Mad Paws Holdings Limited (MPA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to today's meeting of the shareholders of Mad Paws Holdings. The meeting has been convened pursuant to an order of the Supreme Court of New South Wales made on 17th of September 2025 in connection with the proposed scheme of arrangement between Mad Paws and its shareholders, under which, if approved, Rover Group will acquire 100% of the issued share capital of Mad Paws for a cash payment of $0.14 per Mad Paws share. My name is Jan Pacas, I'm the Chairperson of Mad Paws and will be chairing the scheme meeting. So first on housekeeping. Before formally opening the scheme meeting, there are a few housekeeping matters to address. For all virtual attendees of the scheme meeting, if you experience any technical issues during the course of the meeting, you should contact Mad Paws' share register, Automic, by telephone on 1300 816 159 within Australia or 02 8072 1479 if calling from overseas. For physical attendees, we ask that you turn off your mobile phones or put your phones on silent so as not to disturb the other meeting attendees. So what's the agenda of the meeting? It is now just after 10:30 a.m. Sydney time, and I confirm that a quorum is present. So I declare the scheme meeting properly constituted and open. The scheme meeting has been convened in accordance with Mad Paws constitution and orders made by the New South Wales Supreme Court. At this scheme meeting, Mad Paws' shareholders are being asked to vote on the proposed scheme arrangement between Mad Paws and its shareholders, under which, if approved, Rover Group will acquire 100% of the issued share capital of Mad Paws for a cash payment of $0.14 per Mad Paws share. On behalf of the Mad Paws Board and management, I extend a very warm welcome to all Mad Paws shareholders, their proxies, attorneys or representatives joining us this morning and who are present for the purpose of this meeting. We're also joined in this meeting by Mad Paws Board members, Justus Hammer, Mike Hill and Vicki Aristidopoulos. We're also joined by Graham Mason, Mad Paws CFO; Mad Paws Legal Adviser, Louisa Di Bella from Talbot Sayer Lawyers and also joins us here today. Representatives of Mad Paws share registry, Automic, are also present here today as well as online to assist in conducting the polls of the scheme meeting. I'll now go through a few administrative matters before turning to the substantive part of this meeting. The virtual component of this hybrid meeting is being held via an online meeting platform. This platform enables shareholders and proxy holders to participate in the meeting as well as ask questions and submit votes. Please note that only verified shareholders, proxy holders and corporate representatives are eligible to ask questions. For those shareholders joining the meeting online, to ask a question, select the Q&A icon and type your HIN or SRN. [Operator Instructions] Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated, or if we receive multiple questions on the topic, amalgamate it all together. [Operator Instructions] Voting procedure. As the format of the hybrid meeting is different from a standard physical meeting, I'll briefly discuss how voting will be conducted. When we reach the formal business of the meeting, voting on resolution will be conducted by poll. I will shortly open voting for the scheme resolution. If you're eligible to vote and you're attending the meeting virtually, please refer to the slides on the screen for how to log in and submit your vote. Once voting opens online, press the vote icon and the resolution will be activated with voting options. To cast your vote, simply select one of the options. The selected option will change color. You will be required to make a declaration that the online voting form has been authorized and submitted by you before selecting Confirm to submit your vote. You can change your vote up until the time I declare voting closed. For voting physical attendees. For those attending in person, all members, appointed attorneys, corporate representatives and proxies entitled to vote were given either a yellow, blue or red card upon admission to the meeting depending on your voting capacity in this meeting. For those who hold a yellow card, to cast your for, against or to abstain from voting on the scheme resolution, place a mark in the corresponding box on your voting card. If you're voting in more than one capacity, for example, as a shareholder and a proxy holder, you will have received 2 separate voting cards, enabling you to vote in each capacity. Automic will collect the voting cards at the end of the meeting. I appoint Samantha Soundara of Automic Share Registry as returning officer for the purpose of the poll. Please note that all valid proxies that have been received within the prescribed time limits have been admitted. Further, and as