LARK Distilling Co. Ltd. (LRK) Earnings Call Transcript & Summary

Good morning. My name is David Dearie. And as Chair of LARK Distilling Company, it is my pleasure to welcome you to the company's 2023 Annual General Meeting. I would like to start by acknowledging and paying respects to the traditional custodians of the land, wherever those participating at this meeting are located. This meeting is being held virtually, and shareholders will be able to participate, ask questions and cast direct votes at the appropriate time whilst the meeting is in progress. The company secretary has advised that we have complied with the relevant requirements for convening this meeting and that a quorum is present. The time is now 10 a.m. I formally declare the meeting open. I'm joined today by my fellow directors, Domenic Panaccio, Warren Randall and Laura McBain. Also in attendance is our Chief Executive Officer, Satya Sharma, our Chief Financial Officer; Iain Short; and Company Secretary, Melanie Leydin. In addition, we have representatives from the company's external auditors, RSM, in attendance at the meeting. The notice of the meeting has been given in accordance with the company's constitution, and copies are available on the company website, the share registry online voting site or the ASX market announcement platform. I will take the notice of meeting and explanatory statements as read. The format of today's meeting will be a brief Chair address by myself, a presentation from our CEO, Sash, followed by consideration of the formal business of today's AGM. Now following the presentation by Sash, we will provide an overview of the Q&A and voting procedure for today's meeting. We will then have an opportunity to ask questions in the company's business operations. Following this Q&A session on the business operation, we will move into the formal business for today's meeting. On conclusion of the formal business, there will be a further Q&A session giving all shareholders the opportunity to ask questions in relation to the resolutions presented at today's meetings. As previously noted, this is a virtual meeting, and shareholders will be able to ask questions and cast direct votes at the appropriate time whilst the meeting is in progress. Questions that have been received during the meeting, which are of similar nature will be grouped and answered at the appropriate time. If you have any questions which you feel were not addressed at today's meeting, we invite shareholders to contact the company via phone or email. So again, welcome to the 2023 LARK Distilling Annual General Meeting. I want to welcome Sash and Iain to their first AGM of LARK. And I'm delighted that we've managed to attract luxury and whiskey and spirits professionals like Sash and Iain to LARK to complement our existing extremely talented executives and, in fact, the whole dedicated LARK team. I'm excited that the newest members of the executive team have chosen to further their careers and enhance their reputation at LARK that demonstrates the confidence they and we all have in the long-term success, growth and value creation opportunities for our company. However, the competitive and economic environment is tough as LARK competes with many discretionary items for our consumers' time, attention and money. LARK's overall net sales revenue was down in fiscal '23 as stated in our annual reports. Whilst we experienced a deduction in direct e-commerce sales, like many other in the luxury section, the more significant impact on our headline performance was cycling several one-off and opportunistic transactions from the prior year rather than the global economic challenge and reduced consumer confidence. However, the positive impact is that our underlying sales, excluding the impact of those one-off sales in fiscal '22 generated some 15% growth supported by export purchases and increased hospitality footprint. Luxury brands like LARK, while not immune to global macro factors, are in many ways, more resilient than more commercially priced brands, as consumers continue to find the occasion to buy premium and luxury goods to enjoy now to share with family and friends or for gift giving. It is this resilience and strong consumer demand in the luxury sector that gives us great confidence as we work to onboard export distributor partners as we take LARK to the world. This resilience in our luxury spirits sector continues to drive the category-leading international brand owners to invest in major infrastructure projects to support growing consumer demand for luxury whiskey. And at LARK, we are no different. We continue to invest in our people, in building the one brand franchises and in building our inventory as we craft, mature and build out our whiskey bank. As stated in our ambition, we are currently focusing our whiskey-making endeavors at our Cambridge distillery in Hobart. The distillers and production teams are concentrating their efforts, resources and energy and crafting wonderful LARK new make spirit, and in selecting only the finest barrels and maturing this liquid to create an award-winning LARK single malt. As we considered our long-term brand proposition, we are setting aside whiskey specifically to support our future aging program, whilst we endeavor and ensure we craft LARK classic and have signature range of LARK whiskey to sustainably fuel our export expansion program. Our Cambridge distillery has the capacity to satisfy our immediate and medium term whiskey requirements. And this focused and balanced approach to managing our whiskey brand -- bank is of course conducted with our financial business and capital management mantra. The Board, Sash, your executive team, and the whole LARK family are focused on our immediate priorities to building the appropriate foundations for long-term success and to generate shareholder value. We will do this by building brand equity, by maintaining our domestic leadership position, by building the export journey within market distributors and continuing to create highest quality whiskey. Now we are well aware of the challenges in our sector and the general economic sentiment, meaning we will continue to invest cautiously with a variable cost mindset and exercising cash, capital and business discipline. However, considering our limited exposure to the international markets to date, we continue to see significant growth opportunity as we take LARK to the global stage. At a Board level, we will ensure that the nonexecutive directors have the appropriate skills, experience and mindset to support Sash and the team on the execution of our ambition. And we will look to refresh the Board as required. These actions are all targeted at growing a revenue base, improving the profitability and profile of our company and in generating shareholder returns. We recognize the share price is not reflecting our current value, and we are working hard to ensure we implement all of these actions required to grow our revenue base and improve our profitability. Now please let me invite our CEO, Sash Sharma, to provide an update on the company's own operations and some highlights from the recent Investor Day. Over to you, Sash.

