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

Thank you for standing by, and welcome to the Cann Group Limited General Meeting. I would now like to hand the conference over to Mr. Allan McCallum, Chairman, Please go ahead.

Thanks very much, Melanie. Good morning, everyone. My name is Allan McCallum, and I'm the Chairman of Cann Group Limited. I will be chairing today's general meeting. Today, we're very pleased to welcome you to our virtual general meeting held on a platform provided by our share register, Link Market Service Limited (sic) [ Link Market Services Limited ]. Due to the current restrictions on public gatherings as a result of the COVID-19 pandemic, we have determined to hold this meeting virtually. Before we begin the meeting itself, I'm going to hand over to our Company Secretary, Ms. Geraldine Farrell, who will run through some of the technical aspects for the conduct of this meeting. We will then commence the business of the meeting. Thanks, Gerry.

Thank you, Mr. Chairman. Shareholders who are in attendance today have logged in through the virtual meeting website. At the bottom of the web page, there are 2 green boxes to get a voting card or to ask a question. 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 the electronic voting card with all of the 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 editable 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, Geraldine. 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 6th of August 2021 and sent to shareholders by the Company 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, proxyholders or authorized company representatives, in the case of corporate shareholders, are entitled to make comments or ask questions on the 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 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 6 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 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 help line specified. As also noted by the Company Secretary, there will be an opportunity for shareholders to ask questions on each matter being put to shareholders. Resolutions. Ladies and gentlemen, we now come to the formal part of the meeting, matters requiring resolution, which are outlined in the Notice of General Meeting. The resolutions for consideration today may only be voted on by shareholders, proxyholders 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 Meeting be decided by a poll. I appoint Jim Kompogiorgas of Link Market Services as the 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 item of special business. Each of the resolutions 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 votes cast by shareholders entitled to vote and voting on the resolution. Resolution 1, ratification of issues of shares under the placement. Resolution 1 concerns the issue of ordinary shares to certain institutional and sophisticated investors by way of a placement, the details 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 purpose of Listing Rule 7.4, shareholders ratify the prior issue of 32,472,724 ordinary shares in the company as set out in the explanatory memorandum which accompanies and forms part of the Notice of this Meeting. The resolution and the summary of the proxy votes received prior to meeting appear on the slide. Are there any questions regarding this resolution? You may submit your questions at this point. I will first take questions from shareholders watching online who have sent in their questions online in text format.

Mr. Chairman, we have no questions in relation to this resolution.

Thank you, Gerry. And are there any -- we've gone online now to the operator. Are there any questions from the telephone participants?

There are no questions from shareholders participating by telephone at this time.

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

Thank you. Slide 8, resolution 2, approval of proposed placement of shares to directors of the company. Resolution 2 concerns the participation in the placement by directors of the company. It is in 5 parts, resolution 2a through to 2e, reflecting the participation of 5 directors. The details of the proposed participation are further set out in the resolutions themselves and in the Notice of General Meeting and the explanatory memorandum. Resolution 2a, approval of proposed placement of shares to Allan McCallum displayed on the screen. I now move that for the purpose of Listing Rule 10.11, shareholders approve the issue of up to 545,455 ordinary shares in the company, an issue price of $0.275 to Mullacam Pty Ltd as the trustees for the McCallum Family Super Fund, a controlled entity of Allan McCallum on the terms set out in the explanatory memorandum which accompanies and forms part of this Notice of Meeting. The resolution and summary of the proxy votes received prior to the meeting appear on the slide. Are there any questions regarding the resolution? We will deal with online questions first.

Mr. Chairman, there are no online questions in relation to resolution 2a.

Thank you. And are there any questions from the telephone participants?

There are no questions from shareholders participating by telephone at this time.

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

Thank you. Resolution 2b concerns the approval of a proposed placement of shares to Philip Jacobsen, 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 purpose of Listing Rules 10.11, shareholders approve the issue of up to 2,727,273 ordinary shares in the company at the issue price of $0.275 to Phil and Maxine Jacobsen as trustees for Jayess Superannuation Fund, a controlled entity of Philip Jacobsen, on the terms set out in the explanatory memorandum which accompanies and forms part of the Notice of this Meeting. The resolution and a summary of the proxy votes received prior to the meeting appear on the slides. Are there any questions regarding this resolution? We'll deal with online questions first.

Mr. Chairman, there are no questions in relation to resolution 2b.

Thank you, Gerry. And are there any questions from the telephone participants, please?

There are no questions from shareholders participating by telephone at this time.

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

We'll now move to Slide 10. Thank you. Resolution 2c concerns the approval of a proposed placement of shares to Doug Rathbone, the details of which are further set out in this resolution itself and in the Notice of General Meeting and the explanatory memorandum. I now move that for the purpose of Listing Rules 10.11, shareholders approve the issue of up to 363,637 ordinary shares in the company at an issue price of $0.275 to Grapefull Pty Ltd as trustee for Grapefull Super Fund, a controlled entity of Doug Rathbone, on the terms set out in the explanatory memorandum which accompanies and forms part of the Notice of this Meeting. The resolution and the summary of the proxy votes received prior to the meeting appears on the slide. Are there any questions relating to this resolution? And we'll deal with the online questions first.

Mr. Chairman, there are no questions in relation to this resolution 2c.

Thank you. And with -- are there any questions from the telephone participants, please?

There are no questions from shareholders participating by telephone at this time.