set out in the notice of scheme meeting and proxy form, I confirm that I intend to vote undirected proxies given to me as Chairperson of the meeting in favor of each item of the business. I now declare voting open. So the purpose of the meeting is to seek the approval of Mad Paws shareholders to the proposed scheme of arrangement, under which, if approved, Rover Group will acquire 100% of the issued share capital of Mad Paws for a cash payment of $0.14 per Mad Paws share. Rover Group is a United States company incorporated in Delaware on 18th of September 2020. Rover Group's wholly owned subsidiary, A Place for Rover, operates an online pet services platform, which connects pet parents with pet care providers who offer overnight services, including boarding and in-home pet sitting as well as daytime services, including doggy daycare, walking and drop-in visits. A Place for Rover is a United States company incorporated in Delaware on June 16, 2011. Rover is the leading online marketplace for loving pet care. Its existing global footprint spans 16 countries, including the U.S. as well as Canada, the U.K., Germany, Spain, France, Italy, the Netherlands, Norway, Sweden, Austria, Denmark, Belgium, Finland, Switzerland and Ireland. The all-cash consideration of $0.14 per Mad Paws share represents a significant premium to the closing price of Mad Paws shares prior to the announcement of the scheme on July 22, 2025, and a total transaction equity for Mad Paws of approximately $61.5 million. Shareholders have received the scheme booklet dated September 17, 2025. The scheme booklet includes, among other things, an overview of the scheme; the key considerations relevant to each shareholder's vote, including reasons to vote in favor of or against the scheme; the risks associated with the scheme; the risks associated with the continued investment in Mad Paws; an independent expert report in relation to the scheme; and a notice convening today's scheme meeting. As the scheme booklet and notice of scheme meeting have been sent to all Mad Paws shareholders and if there's no objection from the meeting, I'll take them as having been read. While I take these documents as read, I would like to draw your attention to some important considerations about the proposed structure of the scheme. The scheme is subject to a number of conditions under its terms, which are outlined in Section 4.11(a) of the scheme booklet. As of today's date, Mad Paws provides the following updates in relation to the conditions precedent: Rover has received written notice from FIRB that it has no objections to the scheme; an independent expert has provided an independent expert report concluding that the scheme is fair and reasonable in the best interest of Mad Paws shareholders in the absence of a superior proposal and as of the date of this scheme meeting. It has not withdrawn or changed the conclusion or indicated to Mad Paws, it expects to withdraw or change this conclusion. The e-commerce transactions have largely been completed with the Pet Chemist transaction completed on August 29, '25, as announced on the ASX on the very same day. And the SASH and Waggly businesses having ceased operations and the deregistration application for GASSETT GROUP being lodged with ASIC on Friday, September 12, 2025. All Mad Paws Group financial indebtedness has been prepaid, in particular, Mad Paws debt facility with Partners for Growth was fully repaid on August 29, 2025, and all PFG-held security released using proceeds received from the Pet Chemist transaction. Mad Paws has taken all necessary steps to ensure that before the scheme record date, all Mad Paws equity incentives vest and are exercised or converted into Mad Paws shares or lapse or are canceled, by virtue of the following: being granted a waiver of ASX Listing Rule 6.23.4 to permit the terms of 14,728,295 unlisted vested options to be amended to include a cashless exercise mechanism; as well as the Board's approval of the accelerated vesting of 2,750,000 LTI options and 5,397,621 STI options; and the delivery of a notice to each holder of legacy options, STI options and IPO options, notifying them of the impact of the scheme on their options. The scheme remains subject to approval from Mad Paws shareholders and the New South Wales Supreme Court as well as a number of condition precedents as summarized on the screen. The Mad Paws Board is not aware of any circumstances to date, which will prevent any of the other outstanding operational and procedural conditions from being satisfied or waived, if applicable. Next slide, please. If the scheme is approved today, the key events and the expected timing in relation to the approval and implementation of the scheme are set out in the indicated timetable shown on the screen now. In particular, the second court date is Monday, November 3, 2025, with the court hearing to be held at 3 