Spacetalk Limited (SPA) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Georg Chmiel, and I'm the Chairman of Spacetalk Limited, and I will be chairing the meeting today. On behalf of the Board of Directors, it's my pleasure to welcome you all to this Extraordinary General Meeting of Shareholders. The AGM is being held at the request of a group of shareholders that I refer to as the Requisitionists. As there is a quorum present, I declare the Extraordinary General Meeting of Spacetalk Limited open. The technology that you are locked in to allow shareholders, proxy holders and guests to virtually attend the meeting. All attendees can watch a live webcast of the meeting. In addition, shareholders and proxy holders have the ability to submit questions and vote. Written questions can be submitted at any time. To ask a question, select the Q&A icon at the top of the page of the virtual meeting platform, type your question in the text box and then press submit to send. 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 1 topic, amalgamated together. Finally, due to the time constraints, we may run out of time to answer all of your questions. If this happens, we will answer them in due course via e-mail or on our website. For those shareholders who wish to ask a verbal question and audio questions facility is available during this meeting. To use this service, please follow the instructions below the broadcast window on the virtual meeting platform and the moderator will facilitate your participation in the meeting at the appropriate time. You will be able to listen to the meeting while waiting to ask your questions. If you have any issues using these systems, please contact Computershare on 613-9415-4024. I encourage shareholders who are attending online to submit questions and/or request to address the meeting as early as possible. I will ask the Company Secretary, Kim Clark, to act as moderator for the meeting and read them out and read out any written questions or advise of any shareholders or proxy holders with verbal questions. In the event that I am disconnected from the meeting and cannot immediately rejoin due to technology failure, Martin Pretty or another director, will assume the role of the Chair of this meeting. Voting today will be conducted by way of a poll on the item of business. In order to provide you with enough time to vote, I will shortly open voting for the resolution. At that time, if you're eligible to vote at this meeting, a new polling icon will appear. Selecting this icon will bring up the resolution and present you with voting options. To cast your vote, simply select 1 of the options. There is no need to hit a submit or an enter button as the vote is automatically recorded. You do, however, have the ability to change your vote up until the time I declare voting closed. I appoint Nigel Bulling of Computershare Investor Services to be returning officer and to conduct the poll. I now declare the voting open. I would like to introduce to you the directors of the Board, Martin Pretty; Dr. Brandon Gien, Michael Rann; Saurabh Jain; and Mark Fortunatow. Attending from Spacetalk executive team is Jarred Puro, Previous CFO; and Company Secretary, Kim Clark. No apologies have been received for today's meeting. The notice of the meeting was made available to shareholders on the 22nd of July 2022. And if there's no objection, I shall take the notice of meeting as read. This extraordinary meeting has been convened by the directors of the company following receipt of a notice from Merewether Capital Management Propriety Limited as Manager of Merewether Capital Inception Fund, Harry Basle, Ian Cameron, Lindsay Cardno, Mitchell Cardno, Peter Cossetto & Annamaria Cossetto ATF Cossetto Family Superannuation Fund, Coz-E Pty Ltd ATF Cossetto Family Trust, Mark Gately, Savvas Ioannou & Maria Ioannou, Matthew Payne, Lasse Petersen and Lasse Petersen ATF the Icebear Trust and Neil Page, who hold together greater than 5% of the issued capital of the company. The request was made pursuant to Section 249D of the Corporations Act, which requires directors of a company to convene a meeting at the request of shareholders who selectively hold at least 5% of the votes that may be cast at a general meeting. I note that the requisitioning shareholders have withdrawn resolution 2 being a resolution in respect to removing directors appointed on and from June 27, 2022 until the end of this meeting. Therefore, this resolution will not be considered during the meeting. Accordingly, the purpose of this meeting is to consider and vote on the sole remaining resolution proposed by the requisitioning shareholders, being to remove Mark Fortunatow as Director of the company with immediate effect. The valid proxies received in advance of the meeting for the proposed resolution will be shown on the screen to enable shareholders to view them as the item is considered. I will address the resolution and any resolutions received, any questions received in respect of it during the specified item of business. I note that as a Chair, I intend to well undirected proxies are held against the resolution and the directors recommend that you vote against the resolution put to this meeting. Before we do this, a few comments of introduction. Spacetalk is a growth business. During fiscal year '22, revenues increased by 37% to $20.7 million. We would like to thank management and staff for their significant uplift in difficult market conditions. Going forward, we know the performance of any publicly listed growth company is supported by an adequate platform of governance. The Board of Directors is committed to strengthening disclosures to shareholders and regulatory compliance. As a result of that, the Board of Directors has commenced actions to improve the governance in the business further in light of the considerable size and growth trajectory of the business. Some of these actions have already been concluded, such as the appointment of 2 new independent directors and an independent chair, the introduction of external company secretarial service following the resignation of the prior company secretary earlier this year. And the establishment of Committee, Audit, Risk and Rem Nom committees, chaired by independent directors and ratification and publication of governance policies. Other actions are being worked on. The process has commenced for the appointment of a new auditor with the current auditor subject to normal rotation requirements. Recruitment of a new finance director based in Adelaide. In the interim, the outgoing CFO remains available to ensure a smooth and orderly handover and transition, improved disclosure on remuneration and other matters. A renegotiation of the terms of employment and remuneration of the CEO, which will be announced by the end of September. A continued review of other costs of the business as stated in the last appendix 4E and a further review of all governance and risk policies and the risk framework. To me, this is a very comprehensive list that should address all of the governance issues we currently have. We can see that some of the concerns of the requisitionists and other shareholders, we have engaged with are valid. To the requisitionists they make this request going forward. I invite you to construct to be engaged with the company. And for the benefit of the company acknowledging the past hereon. Dear shareholders, I would like to thank you for your patience. I will now move to the formal business of the meeting, and we'll now invite Mark Fortunatow, who is the subject of the resolution today to address the meeting. Thank you, Mark.

