Little Green Pharma Ltd (LGP) Earnings Call Transcript & Summary

Welcome everyone to the Annual General Meeting of shareholders for Little Green Pharma Limited. Shortly, I'll be handing things over to Little Green Pharma Chair, Michael Lynch-Bell, who will formally introduce each of the directors and run through the format of the meeting. Before I do, I'd like to remind shareholders that should you have any questions, they can be submitted in writing by using the Q&A function on the screen. And I'll ask them directly off the chair or I'll ask them off the CEO after he's completed his presentation later in the meeting. The chair may choose to direct them to another Board member to be answered where appropriate. I'd now like to introduce Little Green Pharma Chair, Michael Lynch-Bell, who will be chairing today's meeting and will run through all elements of that meeting. Michael, over to you.

Good afternoon, everybody, and welcome to our Annual General Meeting for 2024. As David said, I'm Michael Lynch-Bell. I will be chairing today's meeting. As the time is after 3:30 p.m. and a quorum of shareholders is present, I formally declare the meeting open. I'd like to introduce my fellow directors and the management team in attendance today. So Mr. Peter Solomon, Executive Director; Dr. Neale Fong, a Non-Executive Director; Ms. Beatriz Vicen Banzo, Non-Executive Director; and our CEO, Paul Long. Just noting that Angus Caithness, Executive Director, [indiscernible] for today's meeting. I'd also like to introduce our Company Secretary, Alistair Warren, without whom this meeting wouldn't have taken place. In addition, a representative from our external auditor, BDO, Ashleigh Woodley, is present if there are any questions or matters to be directed to the auditors. And lastly, our external legal counsel, Hamilton Locke, represented by Jeremy Newman is also present. All shareholders were notified by letter dated the 24th of July 2024 of where to access the notice of this Annual General Meeting. Accordingly, the notice is taken as read. The order of proceedings for today's meetings will be consideration of the agenda items as set out in the notice, and we'll take questions from shareholders through the Q&A section on the Zoom application on each of the items of business as we deal with those matters. Once all resolutions have been read, this will be followed by a vote on the resolutions to be conducted by a way of a poll by our Company Secretary. The results of the poll will then be announced to the ASX after the close of this meeting. Following closure of the formal business and poll, our CEO, Paul Long, will provide a presentation and update on the company. And lastly, we'll hold the discussion on any questions from shareholders received in advance of the meeting as well as any further general questions that any shareholder may have submitted via the Q&A section on Zoom. I wish to state that it's my intention to vote the proxies vested in me in favor of each of the resolutions to be put before today's meeting. Details of the proxy appointments received by the number of votes, including whether the proxies directed to vote in a particular way abstain or is open to be voted at my discretion, will be shown on the screen for your information. It's not my intention to revoting exclusion statements or voting prohibitions, which may apply to resolutions. Voting exclusion statements and voting prohibitions are set out in full in the notice. I'll now turn to the business set out in the notice. Firstly, financial statements and reports. So the first item of business is to receive and consider the financial report for the company and the related reports of the directors and auditors for the financial year ended 31st of March 2024. No written questions to the auditor under section 250PA of the Corporations Act were received by the cutoff date, 5 business days before this meeting. Questions may be directed through myself to our auditor in relation to the conduct of the audit, the audit report, the company's accounting policies or the independence of the auditor. Taking into consideration the comments already made in my address, does anyone have any questions or comments on the financial statements or reports? And for any shareholders attending via the Zoom application, this is now the opportunity to ask any questions, and I'll pause briefly.

No questions have been received, Michael.

Okay. Thank you, David. So as there are no questions, and as this matter does not require a vote, we'll move on to the first formal resolution. Resolution 1 is in regard of our remuneration report. Resolution 1 seeks approval for the adoption of the remuneration report for the financial year ended the 31st of March 2024. A copy of the resolution is set out in the Notice of Meeting, and the proxies received in respect of this resolution are shown on the screen. Does any shareholder have any questions or comments? This is now an opportunity to ask any questions, and I will pause briefly.

No questions have been received, Michael.

