QuickFee Limited (QFE) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I welcome you all to this Annual General Meeting of QuickFee Limited. I'm Barry Lewin, Chairman of the company. I would like to introduce you to Dale Smorgon and Bruce Coombes, my fellow directors in Australia, who are with us in person and Michael McConnell, our director who joins us via video link from the U.S. I would also like to introduce Simon Yeandle, QuickFee's Chief Financial Officer and Company Secretary. I acknowledge and thank our auditor, Alan Finnis from William Buck, who also joins us via video link to answer any questions in relation to the annual report. In addition, Scott Phillips from ABL, our legal advisers, also join us by video link and we thank ABL for hosting the company's meeting today. I now ask that all attendees switch their mobile phones to silent for the remainder of the meeting. I'm advised that the notice of meeting has been properly dispatched and that a quorum of members is present, and I'll call the meeting to order. I'll propose to conduct a meeting in 3 parts. First, I'll provide some brief comments about the 2022 financial year for QuickFee. I'll then hand over to Dale and Simon, who will provide a presentation on the financial year just gone, which talks through the QuickFee business in more detail, along with an update on the current year-to-date performance. I'll then move to the formal business of the meeting. There are 7 resolutions to be considered by shareholders today, and these are set out in the notice of meeting. An opportunity will be given to shareholders to ask questions about or make comments on the items of business on the agenda for today's meeting. The Board recommends that shareholders vote in favor of all resolutions other than resolution 1 on the adoption of the remuneration report, for which the Board abstains from providing a recommendation in the interest of good governance. Moving to my Chairman's message. I'm delighted to welcome you today as Chairman of QuickFee Limited. I extend a warm welcome to shareholders who are attending in person and online and to my fellow directors. I also welcome all members of our dedicated management team, both in Australia and the United States. I'm pleased to report that the year ended 30 June 2022 was a year of solid progress for QuickFee, setting up our company for sustained profitability and a bright future. QuickFee has progressed its suite of innovative online payment solutions and low-risk loan origination offerings over the past 2 years, assisting customers of professional, commercial and personal services providers to access the advice and service they need with the choice to pay now or over time. During the financial year '22, QuickFee delivered growth in all key drivers of the business. Local transaction volumes were up 44%. Financing in the U.S. and Australia was up 11% and 24%, respectively, and BNPL run rate volume backlog was up 148%. These results are all directly attributable to the execution of key growth initiatives and highlight the growing demand for QuickFee's offering. In addition, we've also seen improved yields and margins, lower costs and continued low bad debts, all of which are shortening our pathway to profitability. The progress achieved in financial '22, combined with the ongoing tailwinds for the business, which include the growing prevalence of online payments in the U.S. professional services sector as well as an increased take-up of our product suite due to inflationary pressures in the economy, has positioned us favorably into financial '23. Pleasingly, we've seen continued improvement in lending across both the U.S. and Australia as COVID-19 stimulus measures come to an end. In May 2022, we completed a strongly supported share placement that raised AUD 4.4 million with global payments company, Payroc World Access, participating in the raise. The proceeds from the placement and share purchase plan will provide sufficient capital to allow QuickFee to continue to deliver our growth strategies and to target run-rate profitability by June 2023. We've invested heavily in technology to improve our competitiveness. 2022 saw the launch of QuickFee's proprietary payments platform QUBE, which has reduced costs across merchant acquisition, operations and technology, enhanced the user experience for merchants and customers. We also launched our recurring ACH product in the U.S. in the final quarter of financial '22 which will provide a recurring ACH revenue stream while simultaneously creating efficiencies for merchants and customers. Following this investment in technology, QuickFee was able to step down certain redundant operating and technology spend that was needed to build and launch the QUBE platform. Finally, Eric Lookhoff resigned from his role as CEO and Managing Director in August for personal and family reasons, after serving as CEO throughout financial '22. I'm really delighted to announce that we have appointed Jennifer Warawa as President, North America to complement our experienced management team. Dale will provide a more detailed update shortly. We are upbeat for the future of QuickFee. Whilst COVID has had its impact, we have used this time to continue to build our merchant and customer base, improve our technology and importantly, improve the operating levers that will ensure we achieve near-term profitability. We delivered record numbers in the final quarter of financial '22, and this performance has continued at similar levels throughout the period July to October of this year, which provides us with a high level of confidence in our strategy and in our execution capabilities. I step down from the role of Chairman, which I've held since the IPO, at the end of this meeting and hand over the role to Dale. I'm delighted to say the business is in the best shape it has been, and I'm very confident for the future. The Board and management team has worked tirelessly to position the business in Australia and the U.S. to take advantage of the tailwinds in the economy and to achieve sustained profitability. I would like to thank the entire QuickFee team for their committed efforts. My fellow directors and I also wish to express our sincere gratitude to all shareholders, both new and existing, for your support. We are confident you will benefit from your investment in QuickFee in the years ahead. I'll now hand over to Dale, Bruce and Simon, who will deliver a more detailed presentation of the year just passed and a business update. Thanks, Dale.

