Fadel Partners, Inc. (FADL) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Fadel Partners Annual General Meeting. [Operator Instructions] I would now like to hand you over to the Chairman of today's meeting, Simon Wilson. Simon, good afternoon, sir.

Thank you. The meeting will now come to order. I'm Simon Wilson, Chair of the Board of Directors of Fadel Partners, Inc. I welcome you to the company's 2025 Annual Meeting of Stockholders. Tarek Fadel will make some brief comments on the current operations of the company after the voting is conducted and you will have an opportunity to ask questions at that time. The directors presence either in-person or by Zoom are Tarek Fadel, Joe Gruttadauria, Sally Tilleray and myself. The officers present are Tarek Fadel, Chief Executive Officer; and Mark Plotkin, Chief Financial Officer. I will chair the meeting and Lance Lehnhof, a partner at Buchalter PC, and outside counsel to the company, has been appointed to act as Secretary and Inspector of Elections for the meeting. Will the Secretary of the meeting produce the following documents for filing with the minutes of the meeting, copies of the printed notice of annual meeting stating the time, place and purpose thereof; and the stockholder list of the company as of the 14th of October 2025. I direct that such notice and stockholder list and accompanying documents be filed with the minutes of this meeting. Will the Secretary please report as to whether a quorum is present?

We have a quorum present at the meeting represented either in person or by proxy.

Thank you. As a preliminary matter, I would remind all attendees that as explained in the notice for this meeting, shareholders are not permitted to vote by video conference at this meeting. In order to vote your shares, you must either be attending this meeting in person or have previously voted by proxy in accordance with the requirements and by the deadlines noted in the notice for this meeting. The first order of business before the meeting is the presentment of copies of the company's audited financial statements and the auditor's report thereon for the financial year ended 31st December 2024.

On behalf of the company, I hereby make the motion that the presentment be ratified.

I second the motion.

I direct that a vote of the stockholders be taken for or against the presentment of copies of the company's audited financial statements and the auditor's report thereon for the financial year 31st December 2024. I declare the polls closed on that motion. The next order of business before the meeting is the advisory approval of the directors' remuneration report.

On behalf of the company, I hereby make the motion that the advisory approval be ratified.

I second the motion.

I direct that a vote of the stockholders be taken on the advisory approval of the directors' remuneration report. I declare the polls closed on this motion. The next order of business before the meeting is to vote on the reelection of Tarek Fadel to the Board of Directors to serve until 2028 Annual Meeting or until his successor is duly elected and qualified. Sally, can you make that motion, please?

I second the motion.

I second the motion.

I direct that a vote of the stockholders be taken for or against the appointment of Tarek Fadel to the Board of Directors to serve until 2028 Annual Meeting or until his successor is duly elected and qualified. I declare the polls closed on the election of Tarek Fadel. The next order of business before the meeting is to vote on the ratification of the appointment of Crowe U.K. LLP, as the company's auditor to hold office until the next annual meeting.

On behalf of the company, I hereby make the motion that the appointment be ratified.

I second the motion.

I direct that a vote of the stockholders be taken for or against the appointment of Crowe U.K., LLP to serve as the company's auditor to hold office until the next annual meeting. I declare the polls closed on this motion. The next order of business before the meeting is the vote on the Board's authorization to determine the auditor's remuneration.

On behalf of the company, I hereby make the motion that the authorization be ratified.

I second the motion.

I direct that a vote of the stockholders be taken for or against the Board's authorization to determine the auditor's remuneration. I declare the polls closed on this motion. The next order of business before the meeting is to vote on the authorization of the Board to issue common stock or grant rights to subscribe for or convert any securities into common stock up to the aggregate par value of USD 6,069, which represents approximately 30% of the issued common stock of the company as of 30th September 2025.

On behalf of the company, I hereby make the motion that the authorization be ratified.

I second the motion.