Thank you, David. Good morning, everyone, and thanks for joining us today. In my presentation, I'll quickly cover our FY '23 results highlights. I'll also share some of the important slides from our recent Investor Day and close with our FY '24 perspectives. Looking at FY '23, Melanie, if you wouldn't mind going to the next 2 slides. Looking at FY '23, Elena, if you wouldn't mind going to the next 2 slides. Looking at FY '23, our highlights were net sales revenue of $17 million, down $3.3 million on the previous year. Normalizing for nonorganic and opportunistic sales in the prior year, pleasingly, organic net sales was actually up 15%. Importantly, LARK's core Signature and Symphony product ranges continued to perform strongly, growing net sales revenue by approximately [ 50% ], largely driven by export selling. Our gross margin remained strong at 68.9%, up 240 basis points, benefiting from positive channel mix towards owned channels of B2C and hospitality. Operating EBITDA was a loss of $2 million, largely reflecting less opportunistic sales at the top line and the impact of an annualized cost base from FY '22. Our balance sheet remained well capitalized with $7.2 million of cash at 30 June, a $15 million undrawn committed bank facility in place extended to January '25 and fully available to be drawn. Our high-quality whiskey bank sat at 2.4 million liters, underwriting future sales growth and allowing us short-term flexibility in our immediate reduction planning. Important progress was made in Asia with MOUs signed and a regional director on-boarded. Moving to the next slide. LARK's whiskey under maturation increased by 16.4% -- 16% to 2.4 million liters at June 30. The slides show that the increase over time in our whiskey under maturation with the jump in Q3 of FY '22, driven by the Shene acquisition. Importantly, the size and quality of the whiskey bank supports long-term growth plans, underwriting future sales. The existing whiskey bank allows us to optimize production in the short to medium term with distilling operations consolidated at Cambridge from May '23. Cambridge continues to have additional capacity to utilize. And when circumstances and timing are right, future Pontville capacity will allow expansion driving increased efficiency in the long term. Moving to the next slide. If we go to the next one there, thank you. At our recent Investor Day, we outlined our bold ambition to make LARK a leader in new world whiskey, underpinned by strong building blocks, including 30 years of history is Tasmania's first and oldest single malt, an unparalleled story, unquestionable provenance and the right environmental conditions to create the finest whiskey. We also have the sole rights to the Central Highlands Tasmanian peat bog, which helps contribute to our amazing wonderful house style. We also have access to some of the best class in Australia, and indeed in the world, especially with our long-standing partnership with Seppeltsfield. We also have a great team of executives and an ability to scale now and into the future, underpinned by our Whiskey Bank and [ stable of assets ]. These things allow LARK to have the prestigious position of being Australia's #1 luxury single malt. As we move to the next slide, as outlined at our Investor Day, our strategic priorities are clear. We will build long-term brand value by establishing LARK as a globally recognized and differentiated luxury whiskey brand. We will create international sales momentum and cement our domestic leadership position by creating repeatable, diversified revenue streams across markets and channels. And we'll execute cash and capital discipline by prioritizing cash generation to underpin growth and ensuring we're measured in our capital deployment decisions. Importantly, these strategic priorities will create long-term and sustainable shareholder value. So move to the next slide. LARK's reputation continues to grow across our entire portfolio, taking out highly acclaimed awards, both at home and on the international stage. This amazing recognition stretches quality, innovation, brand experiences and people. Our award strategy is one that is both the most prestigious internal award programs, allowing us to reinforce our quality credentials with both the trade and the consumers. The PR and media that these wins attract further builds on the brand awareness and the credibility of our unique brand. As we move to the next slide, the awards and accolades come from being true to who we are and why we believe we have a right to be competing on the global stage. We are made of Tasmania, where we have an ideal Goldilocks climate, not too hot, not too cold, a wonderful environment for whiskey maturation with our liquid cradled in some of the best casks in the world. We have some of the purest water and air in the world, coupled with the Central Highlands peat bog, a key factor in making brilliant whiskey. And we have the fabric of community, which binds us together and creates an exceptional spirit, both in our people and in our whiskey. When it comes to LARK's brand positioning, we celebrate the craft of whiskey making from grain to glass. And with every drink harnessing our wild Tasmanian environment as we persevere with determination. As we go to the next slide, we're working through what we must dial up to reinforce our brand and make LARK memorable in order to trigger recall. Equally, we've challenged ourselves to ensure we've kept a global lens when thinking about our brand outside of Australia. We will be more explicit about what we are and who we are. Tasmanian single malt whiskey, which lets us educate but doesn't make that job too daunting. In building a brand standout recognition, simplicity and consistency are king. Today, our distinctive brand attributes are our bottle shape, our motif and the fact that we're proudly made of Tasmania. We'll optimize our suite of distinctive brand assets as we evolved our brand to ensure they continue to provide relevance and cut through globally. As we go to the next slide, we've outlined at our Investor Day, we'll create absolute clarity about our brand proposition. And there is no