Thanks, Barry. And again, I'll extend a welcome to everybody and also take the opportunity to thank Barry as outgoing chair for his service to the organization since joining us pre-IPO. Barry has been a steady and guiding hand through what has been an interesting and challenging time for us globally, not just within QuickFee, but obviously guiding us through the pandemic and everything that, that brought upon us as a business. So I'd like to extend our heartfelt thanks to you, again, Barry, and for all the hard work and commitment in driving QuickFee forward. I'm pleased to present management's update for this AGM. FY '22 was a -- saw us move from a phase of investment in product and talent to one of focus on profitability, all the while driving growth in transaction volume and revenue. Revenue was up 24% to $10 million -- $10.9 million from $8.8 million in the prior period, driven by growth in both Australia and in the U.S. We enjoyed in that period record volumes of PayNow transactions in the U.S. Our low credit risk business model with professional firms guaranteeing all loans means, once again, we experienced industry-leading low bad debt levels. Our strong partnerships with payment processes supported by our proprietary technology platform delivered higher margins for us in the U.S. We also saw a strong recovery in the Australian market, and I'm pleased to see that continuing as our business thrives here domestically. We strengthened our balance sheet through the period with expanded borrowing facilities and, of course, also conducted a successful capital raise. Most importantly, QuickFee remains on track to achieve run rate profitability by the end of FY '23 within our existing cash and borrowing facilities. In the U.S., we saw another strong year for both PayNow and Financing with PayNow total transaction values up 44% to USD 961 million from USD 668 million in the prior period. Financing was up 11% to USD 16.8 million from $15.1 million in the prior period. And importantly, our average order value increased as well during the period, up 8% on PayNow and up 5% on Financing. Australia too continued its recovery, up 24% versus FY '21 to $38.1 million in lending for FY '22. Bruce will talk more about that shortly. Notably, we signed the Jim's Group, a wonderful franchise agreement in November '21, providing the business access to 4,500 franchise merchants in Australia, specifically within the home services market, where we offer Jim's payment plans to homeowner customers. So your company remains well funded. The Northleaf facility, which can expand to USD 70 million, increases our borrowing capacity by some 250%. And of course, we completed a successful capital raise of $4.4 million last year -- over the year, which puts QuickFee on solid footing as we entered FY '23. Most importantly, we have a known path to profitability. It's underpinned by robust projections, a loyal merchant base, predictable revenue streams, and we have executed on some prudent cost reduction strategies, including a step down in our technology spend as we completed the build of our proprietary tech platform known as QUBE. We delivered against our strategies in FY '22. Firstly, executing on an effective go-to-market strategy, we have a renewed focus on our core Professional Services market, and we launched QuickFee Connect, which we'll talk about -- which Bruce, again, will talk about more in a moment. Secondly, we completed the build of our scalable payment processing platform QUBE and we launched our automated merchant onboarding platform. And lastly, we've improved our economic model, critical as we improved ACH margins with a greater integration with our partner, BlueSnap. And through our partnership with Payroc, we also improved U.S. card margins by as much as 3x. Financing price increases implemented well ahead of inflation and interest rate rises have ensured margins have improved. We've enhanced and automated our fraud and risk detection management systems and, again, delivered another year of minimal bad debts. And last, we've engaged -- we have an engaged and highly experienced team of professionals within the payments and lending space. We have evolved as our technology has and our sales strategies continue to refine and improve. I'm now going to take the opportunity to hand across to Bruce Coombes, who will take us through the Professional Services business and the FY '22 results in Australia and the U.S. Bruce?