I direct that a vote of the stockholders be taken for or against the Board's authorization to issue common stock or grant rights to subscribe for or convert any securities into common stock up to an aggregate par value of USD 6,069, which represents approximately 30% of the issued common stock of the company as of the 30th of September 2025. I declare the polls closed on this motion. The next order of business before the meeting is to vote on resolution 7 regarding the disapplication of shareholders' preemption rights when issuing common stock for cash as set forth in the notice for this meeting previously sent to you.

On behalf of the company, I hereby make the motion that Resolution 7 be ratified.

I second the motion.

I direct that a vote of the stockholders be taken for or against resolution 7 regarding the disapplication of shareholders' preemption rights when issuing common stock for cash as set forth in the notice to this meeting. I declare the polls closed on this motion. The next order of business before the meeting is to vote on resolution 8 regarding the disapplication of shareholders' preemption rights when issuing common stock for cash as set forth in the notice for this meeting previously sent to you.

On behalf of the company, I hereby make the motion that Resolution 8 be ratified.

I second the motion.

I direct that a vote of the shareholders -- stockholders be taken for or against Resolution 8 regarding this application of shareholders' preemption rights when issuing common stock for cash as set forth in the notice to this meeting. I declare the polls closed on this motion. The opportunity to vote on all questions before the meeting having been given, I declare the polls closed. Is there any other business to be brought before this meeting or any questions or comments concerning the proposals submitted for action at this meeting? So we do have some questions. I'm going to allow Mr. Lehnhof time to tabulate the results, and we will take a question at the end following the opportunity that Tarek will have to make some comments about operating.

Mr. Chairman, I have the results if you're ready.

Thank you, Mr. Lehnhof. Would you now please report your results?

Certainly. Mr. Chairman, I report that 13,453,277 votes were cast for the presentment of the company's audited financial statements and the auditor's report thereon for the financial year ended 31 December 2024 and 0 votes against 0 withheld.

You've heard the results of the voting. I declare that the presentments of the company's audited financial statements and the auditor's report thereon for the financial year ended 31st December 2024 has been ratified.

Mr. Chairman, I report that 14,453,277 votes were cast for the advisory approval of the directors' remuneration report. 0 votes were cast against and 0 votes withheld.

You've heard the results of the voting. I declare that the directors' remuneration report has been approved.

Mr. Chairman, I report that 14,453,277 votes were cast for the reappointment of Tarek Fadel as Director of the company and 0 votes against and 0 withheld.

You've heard the results of the voting. I declare that Tarek Fadel has been reappointed as a Director of the company.

Mr. Chairman, I report that 14,453,277 votes were cast for the appointment of Crowe U.K. LLP as the company's auditor until the next annual meeting. 0 votes were cast against and 0 votes withheld.

You've heard the results of the voting. I declare that the appointment of Crowe U.K., LLP as the company's auditor until the next annual meeting has been ratified.

Mr. Chairman, I report that 14,450,497 votes were cast for the authorization of the Board to determine the auditor's remuneration. 0 votes were cast against and 2,780 votes were withheld.

You've heard the results of the voting. I declare that the directors' authorization to determine the auditor's remuneration has been ratified.

Mr. Chairman, I report that 14,450,497 votes were cast for the authorization of the Board to issue common stock or grant rights to subscribe for or convert any securities into common stock up to an aggregate par value of USD 6,069, representing approximately 30% of the issued common stock of the company as of 30th September 2025. 0 votes were cast against and 2,780 votes were withheld.

You've heard the results of the voting. I declare that the authorization of the Board to issue common stock or grant rights to subscribe for or convert any securities into common stock up to an aggregate par value of USD 6,069, which represents approximately 30% of the issued common stock of the company as of 30 September 2025 has been ratified.

Mr. Chairman, I report that 14,453,277 votes were cast for Resolution 7 regarding the disapplication of shareholders' preemptive rights when issuing common stock for cash as set forth in the notice for this meeting, 0 votes were cast against and 0 votes withheld.

