RecycLiCo Battery Materials Inc. (AMY.V) Earnings Call Transcript & Summary

Good afternoon, everyone. Welcome to the Annual General Meeting of RecycLiCo Battery Materials Inc. I would like to call the meeting to order. My name is Paul Hildebrand, and I am the Chair of the Board of Directors of the company. In accordance with the company's articles, I will act as Chair of the meeting. In addition, Teresa Piorun, the company's Corporate Secretary, will act as Secretary of the meeting. With the concurrence of the meeting, I now appoint King Tze Woo from Endeavor Trust Corporation to act as the scrutineer of the meeting. The company's articles stipulate that a quorum for the transaction of business at a meeting of shareholders is 2 persons who are or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to vote at the meeting. I have been informed by the scrutineer that we have a sufficient number of shareholders present in person or represented by proxy who hold a sufficient number of shares to constitute a quorum. I therefore declare that a quorum is present and that the meeting is regularly called and properly constituted for the transaction of business. I have before me the information circular, notice of meeting, form of proxy and Financial Statement Request Form delivered to shareholders in connection with the meeting. I will table the meeting materials together with the confirmation of mailing. In view of this, I will dispense with the calling for the reading of the notice of meeting, and I will direct the Secretary to file the materials with the minutes of the meeting. Do you have all the materials you require, Ms. Piorun?

[indiscernible].

Prior to proceeding with the business of the meeting, I wish to make a few comments regarding procedural matters. Only registered shareholders or proxy holders present at the meeting are entitled to vote. On each item of business requiring a vote, ballots will be distributed to the registered shareholders and proxy holders present at the meeting who wish to vote. The first item of business is the presentation of the annual financial statements. The company has filed the audited financial statements for the year ended January -- excuse me, July 31, 2023, and July 31, 2024, on the SEDAR website. I will ask the Secretary to table the audited financial statements for the year ended July 31, 2023, and July 31, 2024, with the meeting materials. Shareholders are invited to review the table documents or request copies, which are also available on SEDAR. The next item of business is setting the number of directors of the company. Pursuant to the articles of the company, the number of directors of the company is set to 5. I would ask the Scrutineer to circulate ballots to the shareholders and proxy holders present in person at the meeting to record your vote. Please raise your hand if you wish to record your vote. Once you have finished, please raise your hand and the Scrutineer will collect your ballot. Scrutineer, will you please hand out the ballots for the setting of the number of directors of the company.

Mr. Chairman, is there any requirement to sign in?

Yes.

[indiscernible]

That, I understand that. I don't have a problem with that, but what I'm saying is, people at the meeting should have the right to hear whether people want to present some information relative to whether the motion should be granted or should be denied. And usually, you have it, someone makes a motion [indiscernible] vote on.

Well, I think we're going to do it by way of the ballot. [indiscernible].

[indiscernible] they're either for or against a ballot on discussion. [indiscernible].

There is an opportunity for it. Mr. [indiscernible] do you have something to say about the number of directors to be elected to the Board. Feel free to speak.

I don't have any objection to 5 directors being appointed. That most and that's fine.

Okay.

But what I may have objection as to the [indiscernible].

Well, we'll deal with that when we get to [indiscernible] we're not there right now. So if you don't want to say...

I don't have any problem with financial statements. I don't have any problem with [indiscernible]. I don't have any problem with the 5 directors, none of that. The issue that I'm concerned about are resolution 1, which is the same [indiscernible].