Thank you. 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 2c on the electronic voting card. [Voting]

Thank you. Resolution 2d concerns the approval of a proposed placement of shares to Geoff Pearce, 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 purpose of Listing Rules, 10.11, shareholders approve the issue of up to 181,819 new shares in the company at an issue price of $0.275 to Egea Pty Ltd, a controlled entity of Pearce, on the terms set out in the explanatory memorandum and which accompanies and forms part of this Notice of Meeting. The resolution and summary of proxy votes received prior to the meeting appear on the slide. Are there any questions regarding this resolution? And we'll deal with the online questions first.

Mr. Chairman, there are no online questions.

Thanks very much, Gerry. And are there any questions from the telephone participants?

There are no questions from shareholders participating by telephone at this time.

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

Resolution 2e concerns the approval of a proposed placement of shares to John Sharman, 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 10.11, shareholders approve the issue of up to 72,728 ordinary shares in the company at an issue price of $0.275 to Amira Sharman, spouse of John Sharman, on the terms set out in the explanatory memorandum which accompanies and forms part of the Notice of 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? And we'll deal with the online questions first.

Mr. Chairman, there are no questions online in relation to this resolution.

Thank you. Are there any questions from the telephone participants?

There are no questions from shareholders participating by telephone at this time.

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

Resolution 3, ratification of prior issues of shares to CSIRO. Resolution 3 concerns the ratification of prior issue of shares to CSIRO, the details of which are further set out in the resolution itself in the Notice of General Meeting and the explanatory memorandum. I now move that for the purpose of the Listing Rule 7.4, shareholders ratify the prior issue of 387,595 ordinary shares issued to the Commonwealth Scientific and Industrial Research Organisation as set out in the explanatory memorandum which accompanies and forms part of the Notice of this Meeting. The resolution and summary of the proxy votes received prior to the meeting appears on the slide. Are there any questions regarding this resolution? And we'll deal with the online questions first.

Mr. Chairman, we've received no questions online in relation to this resolution.

Thanks, Gerry. And we have -- are there are any questions from the telephone participants, please?

There are no questions from shareholders participating by the telephone at this time.

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

Thank you. Resolution 4 concerns the ratification of the prior issue of shares to Harvest One in respect of the acquisition of the Satipharm business, 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 purpose of Listing Rule 7.4, shareholders ratify the prior issue of 4,278,615 ordinary shares to Harvest One Cannabis Inc in part consideration of the payment of the purchase price for the acquisition of the Satipharm business as set out in the explanatory memorandum which accompanies and forms part of Notice of this Meeting. The resolution and summary of the proxy votes received prior to the meeting appear on the slide. Are there any questions regarding this resolution, dealing with the online questions first?

Mr. Chairman, there are no questions in relation to resolution 4 online.

Thank you. And are there any questions from the telephone participants?

There are no questions from shareholders participating by telephone at this time.

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

Thank you. Resolution 5 concerns the approval of shares to be issued in respect of the acquisition of the Satipharm business, the details of which are further set out in the resolution itself in the Notice of General Meeting and the explanatory memorandum. I now move that for the purpose of Listing Rule 7.1, shareholders approve the issue of up to 5.5 million ordinary shares to Harvest One Cannabis Inc in consideration of the deferred payment of the purchase price for the acquisition of the Satipharm business as set out in the explanatory memorandum which accompanies and forms part of the Notice of this Meeting. The resolution and summary of the proxy votes received prior to the meeting appear on the slide. Are there any questions regarding this resolution, dealing with the online question first?

Mr. Chairman, there are no questions online in relation to resolution #5.

Thank you. And questions from the telephone participants?

There are no questions from shareholders participating by the telephones at this time.

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

Thank you. Finally, the last resolution for this meeting. Resolution 6 concerns the approval of the share purchase plan offer, 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 purpose of Listing Rule 7.1, shareholders approve the issue of up to 36,363,636 ordinary shares at an issue price of $0.275 per share under the proposed share purchase plan offer by the company on the terms set out in the explanatory memorandum which accompanies and forms part of the Notice of this Meeting. The resolution and the summary of the proxy votes received prior to meeting appear on the slide. Are there any questions regarding this resolution? And we'll deal with the online questions first.

Mr. Chairman, we do have 1 question in relation to this resolution, was asked by [ Mr. Miles Stojanovski ]. It's a question somewhat related to resolution 6 but the -- can the Chairman please update shareholders why we should participate in the share purchase plan? And the second part to the question is why the directors believe Cann is a sound investment. So Mr. Chairman, I'll hand over to you to answer those questions.

Thanks for that. Thanks, [ Mick ]. Regarding your question why the directors believe Cann is a sound investment. It's really not a matter that relates to resolution 6, and it's a matter of general business. These issues should be addressed at the AGM in November. So anyway, happy to take a call any time. Okay, are there any questions...

Mr. Chairman, sorry, there was a -- first part of that question was just in relation to why shareholders should participate in the share purchase plan.

Why they should participate in the share purchase plan? Sorry, I missed it. Well, participating in the share purchase plan allows them to participate and not be watered down going forward. In fact, under the new rules, the $30,000 limit does advantage the retail shareholders considerably over the institutional shareholders. And as such -- but it is each individual's decision, and they can seek advice on whether they should participate, but it's a good opportunity to participate in the growth of the business. Thank you.

Thanks, Mr. Chairman.

Thanks, Gerry.

We'll go on to the phone question.

Right. Are there any questions from the telephone participants?

There are no questions from shareholders participating by telephone at this time.

Thank you very much. I hereby demand a poll in respect to this resolution, and that poll will now be conducted. Please select either for or against or abstain for resolution 6 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 this meeting. I now declare the meeting closed, and thank you for your participation today.

That does conclude our conference for today. Thank you for participating. You may now disconnect.