Thanks Dale. I suppose I'll start with why -- why do we serve Professional Services businesses, specifically, why do we serve accounting firms and law firms? The reason is these are people we deeply understand. We understand their business. We understand the risk profile of accountants and lawyers. So what do we bring to them? Number one, we bring improvement in their cash flow. We give their clients the opportunity to take the QuickFee Finance plan to pay their accountant or lawyer. The firm is paid in full, underwrites the loan for our benefit. But importantly, it gives a cash flow benefit to their client as well. It enables their clients to spread out a payment without the relationship being damaged by forcing hard collection activity. Accounting and law firms primarily sell their time. So spending less time on collections means that they have better client relationships and more time to do the things they want to do and their clients want to buy. In some cases, firms choose to use QuickFee Finance because it enables them to provide more services to their clients. Having spoken to some of the borrowers who take a loan to pay their accountant or lawyer, they do this because they want to access the full range of services the firm offers. Finally, we do this in a secure way: The payment portal is secure and our lending is secured. So what's this mean? We've seen growth. Certainly, governments around the world were pouring enormous amounts of money into the economy. As that ceased, we saw lending increase. As we see the economy in Australia and the United States tightened with increasing costs, increasing interest rates, we expect to see more of that. You can see in the charts, each of these areas has grown. The number of firms using us has grown, the number of clients using us has grown and the value of transactions going through has also grown. And as Dale pointed out, at higher margins. Here in Australia, the vast majority of our income comes from our lending product. As JobKeeper was eased back and the other stimuli were eased back, we saw these things increased. You can see from the charts, more customers, essentially the same number of firms, but significant increases in the level of lending, $38 million, up from $30 million. So I'll go back to Dale now, and he'll share a little bit more around what we did around Buy Now Pay Later and few [ other maths. ]

Thanks, Bruce. I'd like to explain the background of our discontinuation of the BNPL product which occurred during the period. In FY '22, we saw growth in BNPL volumes and that proved that there is certainly a sizable addressable services market in the U.S. However, as we've seen with other BNPL operators, to grow BNPL into a profitable business with manageable levels of bad debts would require significant further investment, substantially beyond that invested to date, to deliver a material profit contribution for QuickFee. And consequently, shortly after the end of FY '22 and after a thorough review of the business and our product strategy, both in Australia and the U.S., we made the decision to cease all BNPL operations in the United States. And so what does that mean? All U.S. BNPL product development, sales and marketing activities did cease in early FY '23. Some existing U.S. staff had been redeployed -- have been redeployed to the Professional Services segment to both ACH, card and our Financing products. Payment plans in Australia are still being offered under the Q Pay Plan brand, which, of course, incorporates the sub-brand Jim's Pay Plan for the Jim's Group franchise agreement, which we spoke to earlier, and they will continue to grow and continue to persist. I guess fundamentally, this move emphasizes our commitment to drive profitability from our core Professional Services payments and lending products. Switching gears to tech and operations. It's certainly been a transformational year for us and has delivered higher margins, and I'll touch on how. Firstly, the completion of our robust proprietary platform in QUBE, which among other things, provides QuickFee merchants with a branded point-of-purchase checkout gateway connected to multiple back-end processes and sponsor banks. We've also delivered better merchant and customer user experience. Merchants are benefited by having a single interface to accept and manage payments while providing their customers with multiple easy-to-use secure payment options. In addition, the launch of Connect into the market. Connect is certainly a key element of our strategy to deepen our relationships and create longer and greater lifetime value with the firms we serve. It also will help us attract new customers. Connect's first integration was with CCH ProSystem fx Practice Management, the most widely used invoice management software in the United States. It opens up 65% of the U.S. accounting market to QuickFee. Further Quick -- Connect integrations and sales focus are an absolute priority for us in this financial year to drive both payments and lending to CPA firms. Lastly, the build and launch of what we call recurring ACH as a payment choice for U.S. professionals. The recurring EFT payment service is not widely available in the U.S. currently and is in increasing demand as CPA firms increasingly move to fixed fee revenue models. So therefore, reoccurring payments provide a more predictable revenue stream for merchants and a convenience for their customers. It gives me a great pleasure now completing the Tech & Ops section to pass across to Simon Yeandle, our CFO and Company Secretary, who will take you through our performance so far in FY '23. Simon?