Thank you, Georg. I would also like to thank all shareholders for their attendance at today's extraordinary general meeting and appreciate their interest, ongoing support and commitment to the company. There is no doubt that it has been a difficult several quarters for the company and for shareholders of Spacetalk. Even more broadly, as the world has moved past the pandemic and into a more volatile economic environment, valuations in our sector have been -- have seen steep declines since December of last year. We collectively as the shareholders of Spacetalk all fill this acutely. While we cannot control the broader capital markets, we can and will focus on the core fundamentals of our business and focus on executing those things that are within our control. As the co-founder and CEO of Spacetalk and the original business MGM Wireless and still 1 of its largest shareholders, I'm committed to doing everything possible to focus on the company's commercial success, growing opportunities for the business and by extension, increasing the value of the company for the benefit of all shareholders, partners, employees and customers. I'm looking forward to working closely with Georg and the Board to ensure that we are setting a solid foundation for growth for Spacetalk as we move into the remainder of the fiscal year and the years beyond. Over the last several months, I found it very helpful to keep in mind the core purpose of our business to provide child safety and developmental tools to support wellness through both our connected wearables and through our original school business. In many cases, we are helping families with young children often with developmental challenges or special needs. This makes it critical that parents and children and also seniors can easily communicate with each other and of their families in a safe, reliable and secure manner. We are very proud of our role in helping families in this regard, and we will continue to focus our efforts to grow, improve and expand our product offerings so as to accomplish this mission. This is at the core of what we do. We have come a long way to get to this point, and it remains a long way to go. Thank you again for your support, and I'll turn it back over to the Chairman for the rest of today's proceedings.

Thank you, Mark. Dear shareholders and proxy holders. If you are eligible to vote, press the vote icon and the resolution will be activated with voting options. To cast your vote, simply select 1 of the options. As I said earlier, there's no need to hit a submit or enter button as the vote is automatically recorded. You will receive a vote confirmation notification on your screen. Resolution 1. The motion before the meeting proposes the removal of Mark Fortunatow as Director. The motion is to consider and if thought fit pass the following resolution as an ordinary resolution that Mr. Mark Fortunatow be removed as a Director of the company with immediate effect. The proxy details are displayed. Kim, are there any questions in respect of this item of business?

No. Mr. Chmiel, no questions either verbal or written.

Thank you. In that case, I now invite you to vote on this resolution. [Voting]

Ladies and gentlemen, please ensure that you have cast your vote on the resolution. I will now pause to allow you time to finalize your votes. Kim, can you confirm there are no further questions that have yet to be addressed and also remind me when I can continue to close the meeting.

There are no further questions, Mr. Chair. You are free to close the meeting once we allow people a few minutes to cast their votes. [Voting]

Mr. Chairman, you should be free to close the meeting.

Thank you. I declare the poll closed and formally charge Mr. Nigel Bulling of Computershare as returning officer to convert those votes. We will publish final voting results on the ASX platform and on our website. Thank you for your attendance today. That concludes the formal business of the meeting. There being no further business, I now declare the meeting closed.