p.m. Sydney time. The scheme is expected to become effective and Mad Paws shares will be suspended from trading at the close of trading on the ASX on Monday, November 3, 2025. The scheme record date for determining entitlements to the scheme consideration is scheduled for 7 p.m. Sydney time on Thursday, November 6, 2025; and the scheme is expected to be implemented and the scheme consideration paid on Tuesday, November 11, 2025. Next slide, please. Board recommendation. In making their recommendation, your directors comprising the Mad Paws Board have considered the reasons why you should vote in favor of the scheme and the reasons why you may wish to consider voting against the scheme. These are set out in details in the scheme booklet. The Mad Paws Board members continue to unanimously recommend the Mad Paws shareholders vote in favor of the scheme in the absence of a superior proposal and subject to independent expert continuing to conclude that the scheme is in the best interest of Mad Paws shareholders. The Mad Paws Board members collectively hold control of 27,516,513 Mad Paws shares, representing approximately 6.69% of the Mad Paws shares on issue. Each Mad Paws Board member has either instructed prior to the scheme meeting that their director Mad Paws shares be voted in favor of the scheme or intends to vote their director Mad Paws shares in favor of the scheme at this scheme meeting, subject to those same qualifications. Two major shareholders of Mad Paws, Bombora Special Investments Growth Fund and former Executive Director, Howard Humphreys, together hold and control the votes in relation to 94,354,547 Mad Paws shares, representing 22.91% of the Mad Paws shares on issue. Prior to this scheme meeting, each major shareholder has instructed that the major shareholder shares voted in favor of the scheme subject to those same qualifications. As of the commencement of this scheme meeting, there's been no superior proposal. And the independent expert continues to conclude that the scheme is in the best interest of Mad Paws shareholders. In relation to recommendation of the Mad Paws Board members to vote in favor of the scheme, Mad Paws shareholders should have regard to the personal interest of the Mad Paws Board members, which are set out in the scheme booklet. In particular, if Mad Paws shareholders approve the scheme by the requisite majority of today's meeting, certain Mad Paws equity incentives will be exercised via cashless exercise and others will be entitled to early vesting in connection with the scheme. As a result of these mechanics, myself will be entitled to the issue of 1,287,793 Mad Paws shares on exercise of 1,482,656 legacy options via cashless exercise, which has a value of slightly over $180,000 based on the scheme consideration. And Justus Hammer will be entitled early vesting of 1,727,243 STI options, 2,000,000 LTI options, and the issue of 3,167,426 Mad Paws shares on exercise of 3,646,707 legacy options via cashless exercise, which all have a combined value of approximately $965,000 based on the scheme consideration, in addition to holding other STI options which have already vested and will be exercised in connection with the scheme. Further detail regarding the interests held by all Mad Paws Board members is set out in the scheme booklet recognizing that the aforementioned interest of myself and Justus Hammer are limited to our respective interests in those Mad Paws equity incentives, which will be exercised via cashless exercise or entitled to early vesting as part of the scheme. The Mad Paws Board, excluding my vote with respect to the cashless exercise and Justus' vote with respect of the accelerated vesting and cashless exercise, resolved the benefits of the accelerated vesting of the relevant Mad Paws equity incentive and the cashless exercise are not materially sufficient so as to preclude either myself or Justus from voting or being present for the scheme resolution or preclude either myself or Justus from recommending and voting in favor of the scheme. In addition to the above, if Mad Paws shareholders approve the scheme by the requisite majorities at today's meeting and the scheme becomes effective, each Mad Paws Board member will be paid a special exertion bonus to recognize the significant additional time and services outside the scope of their ordinary duties provided in connection with the scheme. Again, the details of which are set out in the scheme booklet. And if the scheme is implemented, Justus Hammer will be entitled to receive a one-off cash payment in connection with financial year '25 performance, incentives that he would otherwise receive in the form of zero-price options granted under the Mad Paws employee incentives plan, absent the scheme. The Mad Paws Board considers that notwithstanding these interests, it is appropriate for the Mad Paws Board members to make such a recommendation