question the jewel in the crown is and will continue to be LARK single malt whiskey. Supporting this master brand will be whiskeys from the house of LARK and Forty Spotted Gin. Next, as we grow in international markets, we will do so with distributors. Sorry, hold on. Next slide. We will seed, nurture and grow our brands over time. And the key steps are not new. In fact, they represent a well-trodden path, one I've lived and breathed. When seeding our brands, we will identify the right distributor partners as we have done in Malaysia, Indonesia and the Philippines. And we'll continue to do across various markets. Then our aim will be to drive awareness, advocacy, education and trial. As we move to nurturing our brands, we'll increase our width of distribution, increase our activation footprint and make our products adaptable to more occasions. Then as we grow, we'll continue to supercharge recruitment of new consumers into our brand and capitalize on that equity we would have grown at this stage. Moving to the next slide. As you've heard me say plenty of times before, global travel retail acts as an amazing shop window, providing an opportunity to engage with the target consumer as they dwell, explore and discover. This creates the ability to establish our brands, build awareness and consideration, and ultimately, deliver conversion and loyalty. We will and continue to view GTR as a vital channel, and we firmly believe in our ability to cut through as Australia's #1 luxury single malt whiskey. As you move to the next slide, while it may sound obvious, Australia will remain an essential and critical market for LARK. Our success at home is important in building confidence with our distributor partners as we grow overseas. It's vital we continue to protect our leadership and show up in the best way possible, ensuring our home market continues to enjoy the best products we create. Despite economic headwinds that we are facing, there are plenty of opportunities for growth both commercially and from an equity perspective. Through our flagship venues where we engage and receive invaluable feedback from our guests, building cut through by being in the right places and activating brilliantly, through our owned e-commerce offering, where we provide excitement, new news and an excellent opportunity to create loyalty. We continue to drive advocacy of LARK in some of the best bars in the world right here in our own backyard. Luxury experiences build engagement and excitement at multiple touch points and help us ensure we continue to be Australia's #1 luxury single malt. Finally, we'll continue working with key partners such as the Whiskey Club in a more structured manner to build ongoing, sustainable and repeatable revenue streams. On the next slide, we outlined our three distinct phases in our growth plan. In the first phase, we will -- which represents the next 3 to 4 years, we'll establish our beachheads. Sorry, I have to get back slide. This will involve building brand equity foundations internationally, entering identified markets, all while practicing cash and capital discipline. In the second phase, it's all about building on and embedding these foundations, expanding consumer recruitment into our brand portfolio. In addition, we'll enter new markets and regions building and capitalizing on what we we've learned and what has worked. As we move to stage 3 or phase 3, we'll accelerate. At this point, the brand foundations would have been set, international markets entered and sales momentum created. This is where we'll see brand value explode, and a clear focus will be to build mass reach. Together, this growth plan will see LARK achieved its own ambition of being a leader in New World whiskey. As we go to the next slide and go into the detail of phase 1, we have created milestones effectively becoming our operating scorecard that will track, report and share with the market on a half yearly basis. In building long-term brand value, the immediate and critical step will be to restage the single LARK single malt brand and architecture along with the House of LARK whiskeys and Forty Spotted Gin by FY '25. In the next priority of international sales momentum and protecting our domestic leadership position, we'll be entering new markets progressively, completing our entry into the top 10 markets by FY '26. This will, in turn, lead to generation of 50% of our net sales through shipment from exports and GTR customers by FY '27. In addition, we'll continue to sustain our domestic position and revenues on an ongoing basis. Finally, under cash and capital discipline, our current working capital facility runs until January '25. And this financial year, we will ensure we've secured funding meetings post this date. In addition to this, we'll ensure we target a minimum term to maturity of 18 months for our debt facilities. Importantly, we'll complete an assessment of our stable of production assets by this financial year and target positive operating cash flow by the FY '26, '27 period. Before I hand it back to David, let me share with you our perspectives for FY '24 on the next slide. Our focus will be on international expansion for LARK to diversify their business and provide a platform for growth. We'll focus on our core range and have a clear focus for limited releases. The challenging trade -- trading environment and general consumer confidence that we have previously flagged persist with trading dynamics for the month of October broadly as we've reported in the first quarter of FY '24. As previously reported, for the first half of FY '24, we are cycling approximately $2 million of selling from limited releases from the prior corresponding period. We are targeting growth from international market seating from the second half of FY '24, and there will be increased investment in A&P to support the launch of our Asia export business. Finally, we will be prioritizing cash generation to underpin growth, keeping a tight rein on production and other costs of doing business while being disciplined with our capital deployment decisions. David, let me hand back to you, and thank you, everyone, for your time.

