. Are there any questions from the telephone participants, please?

I can confirm that there are no questions on this resolution.

Thank you very much. I hereby demand a poll in respect of this resolution and that the poll will now be conducted. Please select either for, against or abstain for resolution 5 on the electronic voting card. [Voting]

Thank you, everybody. That concludes the special business for this meeting. It has now come to the end of the meeting. Shareholders participating via the virtual meeting website should now submit their votes. The voting will remain open for 5 minutes after the meeting closed. The returning officer will report the results of the poll conducted for each resolution to me as soon as possible, and the results will be announced to the ASX after the conclusion of the meeting. I now declare the meeting closed, and thank you for your participation today.