I have been informed by the Scrutineer that with respect to the resolution to fix the number of directors of the company at 5, 94,623,823 votes were cast in favor and 8,633,696 votes were cast against. Those represent by percentages 91.6% in favor and 8.36% against. Accordingly, I declare that the number of directors of this company is set as 5. Before we move on, Mr. [indiscernible] raised a question about speaking. There is a right to speak at the meeting, and we will respect that. But I also want the people present at the meeting to know that following the conclusion of the formal legal part of the meeting, the intention of the Board of Directors is to remain here and to field questions from the shareholders present on any matter that they wish to address, and we will do our best to respond to those questions. And we will continue that for such time as people want to continue asking questions so long as it doesn't stretch on to an unreasonable length of time that basically we can't accommodate because of our personal schedules or until such time as a discussion. And we will insist that the discussions continue in a respectful and proper tone. And as long as that happens, we will stay here as long as the shareholders wish to respond to the questions. The next matter of business is the election of the directors of the company for the ensuing year. There are 5 director positions to be filled. As disclosed in the information circular, management has nominated Richard Sadowsky, Paul Hildebrand, Andris Kikauka, Rod Langtry, and Kurt Lageschulte to be elected as directors for the ensuing year or until such time as their successors are duly elected or appointed in accordance with the company's articles or until such directors' earlier death, resignation or removed. Each nominee has consented to act as a director. The company has adopted an Advance Notice, the result of which is that no nominations for election as directors will be considered from the floor. I would ask the Scrutineer to circulate the ballots to the shareholders and proxy holders present in person at the meeting to record your vote. Please raise your hand if you wish to record your vote. Once you're finished, please raise your hand and the scrutineer will collect the ballot.

Mr. Chairman, I'd like to ask a question [indiscernible] because I don't quite frankly understand this. On the same directors, we have a choice...

Correct.

And the last thing you said made it very clear that withhold votes don't count [indiscernible]. If there's insufficient -- if the number of votes are less than quorum is required to the meeting, does that mean that the directors are [indiscernible].

No.

Well, what does it mean? I am trying to understand this. I mean, I don't quite understand it. [indiscernible] I don't understand it, but I'd like you to explain it.

The requirement for -- I'm inviting Mr. Chang to correct me if I get anything wrong here because I do have legal training, but I'm not a specialist as my dear friend, Mr. Chang is. But the requirement for a quorum and the status of withheld votes and votes for are 2 separate issues. The requirement of quorum is only to convene a validly -- and in order to have a validly convened meeting. You cannot have a validly convened meeting if the quorum requirement is not met. And it happens that I was involved in a case recently involving quorum in [indiscernible]. So I can tell you that it's also the case that generally, so long as the quorum is present at the beginning of the meeting, it does not matter quorum if the number of people leave and reduce the number of shareholders present at the meeting during the meeting, quorum is required to start a meeting. But it doesn't really matter because the quorum requirement is only 5% -- excuse me, 2 or more persons present holding -- excuse me, with the ability to vote, whether in person or by proxy or representing either in person or by proxy shareholders who have more than 5% of the shares. And I don't see any...

I have no problem with that explanation relative there. The question I'm asking is what is the effect of this resolution? If it means that the withhold votes aren't counted and all the for votes are counted and there's no criteria as to how many -- what percentage of the shareholders present should be in favor of the nominate -- of the election of those slate of directors. It seems like the whole thing is a sham. I mean why are we -- why is the [indiscernible] here? It means -- it basically means that whatever we put forward, that -- it's going to be approved because [indiscernible]. And if there's no criteria, at least have majority of the quorum present to vote in favor [indiscernible] would have to vote in favor of approving the slate of directors. I mean something is not right here. I mean it doesn't make any sense to me, like if they're an attorney. And I imagine there's another attorney in the room. I used to be an attorney, and I've never seen anything like this in my life. I mean I've looked online to try and get some understanding of it. Toronto Stock Exchange had growth relative to -- if you're not a venture company, they have a majority role, but we don't have the majority role. Venture companies or the TSX Venture companies, but where does that leave us like what does this mean? I mean like -- I mean, all these people -- we all come here because we're not maybe not happy with the site of directors, and we really have no say. It's just not reasonable.

The means by which shareholders can put forward the alternate nominees for directors is through the advance notice policy. And an attempt to do that [indiscernible] the company's lawyers, it was not done validly. So the result is that there are only 5 nominees [indiscernible].

And since the withhold votes don't count, so that means every -- the whole slate of directors is approved. So why is that? It's a joke.

The same thing this year...

I don't think this is the judicious thing. But I mean sincerely, it's an insult to people like me that are here on the basis that I don't really have a vote to select a director. That doesn't make any sense to me.