Okay. Thank you. As there are no questions, I now exert my power as Chairman to demand a poll on this resolution. Moving on to Resolution 2, Reelection of Director, Fleta Solomon. The resolution seeks approval for the reelection of Ms. Fleta Solomon as a Director of the company. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution is set out in the Notice of Meeting, and the proxies received in respect of this resolution are shown on the screen. To reiterate, I note that all votes directed towards me as Chairman will be voted in favor of this resolution and all other resolutions. Does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on this resolution. As the next resolution concerns myself, I'm now going to hand the Chair over to Neale.

Thank you, Michael. This resolution seeks approval for the reelection of Mr. Michael Lynch-Bell as a Director of the company. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution as set out in the Notice of Meeting, and the proxies received in respect of this resolution are shown on the screen. The proxy received votes are -- does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I'll pause briefly.

No questions received, Neale.

Since there are no further questions or comments, I now exercise my power as Chairman to demand a poll on this resolution, and I will now hand the Chair back to Michael.

Thanks, Neale. So Resolution 4 is in respect to approval of a 10% placement facility. This resolution relates to the approval for the company to have additional capacity to issue equity securities provided for in Listing Rule 7.1A on the Terms and Conditions in the Notice of Meeting. This is a special resolution requiring 75% or more votes to be in favor to be passed. A copy of the resolution as set out in the Notice of Meeting and the proxies received in respect of this resolution are shown on the screen. Does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Okay. Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on this resolution. Resolution 5 concerns the appointment of our auditor. This resolution relates to the approval to appoint BDO Audit Pty Ltd, as the company's auditor as a result of BDO Western Australia restructuring its audit practice. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution as set out in the Notice of Meeting and the proxies received in respect of this resolution are shown on the screen. Does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on this resolution. As the next resolution concerns myself, I'll now hand the Chair of the meeting over to Fleta.

Thank you, Michael. Resolutions 6a, b and c, approval of issue of non-executive retention rights. These resolutions seek approval for the issue of retention rights to non-executive directors of the company. Specifically, Resolution 6a for the issue of up to 300,000 non-executive retention rights to Michael Lynch-Bell, Resolution 6b for the issue of up to 150,000 non-executive retention rights to Dr. Neale Fong; and Resolution 6c for the issue of up to 150,000 non-executive retention rights to Beatriz Vicen Banzo or the nominees. Ordinary resolutions requiring 50% or more votes to be in favor to be passed. A copy of these resolutions as set out in the Notice of Meeting and the proxies received in respect of this resolution are shown on the screen. Concerning Resolution 6a, does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Fleta.

Thank you. Concerning Resolution 6b, does any shareholder have any questions or comments? Now is the opportunity. I will pause briefly.

No questions received, Fleta.

Thanks, David. Concerning Resolution 6c, does any shareholder have any questions or comments? Now is the opportunity to ask, and I'll pause briefly.

No questions received.

Okay. Thank you. Since there are no further questions or comments, I now exercise my power as Chair to demand a poll on Resolution 6a, Resolution 6b and Resolution 6c. I will now hand the Chair back to Michael.

Thanks, Fleta. Resolution 7 is in respect to the approval of potential termination benefits under the plan. Resolution 7 seeks approval for the giving of benefits to any current or future person holding a managerial or executive officer of the company or a related body corporate in connection with that person ceasing to hold such office on the Terms and Conditions in the Notice of Meeting. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution as set out in the Notice of Meeting and the proxies received in respect of this resolution are shown on the screen. Concerning Resolution 7, does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Thank you, David. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on Resolution 7. Resolution 8 is in respect of the ratification of issue of consultant shares. This resolution seeks approval to ratify the prior issue of 72,500 consultant shares issued under Listing Rule 7.1 on the Terms and Conditions in the Notice of Meeting. This is an ordinary resolution requiring 50% or more votes to be in favor to be passed. A copy of the resolution as set out in the Notice of Meeting and the proxies received in respect of this resolution are shown on the screen. Concerning Resolution 8, does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions received, Michael.