given the importance of the scheme and their roles as directors of Mad Paws. Conclusion of the independent expert. The Mad Paws Board commissioned an independent expert, Stantons Corporate Finance, to prepare the independent expert's report in relation to the scheme. The independent expert has concluded that the scheme is fair and reasonable and is in the best interest of Mad Paws shareholders in the absence of any superior proposal. Process following the shareholder approval. If the scheme resolution is approved today at today's scheme meeting, the second court hearing will be held at 3 p.m. Sydney time on November 3, 2025. If the court approves the scheme, a copy of the court orders will be lodged with ASIC, and the scheme will become effective. On the implementation date, which is currently expected to be November 11, '25, Rover will acquire all of the Mad Paws shares on issue and the scheme consideration of $0.14 per Mad Paws share will be paid to shareholders. Next slide, please. So let's go to formalities of the scheme meeting. We now come to the formal business of the scheme meeting. The purpose of the scheme meeting is to consider, and if thought fit, to approve to the scheme of arrangement proposed to be made between Mad Paws and its shareholders. In order for Mad Paws shareholders to receive the scheme consideration, it is necessary that scheme shareholders resolve to approve the scheme. The scheme resolution needs to be approved by a majority in number and meaning more than 50% of Mad Paws shareholders present and voting at the scheme meeting either in person, online or by proxy, representative or attorney, or in the case of corporate Mad Paws shareholders, body corporate representatives; and at least 75% of the total number of votes cast on the scheme resolution at the scheme meeting by Mad Paws for shareholders present and voting at the scheme meeting, again, either in person, online or by proxy, representative, attorney, or in the case of corporate Mad Paws shareholders, body corporate representatives. Your Mad Paws Board members will be exercising their voting rights in favor of the scheme resolution. The scheme resolution in the notice of meeting is now shown on the screen. And as you can read, it reads as follows that pursuant to, and in accordance with Section 411 of the Corps Act, the scheme, the terms of which are contained in and more particularly described in the scheme booklet of which this notice of scheme meeting forms part, is approved with or without modifications, alterations or conditions as approved by the court which Mad Paws and Rover agree in writing. And the Mad Paws Board is authorized to implement the scheme with any such modifications, alterations or conditions. We will now, at the next slide, please address any questions that we have received. I'll endeavor to answer your question straight away or by directing them to appropriate representatives of Mad Paws at the scheme meeting. However, I do reserve the right to take a question on notice if an immediate answer is not available or if the question is specific and not of interest to shareholders as a whole. Please also note that your questions may be moderated if we receive multiple questions on one topic. In terms of process, if there are written comments or questions, I'll ask Graham Mason to read them to the meeting. If there are any verbal comments or questions, I'll invite you to ask. I'll then respond or designate someone to respond to your questions. We're grateful for your comments and acknowledge and note them accordingly. I now open the floor to questions. Please state your name and representation before asking questions. No questions?

No questions online. No questions.

Questions online? Perfect. So next slide, please. Proxy votes. So details of the proxies received for today's meeting are now displayed on the screen. As mentioned in the notice of scheme meeting, I'll cast all undirected proxies that I hold in my capacity as Chairperson of the meeting in favor of the scheme resolution. If there are no further questions in relation to the scheme, we will now proceed to voting. I now put the scheme resolution to the meeting. If you haven't already done so, could you please now submit your vote on the scheme resolution. Your vote cannot be counted unless it is lodged. A representative from Automic will start collecting the voting cards from the floor. If you require assistance, please see the registration desk. [Voting]

Ladies and gentlemen, that concludes the business of the scheme meeting. The results of the poll will be released shortly on both Mad Paws website and on the ASX market announcements as soon as they've been counted and verified. Mad Paws Board and management would like to thank you all for your participation in today's meeting, and I now declare the meeting closed, subject to conduct of the poll. Thank you very much.