In practical terms, unfortunately, that is the result of the way a public company governance is done. The procedures that need to be taken in order to create a different set of affairs [indiscernible].

But Mr. Chairman, it would seem to me -- I don't know, but it would seem to me that a sense of decency would dictate that the people here, if the number of people withholding their support for the directors is greater than the number of people holding for the directors, the directors should step aside. They should do the right thing and say, they do not want to be part of, they don't want to be management of the company. Nothing else makes sense.

Can I speak to you for a second because I'm neither a stockholder. I'm not a stockholder. But there are present here a gross minority, by proxy or in person, a gross minority of the shareholders entitled. So the notion that the Board of Directors should step aside because a gross minority of the gross minority is not happy with them is also unfair. Because those who have taken no action, presumably are either happy with the state of affairs or don't care. But it certainly is not the case that by the mere advocating that, that somehow or others dictates what the Board of Directors should do.

That's an [indiscernible] that is a nonstarter. I mean I appreciate you saying it, but it's an actual nonstarter. The facts of the matter are the meeting is held, the people who want to attend the meeting were here or they file their proxies. They have the right to voice their vote, but what we're saying -- what I'm saying is that if the people present get less and the number -- if the proxies -- if there's more withheld votes than there are for votes at the meeting, then the directors should step aside.

And that [indiscernible]...

Well, I guess we got ourselves an undue problem. We have...

Let's talk about logic because I think it's important. What that means is [indiscernible] every director would resign. That was not -- they did not have that -- and you would be left with a Board, with a company that would have insufficient directors to conduct it.

Well, then the shareholders have to get together and nominate new directors and put them in place.

And that would take months. And the company would be [indiscernible] for that period of time.

The logic behind what you said is that you're saying that the people that didn't vote are in favor [indiscernible].

No, I did not say that.

Well, you didn't say it, but you imply it.

But I ask that what I said be what I said rather than any -- that your inferences are not what I imply. What I implied is -- what I implied and I said that if the proposal was that this gross minority of the shareholders by the mere virtue of saying, we don't like this, in effect, say that the Board of Directors has to go because this gross minority would like them to, that leaves the company [indiscernible]. And that is certainly not an expression of the will of the majority of shareholders.

But here's the point. If this scenario that I'm raising is something that the directors of the company should have had thoughts on and come here prepared to answer the question to say that what happens per se if directors aren't approved. So what happens then? So then -- so rather than saying we're not taking nomination from the floor...

There is a policy. The policy...

There is the policy that you put the Board of Directors didn't change the policy.

[indiscernible] if we describe the law governing the election of directors for public companies. So the election of directors are done on a [indiscernible] basis, which means once you set the number of directors, the people who get the most number of shares will then get elected, up to the number of directors, which have been set. Now if company has an advance notice policy and most public companies these days have advance notice policy. It wasn't always the case, but the prior management of this company established back in 2018, the whole point of the advance notice policy was to prevent shareholders who show up last minute in person at the meeting to overturn management's choice. So that was the whole point of that policy. The company did receive reported alternate slate of directors, but it didn't comply with the company's best policy, so we couldn't accept it. That doesn't mean that if there are shareholders who are still unhappy, you don't have recourse or other remedies. But you have to consult your own legal advice on those matters. But for purposes of today's meetings, as the Chair has explained, withhold votes to the extent that they exceed the for votes are still just withhold votes. They are an expression, a mirror of the shareholders intent, but this is intact, but they do not count.

Now the other thing we are -- as I mentioned previously, these are the legalities of the meeting. We do intend to remain behind after the meeting where we can have a discussion also on this topic as you wish as long as it remains civil and fairly toned.

Mr. Chairman, I appreciate that. You and I discussed that before the meeting, and I appreciate that very much. I [indiscernible] of the Board, that's fine. My basic concern comes down to very simple problem that the affairs of the company under this management has been so egregiously contrary to what we thought was going to happen at the last annual meeting. And I can tell you, I've had experience dealing with public companies and private companies. And any time that shareholders express their dissent to management of the company, the management do the right thing, they step aside. They don't need to be more than involved, and they say, we welcome that, we step aside. And that's what it should be. There shouldn't be a fight here. There shouldn't be a proxy fight. There shouldn't be a need for us to call -- get the lawyer to call a special general meeting of the company to put a new slate of directors. The director should resign.