Thank you. Since there are no questions or comments, I now exercise my power as Chairman to demand a poll on Resolution 8. Resolutions 9a and 9b are in respect of the approval of the issue of a long-term incentive plan options. Resolutions 9a and 9b are set out in an addendum to notice -- to the notice of Annual General Meeting, which was announced to the ASX on the 8th of August 2024. These resolutions seek approval for the issue of LTIP options under the plan as follows: Resolution 9a for the issue of up to 2 million LTIP options to Angus Caithness or his nominees and Resolution 9b for the issue of 1.2 million LTIP options to Fleta Solomon or her nominees. Each are ordinary resolutions requiring 50% or more votes to be in favor to be passed. A copy of the resolutions as set out in the addendum to the Notice of Annual General Meeting and the proxies received in respect of this resolution are shown on the screen. Concerning Resolution 9a, does any shareholder have any questions or comments? This is now the opportunity to ask any questions, and I will pause briefly.

No questions have been received, Michael.

Concerning Resolution 9b, does any shareholder have any questions or comments? Again, this is now an opportunity to ask any questions, and I'll pause briefly again.

No questions have been received, Michael.

Thank you, David. Since there are no questions or comments, I now exercise my power as Chairman to demand the poll on this resolution. We will now conduct a poll on the resolutions being put to the meeting. If you are a shareholder, proxy, corporate representative or authorized attorney and wish to vote at this meeting or change your previously submitted proxy vote, then e-mail your previously requested poll form to the Company Secretary. We're now going to have a short break while any poll forms are returned. Thank you. [Break]

We will now resume the meeting. The Company Secretary will compile the voting results and announcement to the ASX following the end of this meeting. Ladies and gentlemen, that concludes the formal business of the meeting. And I formally close the meeting at -- going to work out the time, at 3:49 Western Standard Time, it's 8:49 in the U.K. and morning here. On behalf of the Board and Management, I'd like to thank you for your support, and I thank everyone for attending the formal part of today's meeting. I'd now like to ask Paul, our CEO, to provide a company update. Over to you, Paul.

Thank you, Michael. I will just share my screen. David, just confirming that my screen is showing.

Yes.