Thank you, Dale. Good afternoon, everybody. We issued a Q1 business update in October. And some of the highlights of those were, in the U.S., Our PayNow volumes were up 34% to USD 242 million comprising ACH, which was up 37% to USD 200 million and Card, which was up 20% to USD 42 million. That was underpinned by a 27% growth in active firms transacting with QuickFee in the U.S. Our Financing volumes were up 26% to USD 4.8 million, up from $3.8 million in Q1 FY '22. And the revenue from Professional Services, so PayNow and Financing, was up 50% to approximately USD 1.2 million from USD 0.8 million in Q1 FY '22. In Australia, our Financing volumes were up 10% to AUD 8.9 million and our Financing revenue was up 21% to approximately AUD 1 million. So you can see that revenue is growing faster than volume increase. And again, that's all down to increasing revenue yields, as Dale mentioned, and we'll talk a little bit more about. So moving into Q2 FY '23. So in the past 6 weeks from 1 October 2022 to the middle of November 2022, Professional Services volumes continued that growth. U.S. PayNow volumes are up 38% versus the same 6-week period in calendar year 2021. U.S. Financing volumes were up 19% versus the prior corresponding period. And in Australia, Financing is up 52% versus the same period last year. In addition, we recently announced some key Board and senior management changes. As Barry mentioned, we're delighted to have Jennifer Warawa appointed as President, North America starting next Monday. Jennifer brings 11 years' experience at global software leader Sage, leading global divisions in products, marketing and sales, specifically to the CPA vertical. And as Barry has also mentioned, he will be retiring as Chairman at the conclusion of this meeting, and Dale Smorgon will assume the Chairman role. As we have continued to inform the market, we are on track to achieve run rate profitability by the end of FY '23, within our existing borrowing facilities, and we have sufficient cash to do so. So I thought I'd explain a little bit about how we're going to get there. The clarity that's being achieved from our focus solely on Professional Services is giving us a lot more confidence about our projections, our forecasts. They're robust. We believe the numbers that we've -- that we're targeting is going to get us there. In terms of seasonality, on the top right chart on this slide, we've shown the volumes and how they do fluctuate over a financial year. You can see in Q1, which is the July, August, September quarter, it's the summer in the northern hemisphere. So volumes tend to be the weakest. In Q3, that's January, February, March. That's the tax season in the U.S. So again, activity in the U.S. is slightly slower then, but that rebounds in Q4 once all the CPA firms get out of doing tax returns and start invoicing and the activity grows. So Q4 is definitely the strongest, so we do normally finish the financial year with the strongest quarter of the year. Revenue yields are increasing as we've seen, particularly in Q1 and Q4 of last year. We've started charging higher on increasing our interest charges on our Financing product, in excess of those cash rate increases, [ not the ] borrowings. So margins are improving through both the PayNow revenue yields and the Financing interest charges, and our cost base is stable and predictable. It's largely made up of headcount costs with some third-party processing costs and technology software. So you can see on the bottom right-hand chart there, the top half of that is our revenue, which fluctuates broadly in line with the volumes. The bottom half is our EBITDA, which, while it will be negative for quarters 1, 2 and 3, we will be achieving that run rate profitability by the end of FY '23. I'll now hand back to Dale to talk a little bit about the outlook and our priorities going forward.

Thanks, Simon. I appreciate your update. Look, I think certainly, we make absolutely no apologies for repeating ourselves that our most valuable asset and our focus going forward is focusing on our footprint in the CPA and legal markets and seeking to grow without distraction in those verticals. We will continue to enjoy structural tailwinds that will drive both PayNow and Financing in the U.S. Certainly, we believe those will be buoyed by the current economic conditions, increasing demand for lending, demand we're already seeing starting to spike. We'll also continue to realize improved unit economics across all products as seen by the recent improvement in ACH revenue yield by moving to percentage pricing or from fixed fee pricing; our recent improvement in increased card surcharge revenue; and lastly, our recent improvement in interest revenue from our flexible interest pricing model. The growth in the U.S. certainly shows no sign of slowing down. The chart at the bottom of your screen shows quarterly 12-month rolling averages of U.S. PayNow volumes consistently growing quarter-on-quarter. Australia too will improve as economic conditions support lending volumes and we'll obviously continue to drive further growth through our well-established family law and disbursements funding books. Naturally, we'll be expanding our Jim's relationship and product suite to other homeowner services in Australia and PayNow credit card payments. We're projecting a steady reduction in cash burn for FY '23 as we've completed some transformational technology investments and reduced our OpEx accordingly. We will continue to evaluate any inorganic value-accretive opportunities that can accelerate our path to profitability. We certainly have and maintained a singular focus on profitability. So in conclusion, there are many reasons to be optimistic about the future of QuickFee, and we thank you for your loyalty as shareholders. We certainly possess the strength of a low-risk core business model, which is fundamental to what we're doing. There is a proven surge in online payments adoptions in the U.S., and we are riding that strong tailwind. The Connect product and its integrations with leading practice management software solutions will continue to drive greater penetration of CPA firms in the U.S. market. Our multiple layers of credit protection continue to drive our leading low bad debt charge-off rates. Of course, the digital transformation to e-invoicing continues to create strong tailwinds for us in the U.S. and we are focusing solely on the Professional Services market. At this point, I'd like to recognize and pay thanks to all of our employees for their unending commitment to our firms and to each other during a year of substantial evolution. Additionally, I'd like to thank my fellow directors for their valuable guidance and fellowship. And lastly, thank you to our shareholders for your valued investments and belief in the many opportunities that QuickFee has ahead of us. Again, before I pass to Barry, I'd like to thank Barry for his leadership as Chairman of QuickFee, and wish him well in his retirement from the Board.