You've heard the results of the voting. I declare that Resolution 7 regarding the disapplication of the shareholders' preemption rights when issuing common stock for cash as set forth in the notice for this meeting have been ratified.

Mr. Chairman, I report that 14,453,277 votes were cast for Resolution 8 regarding the disapplication of shareholders' preemptive rights when issuing common stock for cash as set forth in the notice for this meeting. 0 votes were cast against and 0 votes withheld.

You've heard the results of the voting. I declare that Resolution 8 regarding the disapplication of shareholders' preemption rights when issuing common stock for cash as set forth in the notice for this meeting have been ratified. This concludes the formal portion of the meeting. At this time, Tarek Fadel, company's CEO, will now make a brief statement regarding the company's affairs, which I believe will also answer one of the questions received.

Thank you, Simon. Good afternoon, and thank you all for joining us today. I'd like to begin by providing a trading update. The company remains on track to achieve its full year revenue guidance of USD 12 million to USD 12.9 million and its adjusted EBITDA loss target, which is expected to fall between negative $1 million to negative $0.8 million, consistent with the market expectations. Cash at the year-end is expected to be in the range of $0.8 million to $1 million, ahead of our previous guidance, reflecting continued discipline in collections and cost management. The company believes that it will have sufficient cash through the end of 2026 without having access -- without having to access its available $1 million line of credit facility, which remains undrawn. For the 9 months ended 30th of September 2025, the company has secured 8 new customers, including Ferrero, Handcraft Manufacturing, Synaptics, Viz Media and Zak Designs. New customer contracts and upsells to existing clients have contributed approximately $0.8 million in incremental recurring license ACG and $1 million in nonrecurring services revenue. These wins broaden the group's customer base and enhance the visibility of future recurring license revenues. On the innovation front, we're making strong progress with the much anticipated GA release of the product approval module, which is currently in beta release in early January of 2026, offering brand governance solutions for merchandise trade and logo licensors. In addition, Fadel has now productized several integrated generative AI capabilities into our existing IP management suite and Brand Vision products from leading vendors such as Amazon, Meta and OpenAI. These AI features include AI predictive analytics, AI identification and an in-application AI chatbot designed to deliver greater automation and efficiency for our clients. In 2026, we'll be releasing several AI agents through the Amazon marketplace and based on the Amazon AWS Bedrock Agentive AI platform. AI contract ingest and AI product approval review agents are planned for release in the first half of 2026, while additional AI agents are planned for release in H2 of 2026. We believe that these AI agents will strengthen our product offering, increase our recurring revenue and further differentiate Fadel in the licensing and brand compliance and governance marketplace. Further details on these developments were set out in numerous press releases, which were issued on the 2nd of October, the 9th of October and the 13th of October and are all available through the company's website. On the strategic review process, as previously announced earlier in the year, the Board initiated a process to explore strategic options for the business, aiming to unlock additional value for shareholders. Several expressions of interest were received. However, none presented a combination of value structure and certainty, which the Board could recommend to shareholders. Following a full assessment, the Board has concluded the process. Fadel will continue to focus on executing its organic growth strategy, expanding the customer base, maintaining investment in product development with a keen focus on Agentic AI solutions, growing license recurring revenue streams and maintaining strict cost management. Thank you for your continued support.

Thank you, Tarek. We do have a couple of questions. Mark, if you could answer the first one, I'll just make a comment about the second that the authorization to issue new shares that was passed ratified today, it is not our current intention to exercise that authorization. So that's the first point. And secondly, Mark, can you...

Sure. The number of issued shares -- outstanding shares are currently 20,231,250 shares.

Right. Thank you. At this point, I'd like to thank everyone very much for attending today's meeting and for the interest you've shown in the company's affairs. This concludes the meeting. Thank you, everyone.

Thank you very much, guys. If I may just jump back in there, and thank you all for your time this afternoon. On behalf of the Board of Fadel Partners, Inc., we would like to thank you for attending today's Annual General Meeting. That now concludes today's session. So good afternoon to you all.