Thank you, Sash. Some exciting times ahead. Now Melanie, our company secretary, will outline the question and poll procedure for today's meeting. Over to you, Melanie.

Thank you, David. As mentioned earlier, shareholders will be able to comment, ask questions and cast votes at the appropriate time for each item of business. Visitors and media are reminded that whilst we welcome you at this meeting, it is a shareholders' meeting, and you may not comment or ask questions. We may experience some time lag, and this may cause some delay in your text questions or comments coming to our attention. And we encourage you to lodge them as early as you can. Shareholders wishing to ask questions via text please select the Q&A icon located at the bottom of your screen. Type your questions in the Ask-a-Question box and press the same [indiscernible] and your questions will be addressed at the appropriate time. Shareholders wishing to speak and ask the question, an audio questions facility is available during this meeting. Please select the raise hand icon located at the bottom of your screen. You will be placed on queue and authorized to speak when we reach the Q&A session. Prior to asking your question, please state your full name and who you are representing. Regarding voting on today's resolutions, all shareholders, proxy holders and authorized corporate representatives and attorneys of shareholders who are entitled to vote will be able to do so via webinar poll. It is important to note that if you have lodged a proxy form and voted prior to the meeting, you do not need to vote again at this meeting, unless you wish to change your proxy instruction. To those proxy holders, shareholders and authorized corporate representatives who have not yet voted prior to the meeting, please cast your votes on each of the resolutions when the poll is opened. For proxy holders, you will have a summary of proxy votes, which detail the voting instructions, if any, for each item of business. By completing the voting via the webinar poll, when instructed to vote in a particular manner, you would deem to have voted in accordance with those instructions. Where the Chair has been appointed proxy on behalf of the shareholder, David Dearie as Chair of the meeting intends to be voting these in favor of all of the resolutions. With regards to the poll procedure, we will open voting shortly so that your votes can be cast during the formal business section of the meeting. When the poll is declared open, a poll window will appear. To vote, simply select the direction in which you'd like to cast your vote and the selected option will be marked. To submit your vote, simply click on the submit button, and you'll have the ability to change your vote up until the time that voting is closed. The voting on all resolutions is allowed up until the time of the poll is closed. Thank you, Dave. David, you're on mute.

Thank you, Melanie. Yes. We will now address shareholder questions which are submitted prior to today's meeting and any received in relation to the business operations.

Thank you, David. There's nothing that we received prior to the meeting on operations, and there's nothing that has come through the Q&A box nor anyone with their hands up at this stage. So there's no Q&A on the operations.

Okay. Well, if there are no questions, I will move to the formal...

Can I just pause? We do have someone with their hands up, so they will come in on to the audio facility. Mr. [ Uday ] you're now in the meeting.

You can probably hear me now.

Yes.

What is the rate of 5-year matured LARK whiskey available, if we're selling it today? And against that, what is the rate of 5-year mature LARK whiskey being sold at the moment? So we've got two rates, maturation 5 years and we're selling a 5-year.