Thanks, Dale. I'll now move to the formal part of today's meeting. The notice of meeting has been circulated to all shareholders, and I'd like to take the notice of meeting as having been read. All shareholders have had an opportunity to submit voting instructions via proxy. And before each resolution is put to the vote, we will display the proxy voting instructions on the screen for your information. The proxy instruction forms received are held by the company secretary and are available for inspection. Voting on each resolution at today's meeting will be conducted via poll immediately prior to the conclusion of the meeting. For those who are physically in attendance of the meeting, you will be able to submit a voting card, which will be collected by a representative from the company. Shareholders who are viewing the meeting via webcast will not be able to vote in real time. There will be an opportunity for shareholders or the representatives who are physically present today to ask questions or make comments in relation to the resolutions. If you wish to do so, I ask that you identify yourself by name and whether you are a shareholder, proxy holder or corporate representative and how many shares you either own or represent. Shareholders who are not in attendance have had an opportunity to submit questions to the company ahead of the meeting. And I will read these questions out and provide a response at the appropriate time during the course of the meeting. We have several questions. Moving to the ordinary business. I'll present for discussion the annual report of the company comprising with financial statements, the directors' report and the independent auditors' report of the company for the financial year ended 30 June 2022. The company's annual report was released to the market on 25 August 2022 and is available on the company website. There is no requirement for a resolution of the annual report be adopted. However, at this point, I invite any questions that shareholders may have in relation to the annual report for the directors or for the company's auditor Alan Finnis from William Buck in relation to the annual report. Members may ask questions of the auditor directly in relation to the conduct of the audit or on the auditor's report itself. I'm going to allow a few moments to see whether there are any questions on the annual report or the auditor questions. Mr. Secretary, is there anything to note?

No.