We may or may not agree with that as individuals, but it's an individual choice for each director.

I agree.

And it's a choice that we will have to make. It's not a legal requirement. And it's a choice that we will have to make once the legal requirements of the meeting are satisfied. But we do wish to proceed with the legal part of the meeting and get finished. And I will then listen to anything you have to say on that topic.

I got one more point to make, and this is important. I want to say this. As you know, this whole business was predicated on Larry Reaugh, former CEO of the company, having a property in Arizona where they thought they could refine a low-grade manganese deposit. And through [indiscernible], they came up with this process. And once they found out that it would work for battery recycling, they did that. So Larry was a mining man, understands metallurgy, understands the whole concept of extracting minerals. He knows what the market valued minerals are and everything else. The problem we have today with this Board of Directors, not one of you. Maybe Mr. Andris is the one that has some experience relative to mining and understands what the cost of extracting mineralizations are and what the value of the spot price of minerals are once you find them and sell them in the marketplace. But the rest of the Board, quite frankly, and the Business Corporation Act says that directors of the company should be suitable for the position they're holding in the company. And not one of you, except for Mr. Andris is qualified to serve as director of this company, not one of you, 0. And so why -- so on that premise, people again that you should dig into your soul and say, "Hey, enough is enough. We've got to step aside."

Well, I don't want to get into debating those issues with you at this stage of the meeting because those are more personal issues, but I will be perfectly happy to discuss all of those meetings with you further on into the afternoon. All those issues further on into the afternoon. I have no problem with that. I do want to say a couple of things about that. Mr. Reaugh, in terms of my own personal experience, Mr. Reaugh, whose judgment and business acumen you have discussed is the individual that asked me to join the Board.

I understand that.

And he did because he considered me to be someone who would help him.

Of course. And I don't have a problem with that. But now we have no one on the Board that's an expert in the concept of running a battery minerals company that is an active ongoing industrial company. This isn't a speculative company. This is supposed to be an operating company, and the Board of Directors have shown that they're not capable of running or managing an operating company.

I -- again, this is not the time of the forum for debating those issues.

Well, it is because Mr. Chairman, if the directors dig into their soul and maybe step aside, then the whole issue, the whole vote on resolution #2 may be redundant.

There are only 5 nominees for 5 positions. You're quite right. This simply as a matter of mathematics, the election is essentially a foregone legal part of this meeting. You're quite correct on that. I want to say one other thing about that. I do not participate in day-to-day management of the company because I'm not an officer.

I understand that.

I'm really only there to help the officers when they ask for it. During -- since the last election, my involvement in that role has probably declined. When Mr. Lageschulte was the interim CEO of the company. He would contact me on a weekly, if not daily basis to ask my help looking at documents and interpreting documents and for advice on the situation. The truth is, what you were saying is grossly unfair to Mr. Sadowsky because when Mr. Lageschulte resigned, Mr. Sadowsky agreed to act as the Interim Chief Executive Officer of this company and has held that role since Mr. Lageschulte's resignation. I can recall lately, I never had so much difficulty pronouncing one name in my life that I'm having right now.

[indiscernible] monthly salary? What is his monthly salary?

It is USD 7,500.

$7,500 a month.

Yes.

Having said that, let me tell you that Mr. Sadowsky's ability to read and interpret business documents that he has had to read and interpret and his ability to analyze and consider the market forces that we are fighting with is, is in my estimation, greater than either of his predecessors.

Where is the business plan? I had a phone call with Mr. Sadowsky and he agreed [indiscernible] Here's another -- it's a simple one. Now we got this famous company in Taiwan. It's now producing black mass. Isn't that wonderful? Black mass. We're not a black mass company. We're a mineral refinement company, where we can take the capital returns directly to make a battery manufacturer. So I ask the question is where is the business plan. So once they said they got start making revenue based upon the black mass, where is the revenue projections? I don't -- I'm going to ask -- I'd like to poll everyone in this room and ask them that they know what the business of RecycLiCo is. I don't know what it is. I have no idea what the business of RecycLiCo is? Is there...