We have -- sorry. Over to you, Iain.

Yes. We haven't, I suppose, announced to the market the various sort of maturations because we are a non-aged whiskey so we use various amounts of mature whiskey in creating the best products we possibly can. In terms of what we put out into the markets, we have got Classic Cask which has various inventory profiles. So that includes older than 5 years. But in general, we've used, obviously, the Australian standard is a minimum of 2. We generally don't put out whiskeys of that age, but we have got a blend of ages as we go to market. So we have not gone out with an age statement, as you may know.

Thank you. There's no other questions coming through. I did have a question through the chat box where the Q&A has been turned off. So no Q&A is available. It's a Q&A item down the bottom of your screen or raise your hands to talk in the meeting. Okay, there's no further questions coming through. There is another Q&A session after our formal business, so we might proceed with formal business.

Let's move to the formal business of today's meeting. Firstly, if you have questions on any of the items of business, please follow the question procedure, which was previously outlined by our Company Secretary. We will address the questions after the last resolution. Before opening the poll, I wish to remind shareholders that the poll will remain open for an additional period after we have considered all resolutions. I now declare the poll open. I refer to the first item of business as set out in the Notice of Meeting, which is to receive and consider the financial report of the company together with the directors' report and the auditors' report for the fiscal year ended 30th of June 2023. These items are contained in the annual report, so ask that they be taken as read. The annual report is available on the ASX announcement platform or via the company's website. The Corporation Act requires the accounts and report to be put before shareholders at the Annual General Meeting. However, except as set out in Resolution 1 to be considered later, there are no requirements for a vote of members to be taken on them. No written questions from auditors were received by the cutoff date, 5 business days before this meeting. Questions may be directed through myself to the auditor in relation to the conduct of the audit, the audit report, the company's accounting policies or the independence of the auditor. As this matter does not require a vote, we will now move to the first resolution. I now refer to Resolution 1, which is to be considered and the adoption of the remuneration report from [ LARK ] directors' report for the fiscal year ended 30th of June 2020. The remuneration report is set out in the directors' report in the company's 2023 annual report. The remuneration report sets out the company's remuneration arrangements for the directors and key management personnel of the company. To vote on this resolution is advisory only and is not binds the directors or the company. The following percentage of proxies have been received for Resolution 1 and are outlined in the presentation. In favor, 86.25%; against, 5.46%; open, 8.29%. I move that shareholders consider, and if thought through, pass the ordinary resolution. I now refer to Resolution 2 which relates to the reelection of Ms. Laura McBain as a Director of the company. Laura's profile has been provided on Page 8 of the notice of the meeting. And I now invite Laura to comment on her reelection.

Thank you, David, and thank you, everyone. It is great enthusiasm and gratitude that I stand before you today, reflecting the privilege and pleasure I have experienced while serving on the Board of LARK since June 2020. My professional journey shaped by background in financial and accounting management coupled with expertise in brand and consumer experience, it has been cultivated through leadership roles in distinguished companies like Bellamy's and Maggie Beer. This was the first career path has equipped me with a profound understanding of the strategic opportunities and challenges faced by organizations and a thorough grasp of the governance framework crucial for fostering growth. In February 22, I assumed the role of Interim Managing Director, stepping in at short notice during the Board's navigation of the unexpected departure of our former Managing Director. This responsibility continued until the arrival of our talented and disciplined CEO, Sash Sharma, in May of this year. Throughout my interim tenure, the primary focus was on fortifying the business's foundations, particularly in areas such as brand awareness, inventory management, organizational culture and margin management across channels. These initiatives undertaken in the midst of a rapidly changing post-COVID landscape and shifting consumer behaviors have continued under Sash's expertise, laying solid foundations for the exciting future that lies ahead for LARK. From a corporate perspective, I currently hold nonexecutive director roles at Capital Health Limited, Tasmanian Irrigation and the recently established Tasmanian AFL Club. I also chair the People, Safety and Culture Committee, and I'm a member of the Audit and Risk Committee at Tasmanian Irrigation, and a member of the Audit and Risk Committee, and the People Culture Sustainability Committee at Capital Health. These roles provides me a unique insight and valuable insights into the multifaceted challenges that Boards must navigate in today's dynamic and fast-changing business environment. My strong experience in governance matters ensures that LARK remains a resilient and sustainable organization. Looking ahead, my unwavering commitment to LARK remains steadfast. However, recognizing the importance of sound succession planning for our Board, we are committed to appointing a new director with the appropriate skills and diversity to replace me in the near future. In the meantime, I am dedicated to utilizing my experience, insights and knowledge to contribute meaningfully into shaping the future of our organization. I'm deeply grateful for the trust and support bestowed upon me by the Board and our stakeholders thus far. And today, I humbly seek your continued support for my reelection as a Director of LARK. Thank you, David.