Okay. So there are no questions. And I'm moving to resolution 1, which is the adoption of the remuneration report. Hopefully, you'll see that on your screen. resolution 1, we need to go back one. Okay, it's now on the screen. The first item of business relates to the adoption of the remuneration report for the year ended 30 June 2022, as set out on Pages 23 to 41 of the annual report. Shareholders should note that the resolution is advisory only and does not bind the directors or the company. However, if more than 25% of the votes cast on this resolution are no votes and should the company receive 25% or more no votes on the remuneration report table at next year's annual meeting, the company would then be required under the Corporations Act to put a further resolution to members of that meeting to convene a subsequent meeting of members at which all directors of the company would be required to stand for reelection. In accordance with the ASX Listing Rules and the Corporations Act, the company will disregard any votes cast on this resolution by or on behalf of any member of the key management personnel of the company -- these details are included in the remuneration report -- or a closely related party of any key management personnel. A closely related party of such a KMP, including close family members and companies the KMP controls or a person voted -- voting as proxy for a member of the KMP or any of their closely related parties, subject to the exceptions set out on Page 3 of the Notice of Meeting. I have some questions in relation to the company's remuneration and I'll speak to those now. So question one, please provide specific details on cash bonuses paid to board members and senior management. And the question lists several bonuses that were paid effectively to Bruce Coombes, Simon Yeandle and Eric Lookhoff. And really, the response to that is these were short-term cash incentives, which were based on achieving transaction volume, revenue and net profit after tax targets for the financial year. Eric Lookhoff was appointed at a point in the cycle where the competition for talent in the payment sector was extremely strong, and the remuneration offer to Eric was commensurate in that market. I'll move to question 2. On fifth of August, the company announced that there had been no change to the remuneration of Dale, Bruce or Simon as a result of them assuming those responsibilities. The Board has now determined that Dale will receive additional remuneration in the nature of an exertion payment, and Bruce and Simon will receive additional remuneration as well, effectively contributing to the additional roles and responsibilities whilst they took on the CEO role following Eric's very unexpected departure. So I've been asked to explain why these exertion payments were made and why did the Board, two of whom directly benefit from additional remuneration, consider additional remuneration to be appropriate when all 3 beneficiaries enjoy significant salaries, fees, cash bonuses, share options and performance rights. I think I'll address the issue of conflict first. So whenever a resolution is discussed or passed which might benefit a particular director personally, that director, as is completely appropriate, steps out of the room and doesn't participate in that discussion, and that's pretty much standard conduct. So none of Dale, Bruce or Simon participated in any discussion around their retention payments -- their exertion payments, I'm sorry, and those matters were left to Mike McConnell and myself, who did not benefit at all. So at the time of the release of the news of Eric's departure and the management transition, the Board was still working through what might be appropriate remuneration arrangements, and the immediate priority was working through what CEO duties needed to be reallocated and who was best placed to take these on and to update the market on this, so that investors knew that there'd be no business disruption. Once this was finalized, the Board then put in place what we saw as a very reasonable and quite standard arrangement whereby Dale, Bruce and Simon were compensated for their additional responsibilities for a very limited period of time, which has effectively ended as of the end of this month. And it's really only fair that our people should be remunerated for taking on additional duties. I should say this, that the kitchen cabinet of Bruce, Dale and Simon took up those responsibilities without any complaint. They've managed to ensure a completely seamless transition of the CEO role from Eric, who, as I've said previously, unexpectedly left us at very short notice. And now we're delighted to have Jennifer join us next Monday and she will assume all of those responsibilities in her role as President in the United States. Just a brief comment on exertion payments. These are very usual when an executive or nonexecutive director steps up to take on additional responsibilities beyond those related to that person's usual role. And in the case of Dale, he was not on a substantial salary prior to that, he was earning a modest, I should say, very modest nonexecutive director fee prior to assuming significant executive responsibilities. I've taken a bit of time to answer what I consider to be a very good and important question. So thank you for bearing with me. Question three, this is a question around our desire to achieve cash flow breakeven as a key role and why we would pay cash bonuses and additional remuneration which is potentially contradictory to this goal. I think you might say that paying any remuneration to any executive or director might be in conflict with the role of achieving profitability. But at the end of the day, we need to pay the people who are executing the strategy for the company -- for your company as shareholders. So we're moving from a period of investment to near-term profitability. The investments the company has made have allowed the company to scale its operations and improve its economic model and we're now on track to achieve run rate profitability as you've heard before, by the end of this financial year. This is a critical milestone to prove to investors that we have a sustainable business model and a bright future. Cash bonus payments are taken into account when committing to profitability timing. So this is all in our budget. And in fact, you'll hear a little later that Bruce has agreed to take shares for part of his short-term incentive in lieu of cash bonus and Mike has agreed to take part of his nonexecutive director fee in shares as well, really demonstrating the faith they have in the company. And effectively, we've structured the remuneration so that it's compatible with the market and really to attract, retain and reward key executives in this market. So are there any other questions for me from shareholders? So with all of that, the total number of valid proxies is now on the screen. And the exact wording of resolution 1 is set out in the Notice of Meeting. So I'm putting that resolution to the meeting, and the vote on this resolution will be conducted by way of poll immediately prior to the conclusion of the meeting. So with that, we'll turn to resolution 2, which is the election of Michael McConnell as a director. And that will pop up very shortly once Simon manages the technology. Thank you, Simon. The next item on the agenda is the election of Mike McConnell as Non-Executive Director of the company. The Board appointed Mike as a Director of the company on the 25th of March 2022, and the ASX Listing Rule provides that an entity which has directors must hold an election of directors at each Annual General Meeting. Resolution 2 provides for the election of Michael McConnell as a Director of the company in accordance with clause 14.4 of the Constitution and ASX Listing Rule 14.5. Having been initially appointed a director on the 25th of March, Mike has not previously been elected by shareholders as a director of the company. The Board supports Mike's election. He's made an outstanding contribution to the Board since his appointment. He brings with him a proven commercial acumen, deep understanding of scaling B2B businesses, very significant experience at the highest levels and complements the skills of the existing directors. So Michael, I'm certain will continue to add significantly as we execute on our growth strategy. There's some biographical background information about Mike in the Notice of Meeting. And I will invite any questions in relation to Mike's election. Are there any questions? Simon?