Excellent. Welcome, everybody, and thank you for joining today. I'd like to take the opportunity to run through a few of the slides. The slide deck that you see on the screen has been updated on the ASX platform from July. So there's no new material information today, but I wanted to take the opportunity to run through some key updates that we had made available through this slide deck. To begin with, it's important to just really summarize and capture a little bit more about Little Green Pharma as we've progressed certainly over the last year. But as you will hopefully know, we're a vertically integrated medical cannabis and psychedelics company. And we operate across the entire value chain. And so that has been a significant advantage to us to control that supply chain, particularly in the last few years. We have now trusted a very, very trusted brand, both in the Australian and the European market with over 26 products in the market and a pathway for supply into 11 countries both from Australia and into European countries as well. Our team -- we have an exceptional team and a very flat organizational structure inside the business. This really has enabled us to capture value and really compete with the bigger companies that we've seen moving into the European market out of the North American markets. So I'd like to take this opportunity to thank that executive team that we've managed to operate in a very lean and flat environment and perform incredibly well given the size of our team. I'd like to touch on our growth strategy on this slide. And to begin with, I'll really talk about the lens in which we look at our strategy. And it's important to sort of break down our marketing into 2 distinct categories. Firstly, we know that we operate in the world of medicinal cannabis, and we know that, that is a significant opportunity, and certainly, where the markets in which we operate, it's the focus. However, what we have seen in Australia, particularly over the last 12 to 24 months has been the illicit use market transition across to the medical market. So these are patients that have previously been self-prescribing products in illicit market and are transitioning across to the medical market. So we do believe that -- when we look at our growth strategy, it's important to understand where those patients are coming from. And for us, we're in multiple markets, so we do look at each market slightly differently. But we do believe that the typical phases of the market go from startup to growth to a shakeout and into a bit more mature market. And each of the markets we operate in are at different stages, so, therefore, it's -- that strategy within each country is slightly different. But overall, our growth strategy for the company hasn't changed in a number of years. The 3 key areas for our growth strategy, the number one is that we're focused on the high-mover -- the first-mover in high-barrier market. So for us, we have a distinct advantage in our capability to deliver into these markets. And the best market -- best examples of those markets would be Poland, France, Denmark and Italy, all of those countries, we either got access through a tender-driven process or a dossier-driven process. And our high level of quality within the company has enabled us to provide product into those countries. And I'll talk a little bit more specifically about -- to give you an update on a few of those countries later on in the presentation. Secondly, our focus is really to gain market share within the low-barrier and high-volume markets, and Australia is probably the best example, but also Germany and the U.K. And so we really see in a lot of those countries that we're getting a transition from the illicit medical market into -- the illicit market into the medical market, and we've seen some really big volume growths, particularly in the Australian market as one of the fastest moving markets in the world in the medical space. And for us, that's come with a slightly different layer of thinking. So thinking through more of a House of Brands strategy has been one that has served us incredibly well, and we've seen some decent growth in the Australian market, in particular. And thirdly, for us, particularly in a shakeout market where we've gone through this rapid growth and start-up and rapid growth into a shakeout market, we think there will be opportunity for some very smart acquisitions in this market. As the market begins to mature, we do believe that those established markets will begin to look more like any other mature market where there's fewer competitors in the market and a few well-established brands. But the evolution of the market, I've touched on in Australia in that previous slide, but some of the stats I'll touch on within this slide. So what we do now in Australia is that there's approximately 12% of the population that already consumes cannabis. So that's about 2.7 million people in this country. So what we do know is that roughly 1 million of those patients are now prescribed medical cannabis, and that has been a really big increase that we've seen in the last 1 to 2 years. And as I said before, that's taken a slightly layer -- different layer of thinking in how we look to target those patients, and I'll talk a bit more about that later on in this presentation. However, if we look at the chronic conditions that exist in just in our country here in Australia, we look at the anxiety disorder, really massively increasing since COVID, in particular, with younger people between 16 and 25 years, 32% of the population here in Australia. If we look at insomnia, if we look at people suffering with chronic pain, it is a significant opportunity. So whilst there is opportunity with the illicit market moving to the medical market, we still believe that the focus for us should be around the chronic conditions and targeting those patients who perhaps haven't accessed medical cannabis before as a treatment therapy, and we'll look to do so. So we continue to invest in R&D, in the QUEST initiative, has been one of those investments we've made. We -- there was a 3-month published results for the QUEST study, and we actually showed that there was clinically meaningful improvements in a lot of these chronic conditions. So we do believe we're really well positioned, and we do believe there will be continued growth into the Australian market, not just from the transition from illicit use, but also for the medical and chronic conditions. So Australia has been, as I mentioned, one of the fastest-growing