Okay. I'm going to say this in response to your question. We do not wait to take up on the legal portion of this meeting discussing these types of issues because they're more appropriately dealt with later. We are perfectly happy to respond to that question later in the afternoon. We'll stay as long as you want to respond to those questions.

Mr. Chairman, I want to make something very clear. I tried twice to speak with Rod, never got the call back. I got one phone call from Mr. Sadowsky. I've sent many e-mails, you're included. [indiscernible] and the interesting thing is, one of the questions asked is [indiscernible] no one can even address that simple question. I know I asked a question what is the business plan. I know I asked question, okay, we got revenue. What is the revenue projected from the Taiwan company. I said, let us see what the revenue [indiscernible] see whether that's a viable operation over there. Like we're just -- we're in the blind here. Our shares last year, they were $0.25, $0.30, and now we're down to $0.10. We're as low as $0.085. This is outrageous. That is I told you last year, I put it in my factory savings down to $0.98.

I got to add something to this because you're going to get us outside of this formal part of the meeting. And it's all said and done, you guys have already decided last year, the Board brought their 1 person into the -- onto the Board. We wanted to put some names forward. We were never given that opportunity. We're not given that opportunity again this year. So -- and again, we're very unhappy. And we're the ones that pay attention. A lot of the small shareholders, they don't pay attention to what's going on, but I do. I've been involved with this company for a very long time. And by dismissing what he's saying is, we don't care, we'll talk about it later. I have no doubt that Richard is quite capable of reading a document, a legal document. No doubt about that. But it doesn't mean that he understands the thing that Al is talking about. I mean that is not Richard's background. He's from New York. He's a lawyer in New York. It's is a whole different ballgame as far as mining. [indiscernible] well, it still has something to do with mining, but [indiscernible].

It's absolutely in line with...

You can say what you want to say, but we are not going to respond at this point in the meeting. So having said -- and we will say later to respond to. But we don't want to take up more time at present responding to these points. I will ask if there -- if you have anything further to say, you're entitled to say it. It is unlikely that we will respond right now. Otherwise, I just like to have the ballots. [indiscernible]. Well, the ballots have been tabulated. The Scrutineer report as follows: For Paul Hildebrand, 29,500,182 ballots representing 41% were cast for, 41,521,768 representing 59% were withheld. For Richard Sadowsky, 29,243,440 representing 41% were cast for, 41,282,510 representing 59% were withheld. For Andris Kikauka, 54,654,898 representing 90% were voted for, 5,890,052 representing 8% were withheld. For Rod Langtry, 300,754,292 representing 42% were cast for, 40,772,658 representing 58% were cast against. And for Kurt Lageschulte, 27,854,709 representing 40% were cast for and 42,672,241 representing 60% were withheld. I declare that each of the nominees are elected as directors of the company to hold office until the next Annual General Meeting or until their successors are elected or appointed. The next item of business is to appoint an auditor for the ensuing year and to authorize the directors to fix the remuneration of the auditor. As noted in the notice of meeting and information circular, management has proposed that De Visser Gray LLP be appointed as an auditor of the company. I would ask the Scrutineer to circulate ballots to the shareholders and proxy holders present in person at the meeting to record your vote. Please raise your hand if you wish to record your vote. Once you've finished, please raise your hand and the Scrutineer will collect your ballot. Thank you. [Voting]

[indiscernible].

I'll tell you what. Feel free, and we will refrain from announcing the results until after you come back.

And I want to see the #4, resolution 4.

Well, I'll tell you right in advance that we're not proceeding with resolution 4. It will be withdrawn.

Is it withdrawn?

Yes.

[indiscernible] they're withdrawing #4, resolution #4. Corporate actions. They don't like the results. So they're withdrawing. [indiscernible]

I didn't call you crook.

You called me crooked.

I didn't call you crooked.

[indiscernible]. You call me or my colleagues crooked or...