No.

No question. So you can see the total voting on the screen. And the exact wording of the resolution is in the Notice of Meeting. So I now put the resolution to the meeting. And as before, the vote on this resolution will be conducted by way of poll immediately prior to the conclusion of the meeting. That takes me to resolution 3, which is the ratification of the placement of the issue of 36.5 million ordinary fully paid shares under ASX Listing Rule 7.1 and 7.1A on the terms and conditions set out in the explanatory statement and accompanying the Notice of Meeting. This was a placement announced on the 9th of May 2022, successfully completed to institutional and professional investors, at a per share price of $0.10 per share and raised $3.65 million. Listing Rule 7.1 provides that a company must not, subject to a number of exceptions, issue or agree to issue equity securities during any 12-month period in excess of 15% of its issued capital at the commencement of the 12-month period without shareholder approval. Listing Rule 7.1A enables a company to seek shareholder approval by special resolution passed at an AGM to have the capacity to issue up to that number of equity securities additional to -- equivalent to an additional 10% of the number of ordinary securities on issue by way of placement over a 12-month period. So that 10% is in addition to the existing 15% placement capacity under Listing Rule 7.1. Under 7.4, shareholders can ratify an issue of securities after the event. This has the effect of refreshing the company's ability to issue shares within these limits without requiring further shareholder approval. So the purpose of resolution 3 is for shareholders to ratify the previous issue of 36.5 million fully paid ordinary shares on the 13th of May, issued pursuant to the company's existing capacity and to restore the company's ability to issue further shares within the next 12-month period, not that, that's planned at all. In accordance with ASX Listing Rules, the company will disregard any votes cast on this resolution by or on behalf of any person who participated in the placement and any associate of those persons subject to the exceptions in the Notice of Meeting. So now I'm going to see if there are any questions on this resolution. Simon, are there any questions?

No, no questions.

Thank you. So you can see on the screen, total number of valid proxies that have been received and recorded and the exact wording of the resolution is in the Notice of Meeting, and I now put that resolution to the meeting, and the vote will be conducted by way of poll immediately prior to the conclusion of the meeting. So I'm now on resolution 4, which is approval of the participation by Dale Smorgon, a Director of the company, in the placement. The resolution seeks approval for the issue of up to 3.5 million shares to Dale and/or his associates at an issue price of $0.10 each on the same terms as all other placement participants, other than the fact that this timing has been delayed due to the requirement to seek shareholder approval for Dale's participation and because we didn't want to incur the cost of holding a separate AGM to approve this earlier. ASX Listing Rule 10.11 requires a listed company to obtain shareholder approval prior to the issue of securities to a related party of the company. Related party includes a director of the company, and we will disregard any votes cast on this resolution by or on behalf of Dale and any other person who will obtain a material benefit as a result of the proposed issue of the securities to Dale or his associates. Are there any questions on this resolution, Simon?

No.

Okay. So on the screen, you'll see the total number of valid proxies, which shows a very, very strong vote for the resolution. And the exact wording of the resolution is set out in the Notice of Meeting, which I now put to the meeting, and the vote will be conducted as before, by way of poll. That takes me to resolution 5, which is approval to issue performance rights to Bruce Coombes. Following a detailed review by the Board of the remuneration of Bruce Coombes, the company is proposing to issue up to a maximum of 2,278,359 performance rights to Bruce under the plan, comprising 500,000 performance rights issued under the financial year '23 long-term incentive plan, and up to 1,778,359 performance rights that Bruce has elected to receive in place of 50% of his cash short-term incentive award. Under the terms of the plan, executives and staff may elect to receive part or all of their STI awards in shares, issued at the 7-day volume-weighted average price of QuickFee Limited shares as at 1 July 2022, together with the 25% incentive bonus, also paid in shares, at the same price. The issue price for shares awarded under this component of the company's STI plan has been calculated to be $0.063 per share. Any shares issued under this plan will be issued after the completion of the financial '23 year. In the Board's view, performance rights being granted to Bruce provide an incentive for him to ensure the company continues to deliver sustainable growth. And of course, we also achieved the objective of managing cash flow. ASX Listing Rule 10.14 requires a listed company to obtain shareholder approval prior to the issue of securities under an employee incentive plan to any director of the company. And so the purpose of this resolution is to approve the issue of this number of performance rights to Bruce or his respective nominees under the plan. In accordance with the ASX Listing Rules and the Corps Act, we'll disregard any vote cast by any person referred to in the various ASX Listing Rules, including Bruce and any other director of the company who are eligible to participate in the plan and/or any associate of that person, and also any member of the key management personnel as of the time the resolution is voted on at the meeting or any of their closely related parties as a proxy, subject to the exceptions in the Notice of Meeting. So that's a mouthful, but I'll pause now and take questions in relation to the issue of performance rights to Bruce. Are there any, Simon?