markets, medical markets in the world. And that has come with a significant amount of competition. But for us, it's been really important that the focus in Australia has been looking at the market under those 2 different segments that I've been talking about. And we do believe that the rationalization is beginning to change through that shakeout period. So we're beginning to see a number of exits -- companies exit the market. So certainly, in the last 12 months, there has been a number, and we believe that we'll continue to see that in the next 12 months as well. More broadly, if we have a look at the international market, there is absolutely a transition of down scheduling, particularly through Europe. We're beginning to see that all at different stages of the market, of course, and I'll touch on a few of the key European countries that we focus on. We do believe that there will be an impact from the U.S. down scheduling that should provide a re-rating for the industry, both in the U.S. and European markets and have an impact on the Australian market as well. This next slide just shows you the footprint of the countries that we do have supply pathways into, sort of 11 countries, as I mentioned, in total. And I'd just like to take the opportunity to give you a short update on a few of the key markets, in particular the European markets. So the French market has been the key focus for us. We've been providing into the French pilot study run by the French government now for a number of years. That has transitioned into a pilot phase -- post pilot phase at the moment, whereby we are supplying product into that market. Originally, we were supplying product free of charge through to patients under that study under the trial. Through the post pilot phase, there is actually a really positive return that we're getting from deliveries into that market now. And we do expect in 2025 that market to open up, and Little Green Pharma incredibly well-positioned to service that market. But if you look at the size and the opportunity, 67 million people, in fact, probably one of the highest uses of illicit cannabis, which is often a precursor to the number of patients that you see in the market. And the other big and very interesting factor that I think we'll see in France is that -- will be reimbursement for patients. So whilst we predict in any new market, particularly those new medical markets, there will be a slow adoption for medical cannabis, we do believe that will be a significant market for Little Green Pharma. We're beginning to see the fruits of the investment in time and dollars we've spent into that market, and we believe 2025 will be a breakout year where that legislation changes. It's also important to note in France that there will be -- we believe there will be limited access for other companies that weren't a part of the trial and certainly a slower access for those companies looking to access that market. So we're very excited about the opportunity within the French market. The German market has seen some significant change and some lowering of the regulatory barriers, as I mentioned. They -- and obviously, we have our Danish site just 2 hours from the border into the German market. So the changes we saw earlier this year saw THC no longer registered or listed as a narcotic. And so that has just gained greater access for patients in Germany, and we have seen a significant increase. In fact, last quarter, the BfArM, which is the TGA equivalent in Germany, showed that there was a 44% increase in the volume of imports into Germany. So we have also seen a flow through of orders and interest from Danish operation. And so with the largest -- one of the largest sites within the European Union, we think we're incredibly well positioned to step into that growth into the German market. The U.K. has also been one in which we were one of the early movers and a real focus for us, and we're beginning to see some repeat orders into a few of the partners that we're working with into the U.K. It is still a market that needs to be accessed via specialists, but the volume is beginning to grow, and we think that there's some change happening in that part of the market as well. Holland is a country that is a slightly higher watermark in quality, so it's a dossier-driven market. We're one of only a few companies providing product into the Polish market, and we'll continue to look at bringing new products into the market. And both Italy and Switzerland are also focuses for the business. A brief update on the Danish site. So as you hopefully will know, we purchased this site from Canopy a number of years ago now after Canopy invested CAD 120 million on the site. We acquired the site for $20 million. It is a world-class, very, very impressive site, very well positioned to capitalize on big European growth. We've been investing heavily in the development of new genetics. And we're beginning to see some really good quality product now being delivered out of that site, both down into Australia and into some of those key markets in Europe. And -- the site itself had scaled. At the moment, we're probably operating at about the 4 to 5-tonne production of flower from that site. And as you can see on the slide, it has a scale to produce up to 30 tonnes of biomass, so some significant growth opportunity just within that site. The Busselton site here in Western Australia is continuing to perform really well. There will be -- there is a transition for that being an indoor site. There will be a transition into producing really high-quality Craft flower over time from that site. We're beginning that pathway at the moment. And we do see a segment in the market of patients looking for a higher premium Indoor Craft flower and that comes with a higher price and a better margin. So this site, we believe, will really serve that Craft part of the market well in the years to come. This slide just shows you since launching Australia's very first oil back in August of 2018, we've made a rapid transition in the last 6 years to now if you look to 2024, we have a whole range of products under a number of brands, and you'll continue to see that trend as we continue to grow. As I mentioned at the start, we certainly continue to invest in research and development. The QUEST study has been a significant contribution to the company, but it also is a pathway to connect with patients, but we also look to supply our products into clinical studies across the world. So 13 studies at the moment we're providing