Thank you, Laura. The following percentage of proxies have been received for Resolution 2 and are outlined in the presentation. In favor, 85.86%; against, 6.44%; and open, 7.7%. I move that shareholders to consider, and if thought fit, pass the ordinary resolution. I now refer to Resolution 3 which relates to the approval of the company's nonexecutive director share rights plan. The company is seeking shareholder approval to adopt the plan that allows directors to convert their directors fees to shares for a period of 3 years without further shareholder approval. The base for this resolution is to convert -- conserve the cash resources of the company and allow directors to reinvest their fees into the company. The following percentage of proxies have been received to Resolution 3 and are outlined in the presentation. In favor, 90.52%; against, 1.21%; open, 8.27%. I move that shareholders to consider, and if thought fit, pass the ordinary resolution. I now refer to Resolution 4, which relates to the approval of the nonexecutive director remuneration pool increase. The company is seeking shareholder approval to increase the maximum aggregate fees paid to nonexecutive directors of the Board by $100,000 from $300,000 to $400,000 per annum. This will allow the company flexibility to appoint additional directors should the need arise. The following percentage of proxies have been received for Resolution 4 and are outlined in the presentation. In favor, 88.34%; against, 3.38%; open, 8.28%. I move that shareholders to consider, and if thought fit, pass the ordinary resolution. At now to Resolution 5, which relates to the approval of the appointment of the company's external auditor, RSM. The company is seeking shareholder approval for the appointment of RSM Australian partners who were appointed during the year as a casual vacancy as auditor in accordance with Section 327 of the Corporations Act. The following percentage of proxies have been received for Resolution 5, and are outlined in the presentation. In favor, 92.03%; against, 0.28%; open, 7.69%. I move that shareholders to consider, and if thought fit, pass the ordinary resolution. I now refer to Resolution 6, which relates to the approval to issue equity securities under the company's equity incentive plan. The company is seeking shareholder approval to issue up t0 7,544,004 securities under the equity incentive plan over a period of 3 years from the date of the meeting. This plan is [indiscernible] every 3 years to allow long-term incentives to be issued to LARK staff without impacting on the company's placement capacity. The following percentage of proxies have been received for Resolution 6 and are outlined in the presentation. In favor, 86.47%; against, 5.25%; open, 8.28%. And I move that shareholders to consider, and if thought fit, pass the ordinary resolution. I now refer to Resolution 7, a special resolution, which pertains to the reinsertion of the proportional takeover provision as set out under clause 11 of the company's constitution. As this resolution is a special resolution that acquired 75% of votes cast to be in favor in order to be deemed as passed. A proportional takeover provisions are included in the company's constitution and the clause needs refreshment every 3 years to effective. The following percentage of proxies have been received for Resolution 7 and are outlined in the presentation. In favor, 49.63%; against, 42.66%, open, 7.71%. I move that shareholders to consider, and if thought fit, pass the resolution. I now refer to the final item of business, Resolution 8, a special resolution, which pertains to the approval of the company's 10% placement facility. As this resolution is a special resolution, it requires 75% of votes cast to be in favor in order to be deemed as passed. The following percentage of proxies have been received for Resolution 8 and are outlined in the presentation. In favor, 43.16%; against, 49.13%; open, 7.71%. I move that shareholders consider, and if thought fit, pass the special resolution. We will not go to shareholders' questions. Does any shareholder have questions on any of the items of business?

David, we haven't received any questions through the Q&A box nor through the audio questions facility on the formal business.

Okay. Thanks, Melanie. So ladies and gentlemen, that concludes therefore the Q&A session for the formal part of the meeting. We will now provide shareholders with an additional 30 seconds of poll voting to be completed. [Voting]

Thank you, David. That's time.

Okay. As additional time is up, I now declare the poll closed. The company has not received notice of any other business, and therefore, that concludes the formal business of today's meeting. This brings today's Annual General Meeting to an end, and I now declare the meeting closed. After the votes have been counted, the results of the poll will be released to the ASX later today. And I wish to thank everyone for attending and look forward to your continued support for LARK Distilling. Thank you.

Thank you, David. Thank you all. We will now close it now.