No.

Any questions? No. So I think you should be able to see that the number of valid proxies is on the screen. The wording of the resolution is set out in the Notice of Meeting. I'll put that resolution to the meeting, and the vote will be conducted by way of poll immediately prior to the conclusion of the meeting. Item -- the next item is resolution 6, which is approval to issue performance rights to Michael McConnell. Mike -- this particular resolution contemplates that the company issue up to 967,262 performance rights to Michael McConnell under the plan. Michael has elected to receive part or all of his fees in shares. It's actually not all, but it's 75% of his fees in shares, issued at the 7-day volume-weighted average price of QuickFee shares as at 1 July 2022, together with a 25% incentive bonus also paid in shares at the same price, and the issue price for the shares has been calculated to be $0.063 per share. This equates to 75% of Mike's directors' fees for this financial year. And Mike's total fees are $65,000. Any shares issued under the plan will be issued after the completion of the financial '23 year. As before, we're required to obtain shareholder approval prior to issuing securities to a director of the company, and the purpose of this resolution is for shareholders to approve the issue of a maximum of 967,262 performance rights to Mike or his respective nominees under the plan. We will disregard any votes cast by any person referred to in a range of the ASX Listing Rules, including Mike, and any other key management personnel who benefit from this particular resolution. So I now invite any questions. Are there any, Simon?

No. There aren't.

No questions. The number of valid proxies is on the screen, and the exact wording is of the resolution set out in the Notice of Meeting, which I now put to the meeting, and the resolution will be voted on by way of a poll immediately prior to the conclusion of the meeting. And that takes me to the last resolution, which is resolution 7, approval of the additional share issue capacity under ASX Listing Rule 7.1A, which enables eligible entities to seek shareholder approval by special resolution to issue equity securities equivalent to an additional 10% of the number of ordinary securities on issue over a 12-month period after the AGM. This is in addition to the existing 15% placement capacity I spoke about earlier. The company is an eligible entity. It's not in the ASX 300, and it has a market cap of less than $300 million. If this resolution 7 is approved, the company will have the benefit of the additional 10% placement capacity in addition to 15% standard placement capacity. And according to -- and as required, resolution 7 seeks approval of shareholders by special resolution for the issue of up to a number of equity securities as calculated under the formula in Listing Rule 7.1A.2 at an issue price as permitted by ASX Listing Rule 7.1A.3 to such persons as the Board may determine on the terms set out in the Notice of Meeting. The effect of this resolution will allow the directors to issue equity securities under ASX Listing Rule 7.1A during the 12 months after this meeting without using the company's 15% placement capacity. Are there any questions?

No, there aren't.

No. We have the valid proxies on the screen. And the exact wording of the resolution is set out in the Notice of Meeting. I now put that resolution to the meeting. The vote on the resolution will be conducted by way of poll, and this resolution requires 75% or more votes as a special resolution. Paused to take breath and to see if there are any questions from the floor. No questions from the floor. Now that all resolutions have been put to the meeting, I declare that the poll for voting on each resolution is now open. [Voting]

If all shareholders or representatives of shareholders present at the meeting could please provide your voting card for collection and counting. I'll briefly adjourn the meeting while the votes can be counted, and I'll reconvene the meeting in approximately 5 minutes to announce the results. [Break]

Okay. Now that the -- all the resolutions -- I'm sorry, the adjourned meeting is now reconvened. The votes have been counted, and I declare that each resolution has been passed by the requisite majority. The exact results of voting on each resolution are being displayed on the screen or will be displayed on the screen. And the results will be announced to ASX following the meeting. I'm not sure that we have them on the screen just yet.

No, they'll be announced later.

All right they'll be announced, I think we're putting the [ gentlemen from boardroom ] under undue pressure. Ladies and gentlemen, that concludes the formal business of the meeting. Thank you very much for your attendance, and I declare the meeting to be closed.