product into -- 4 of those are actually in France, which strategically positions us really strongly there for reasons I mentioned earlier. We're also investing into a study, which I'll talk about with Reset Mind Sciences as well on the next slide. So Reset Mind Sciences, we incorporated in May 2021, and we saw an opportunity back then given our capability with our scheduled non-licensing and our knowledge around GMP botanical products. And so we saw a significant opportunity to grab a competitive advantage, and we've made some fantastic progress within Reset. So on the manufacturing and cultivation front, we have a mushroom chamber in our Busselton facility, and we're continuing to reform that process and put a lot of those products into -- through an R&D cycle into a stability study. The primary focus for us at the moment really is on the psychedelic clinic. That clinic is fitted out and ready to go here in Western Australia and Shenton Park. And it's one of those very -- one of a very handful of clinics within the country at the moment. And the unique thing about the Reset Psychedelic Clinic is the partnership with HIF. So it's certainly the only company in Australia with a partnership with health insurance fund and perhaps to acknowledge one of the very few or only companies in the world to have this partnership. So that opportunity is significant because the treatment of these utilizing this pathway will be expensive for patients, and so access and affordability will be challenging for patients in this market. So our ability to provide access, obviously, through the special access pathway through authorized prescribers is well known from our cannabis knowledge and our partnership with HIF is really leading the way to provide affordable access for patients in this country. Just a quick snapshot on some of our financials from 2024, but we continue to see a revenue growth, so we had a 29% increase in our topline revenue. Over the last 3 years, that's been a compound annual growth rate of around about 35%. So we believe that's been really strong, particularly in a competitive market. Our operating cash flow was one of the highlights of our performance, certainly from 2023 to 2024. That does include our cash rebate from R&D. One of the big things we did manage to do was decrease our debt position as well, as you can see from $11.7 million down to $3.5 million. So particularly, when we compare that to our peers in the market, it's a really low debt position, and we've managed to do that by maintaining our net tangible asset position as well. So with over $70 million of net tangible assets, again, it positions us really strongly. This next slide is having a look at our cash flow. This has been an absolute core focus for the business now for a number of years where we have been focusing on net cash flow positivity. So you can see on the trends of the growth on this slide that we've continued to increase our receipts from customers. And most importantly, if you look at the blue line there, we've managed to really stabilize our operating costs. And that's been really critical for us to push towards a net cash position, which has meant that the focus for us has been we didn't want to give away growth and opportunity for the business, but we've had to obviously make sacrifices to ensure that we can continue to push towards net cash flow breakeven. This slide, I think, is just a snapshot of who we see our top 4 handful of companies on the ASX that we compare to. And whilst we absolutely take on board that share price is disappointing, it is important to look at the industry and the macro of the industry and our peers. And so this slide just shows over the last 6 months the performance of the handful of companies that we would compare ourselves to. There's probably a few more, but they fell off this slide because their performance was down by more than 100%. So it does show you that whilst share price has been in decline over this period, when we compare that to our key peers, our performance has been above the norm. I think just on that slide, it's important to note that we do believe that the macro of this market is not really justifying the detail of our business, so -- and our industry, we are seeing growth in the industry, and we do believe that there will be a re-rating at some stage, and we think we are incredibly well positioned to capitalize on that. From a corporate overview perspective, the highlight really on this slide is that there hasn't been a huge change. Our substantial shareholders in Thorney and Hancock continue to be substantial and across the business and supportive of our strategy. And it's important also to note that we have really strong alignment from our Board and key shareholders so that the motivation towards shareholder return and shareholder value is fully aligned with the people with hands on with the business in a day-to-day basis. So just the last slide, I'd like to just touch on really the value proposition, and I did speak about the disappointment under this with the shareholder performance, but we do believe that there are elements at play within the small-cap space, but also within medicinal cannabis space in this country at the moment. But we do believe that there will be opportunity for that to return. And we believe that Little Green Pharma are incredibly well positioned with a fantastic team. But the fundamentals, as I've mentioned here within this slide deck is that we did achieve operating cash flow positivity in 2024, and we expect to see that continue to grow. Our net tangible assets of $73 million are significantly higher, even than our market cap at the moment. Our really low debt position and our compound annual growth rate in revenue from a financial perspective give us a really strong position. The decisions we've made around the -- leading the market here in Australia, in particular, over the last 12 months as we look to segment the market, we think will enable us to continue to grow and take market share in Australia. And really the cherry on top and the blue sky for this company is the huge opportunity that we see in Europe. There's really a tenfold opportunity than what we see in the Australian market. And whilst a lot of our time and energy is and continues to be focused on the Australian market, given the scale of growth in Australia, we do believe as we look forward, there will be a significant opportunity for growth for shareholder value into the European market. Okay. That's it for me. I'll now hand back to David.