Fair enough. But you take whatever we want. The fact is we have absolutely no say in this company because the Board is the ultimate person for the entire company or ultimate people and yes, that's...

[indiscernible].

We now received the voting results from the Scrutineer. The report is follows. The appointment of the De Visser Gray LLP as auditors of the company [indiscernible] next annual general meeting, and the directors are authorized to fix the remuneration we pay to them. 99,486,733 votes were cast in favor, representing 96%, and [ 2,770,784 ] votes were withheld representing 4%. I declare that De Visser Gray LLP is hereby appointed as the auditor of the company for the ensuing year and directors are authorized to fix the remuneration. The next item of business, vote in favor of Corporate Actions Resolution to approve and confirm the acts. The company management has decided to withdraw that matter [indiscernible] for consideration of the shareholders. The regular business of the meeting is completed.

Mr. Chairman, may I...

Yes, you may.

I'd like to know the vote -- the proxy votes for. I know you withdraw, but I'd like to see...

So let me explain the contest for that resolution...

But just a minute. Before you say something more, I'll make something very clear. That Resolution #4, that is what that is. That is a traditional vote of confidence for the conduct of the management of the company. And this voted against is a vote on our confidence. The Board of Directors should -- [indiscernible] if that vote is -- if the shareholder vote against [indiscernible], they should effectively resign immediately. Never mind what the law says. I am telling what the ethic says.

[indiscernible] because when I was initially engaged by the company, I thought this was a fairly uncontentious meeting and I did not know the context. And I have my associates prepare based on the [indiscernible]. It is a normal [indiscernible] resolution for small public companies in case they did something that wasn't quite completely compliant with the procedures or the corporate law or procedures [indiscernible]. But having said in light of today's meeting, there's no [indiscernible].

But I want to make one statement here. This is really important here now. Tony Mitchell and Teresa Piorun, we were at a conference downtown. And I asked them, I wanted to see the demonstration plant. So Tony said, no problem. So anyway, that was fine. So I didn't get any feedback at all. And then -- so I sent Tony an email saying, let's arrange the meeting and I want to go down to see the demonstration plant. And while there, I'd like to speak with Norman Chow with Kemetco. So anyway, I never got a reply back. And all of a sudden, I got a phone call from Richard Sadowsky; at which time, I was informed that the demonstration plant have been disassembled. Now here's the point, and this is a very significant point. This is very significant here. And this is not one of the simple, simple matters. No news release for that significant material change in the affairs of this company. And not one news release about that decommissioning of the plant. Now I'm saying that was done on purpose. Now I don't want to know who did it because they said it would affect the share price. But notwithstanding that, that information should have been disclosed. And if they didn't do it, it's conduct that is reportable to the BC Securities Commission and to the Toronto Stock Exchange. It's not acceptable.

Please do so.

Well, I think I will.

I'm inviting you. We will talk about this as soon as the formal meeting is concluded because I want to respond to it. But I invite anybody that believes that we did anything that was at least in violation of laws with regards to disclosure or corporate governance. Please file the complaints. I am so confident...

This is -- let me put it this way. This is -- not having disclosed that when it was a major asset of our company, it was a major [indiscernible] of our company. It would be like doing a drilling program on a piece of property and getting negative results and not announcing them.

I will be happy to talk to that question as soon as the meeting is done.

I'm going to say this, I want to make it clear. I'd be very surprised, and I'm very surprised that Mr. Hildebrand will support what you're saying. Because I know that in British company the whole predication of securities law is very simple, full true time disclosure. All material facts.

And as I say, I invited. Please do so.

And -- so we're not voting this resolution?

This resolution was the recommendation of counsel, it was put in.

But why then taken off ?

Did you not read this before you -- did you not read this?

I did and I...

If you did, then you should have stopped it then.

Well, we can talk...

But if you don't like the results. So now you wont'...

We can talk to this as soon as this meeting is over. I [indiscernible].

The regular business of the meeting has been completed. As there is no other business before the meeting, I now declare the meeting to be concluded. Thank you very much for attending. As promised, the entire Board remains here to answer your questions and deal with what you want to say. I would ask the recording of the meeting to stop.