Thanks, Paul. We do have time, as I said at the beginning, for questions. If any shareholders do have questions, I'm happy to put them to Paul and Michael or other Directors of the company as appropriate. A couple of questions here. And you touched on it in your presentation, but we'll run through it anyway. So in terms of the share price, why do you think it is low?

Yes. Look, I think -- yes, I think to start off with, as I said in my presentation, we're clearly disappointed with where the share price is at. We are very motivated to get the share price moving. There is a sentiment and a level of sentiment at the moment in the market, which we believe is a factor at play with share price, particularly when we look at other peers in the market. But as I said, our focus is that we do believe that there will be a market turnaround, a change in sentiment. But the reality behind this market at the moment is that we do have 4% of Australians with a script. That's over 1 million people at the moment with a script. We continue to see that growth quarter-on-quarter in new patients signing up and joining this market. And yes, that's come with increased competition, but we believe that we're really well positioned. So when that market does turn, we think financially, we're in a great position. We've got real assets. We think that shakeout will be interesting for us where there's opportunity for acquisition. And we do believe that we are one of the frontrunners for that European market as that changes. So, yes, disappointing, but certainly something that we're absolutely focused on and something that we do believe that the sentiment in the market at some stage will turn.

And, Paul, there's a question here in regards to the cash flow positive state of the business being supported, and you've noted it in your presentation, being supported by R&D rebate. So when you include that in, that gets you to cash flow positive. When do you expect that cash flow positivity to occur without any rebates?

Yes. Look, we're obviously not able to provide anything forward-looking there, David. But certainly, if you look at the trends that you saw in the slide I just shared, we're certainly trending in a really positive direction towards cash flow positivity, so the slide within the deck, which is actually available is actually remove the R&D component. So we're really, really positive around where breakeven is heading. And for us, it's a simple equation. There's a cost side and a revenue side. As a business, it's been a number of years we've been really focusing on the cost side and the revenue side. But for us, there's been a whole range of things that we've done within the business. But things like -- we've frozen salary increases since April 2021. We've reduced our headcount in our Danish operations since acquisition by more than 50%. We've had really tight control over spending and perks within the business. We've just recently moved our head office to take a big saving here in Western Australia. We tender a lot of our major projects to actually ensure that we're getting the sharpest possible price, and a whole range of things. And on the revenue side, for us, as I mentioned, the real focus has been this House of Brands strategy and really thinking through from perhaps more of a fast-mover consuming goods lens on how we look at particularly the Australian market, different to some of the European markets, but the Australian market, and that's really resulted in, as I said before, 26 products and a range of different products under different brands in the market. And that pathway seems to be working really well for us.

A question here in regards to opportunities. Where do you see growth coming from? Is it all in Europe? Is it big in Australia? Or will it be a mixture of both?

I think it's definitely a mixture of both. I think the Australian market, as I mentioned before, we believe that there will be continued growth here, 4% of the population is significant, 1 million patients is significant. And in fact, if we sort of step back to when we're looking at this market an opportunity a few years ago, if we had a thought by August 2024 we'll be at 1 million patients, I think everyone within this market would have been really, really happy with that. So we do believe the market is growing rapidly. We think we do see that continuing to grow. But again, let's have a look at the medical side, and there's still an unmet need for patients and significant opportunity. So look, Australia is absolutely a focus. It's our home ground, that's a focus for us. But if we look at the European market, as I said before, there's really -- the total addressable market that we look at in the Europe, even if you look at our top 4 countries that we're focused on, there's 250 million people. So the total addressable market inside those countries is significant. We're probably in a position now as a company where we've got 50-50 of our team members based between Europe and Australia. So I do foresee within the next few years that our total revenue will be generated in the majority within the European market. But for now, we still see that here in Australia. So in part in answer to your question there, David, or to the shareholder that asked that, I think certainly there's going to be a combination. And we are looking through -- we do look through the lens of the market in a country-by-country basis. So that's really important in these markets because each country is in a slightly different part of their implementation, whether it be pure medical and a very heavily regulated market or a market that we tend to see more like here in Australia and Germany.

And in terms of the 2 assets, it was touched on a bit in your presentation, how do you see the mix of those assets working moving forward?

Yes. Look, I think -- I mean, the Australian asset here in Busselton is only but a total capacity of roughly 1.3 to 1.5-tonne of product -- of finished product or a little bit more with biomass. So that has a ceiling really on the capacity. And that's not a bad thing, but we've invested in an indoor facility that can produce really high-quality flower. So as we look at particularly the Australian market, there is a segment in the market -- there's a part of the market that are looking for a flower product, which is really high quality that it's got things like hand-trimming. It's got high terpene profile. It's got certain genetics coming out of indoor locations. And that -- those patients are willing to pay a premium. So that is really where the craft part of the market we see, and we think that certainly is perfectly set up to deliver high-quality Craft flower into this evolving market here in Australia. The Danish site is a bit different. It can produce up to 30-tonne. We do believe that, that will really service the volume market or the bell curve of the volume that we see both in the Australian and to the European market. So both those sites will have -- they won't be crossing over in terms of what they produce into the market, they'll be delivering into slightly different segments of the market.

A question here from a shareholder. Flower sales were down a little last quarter compared to the previous quarter. What is the reason for this?

Yes. So I think total flower sales -- some of those sales on a quarter-by-quarter can be quite lumpy, so we can see deliveries into our partners into Germany can be -- sometimes falls in a quarter and out of a quarter. What we did say that -- I mean, the total volume of flower sales was up, so one of the brands in which we launched was a brand called CherryCo, and that is a lower cost brand. And it's essentially our second. So when we harvest a crop, say that crop is 50 kilos, a percentage of that crop, let's say, 20 to 25 kilos will go into more of an A grade product, and that will come in under the Little Green Pharma brand at a higher margin and a higher price. But that the B grade flowers will go into a lower-cost brand, which is our CherryCo brand, which we're also supplementing through some other product into the market as well. At the moment, we can't produce enough of that. So there is a bit of a supply issue. And so there are some lumpy months where particularly at that low-cost product range, we -- it does take sort of 3 to 6 months by the time you obviously plan to product and deliver that into market. So we are seeing an onward trend of our flower sales, but supply is a bit of a challenge, but also it's a competitive market on the flower front out there.

And just a question in regards to policy. Obviously, very active, I assume, in policy. The question here is how aligned or how active are you in lobbying, first of all, within government, but also joining forces with other affiliated bodies to play a role in the development of policy or the advancement of policy here in Australia and overseas?

Certainly. We've been very active since day 1 here in Australia. So -- unfortunately, what we do see here in Australia is too many industry bodies, so we have actually been lobbying to try and bring that into sort of one voice that can represent the industry. The challenge is everyone has a slightly different vested interest in this space. So we've actively added our own direct pathway to all the political parties in both state and federal in lobbying for the pathway, and that's been really successful for us over the years, and we continue to do that. And at an industry body level, yes, we've certainly sat on and been a key player in one of those industry bodies, and we're seeing some movement to hopefully bring a few of those bodies together, which we're also supporting in the industry. So a very, very active role in Australia. We have historically, and we'll continue to do that. Slightly less so we're involved in industry bodies in Europe, but often they are country by country. So in the countries in which we have a core focus, for example, France, we're very, very active with a dialogue with the regulator, with the government and through industry bodies within that country.

We don't have any further questions on the screen. But if anyone would like to quickly type one in, I'll give a chance for that last question to come through. If not, that will bring to a close our Q&A session. No, it doesn't appear like there's any more questions coming through. So, as I said, that does bring to a close today's webinar for Little Green Pharma. I'd like to thank Paul, Michael, Neale, Fleta for their roles in today's investor webinar and AGM. And I would like to thank each of the shareholders for participating today, and everyone, have a great day. Thank you.

Thanks, everybody.

Thanks, everyone.

Goodbye.