Swiss Water Decaffeinated Coffee Inc. (SWP) Earnings Call Transcript & Summary

Welcome to the Swiss Water Decaffeinated Coffee Inc. Annual General and Special Meeting of Shareholders. [Operator Instructions] And the conference is being recorded. [Operator Instructions] It's now my pleasure to turn over today's meeting to Don Tringali, Chairman of the Annual General and Special Meeting. Mr. Tringali, the floor is yours.

Well, thank you, and good afternoon, ladies and gentlemen. My name is Don Tringali, and I'm currently Swiss Water's appointed Chairman of the Board of Directors. I've been appointed to chair today's meeting in accordance with the articles and the bylaws of the company. On behalf of the Board of Directors, I wish to welcome shareholders, employees and guests to the 2022 Annual General and Special Meeting of Shareholders of Swiss Water Decaffeinated Coffee Inc. We wish this meeting could have been done in person, but to protect the health and the wellbeing of those who would normally attend we are conducting this year's meeting via live teleconference. We are pleased that all of you have come today, and we look forward to reporting on our activities. It's now 2:02, and I'd like to call the meeting to order. At the end of the meeting for any registered shareholders, we will have a question-and-answer period. As this meeting is held virtually via teleconference, we need to set out a few rules for the orderly conducting of the meeting. First, for purposes of the meeting today, voting on all matters will be conducted by telephone. If you are a registered shareholder of record or a duly appointed proxy holder and you wish to vote during the call, you must have preregistered, and you must have joined the meeting using the dial-in numbers and pin that were sent to you when you preregistered. The public access call is listen only. So for those of you who have preregistered, voting by phone will be your only opportunity to vote by ballot during the meeting, and you will only have a certain amount of time to do so when the polls are open. The second rule is that questions can only be asked by registered shareholders or duly appointed proxy holders who have preregistered. When asking a question, you must indicate your name, which entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder. Questions regarding procedural matters, which are directly related to the motions will be addressed during the meeting, and I will provide instructions if we do get any questions from preregistered shareholders or proxy holders. Questions not relating to procedural matters will be addressed at the end of the meeting. We will begin today with the formal business of the Annual General and Special Meeting of Shareholders, after which we will open the floor for those of you who are preregistered for any questions that you may have. The executive officers on this call -- the executive officers and management of the company and the scrutineer who are on this call are as follows: Frank Dennis, the President and CEO, who is also a Director; Iain Carswell, the CFO; Eve Bartnik, the Director of Financial Reporting and Treasury, and the Secretary of the company; and Marissa Beintema of Computershare Investor Services, who's serving as the scrutineer. I hereby appoint Eve Bartnik to act as Recording Secretary, and Marissa Beintema to act as a scrutineer for the meeting. The notice calling this meeting together with the related information circular and proxy form was delivered to our registered shareholders of record as of March 29, 2022, and in accordance with applicable securities legislation to beneficial holders of shares. I've received from the secretary a statutory declaration attesting to this mailing, and I direct the secretary to attach the declaration to the minutes of this meeting. According to the company's bylaws, a quorum at a shareholder meeting is met, when at least 2 persons are present where each is entitled to vote at the meeting and holding or representing by proxy not less than 10% of the votes entitled to be cast at the meeting. I've been advised by the Secretary that the scrutineer's report is complete and that a quorum is present. I, therefore, declare this meeting to be properly constituted for the transaction of company business. The minutes of last year's Annual Meeting of Shareholders of the company are available for inspection. Unless there's any objection, I will dispense with reading them. [Operator Instructions] Clearly no objections, we will move on.

Mr. Chairman, no one asked to speak.

Thank you. Since there are no questions or objections regarding last year's minutes, I will move on to presenting the financial statements and the auditor's report thereon. Could I have a motion to approve last year's minutes?

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. I now place before the meeting the report to shareholders, including the consolidated financial statements of the company for the period ended December 31, 2021, and the independent auditor's report thereon. This material is contained in the annual report that was mailed to shareholders who requested financial reports and was also made available on SEDAR and the company's website. If you have any questions on the financial report, our CFO, Iain Carswell, is available to respond during the question-and-answer period, which will be after the formal meeting. As set forth in the notice of meeting and the accompanying proxy statement, there are 4 matters presented for shareholders' vote at today's meeting: the election of directors, the appointment of auditors, the approval of the amendment to the company's RSU plan and the approval to create Class A preferred shares and Class B preferred shares. After each matter is presented and the first and second motions are complete, I will ask registered shareholders and proxy holders to raise questions relevant to the matter. After all 4 matters have been put forward, shareholders will then be able to vote on each of these managers using their telephone. During the meeting, I will provide preliminary voting results. And final results will be posted on SEDAR and our website. Moving now to the first proposal to be voted on, which is the election of the Board of Directors. In accordance with the articles and bylaws of the company, the directors have set the number of directors at 7. The Board of Directors have nominated 7 individuals named in the proxy statement to be elected to the Board of Directors for a term expiring at the close of the next Annual General Meeting of Shareholders. They are: Frank Dennis, Roland Veit; Anne Saunders, Robert Johnston, Nancy McKenzie, Alan Wallace and myself, Donald Tringali. Could I have a motion for the appointment of Mr. Dennis, Mr. Veit, Ms. Saunders, Mr. Johnston, Ms. McKenzie, Mr. Wallace and myself, Don Tringali?

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. At this time, I request that all other nominations for election to the Board of Directors be disclosed. [Operator Instructions]

Mr. Chairman, there are no other nominee directors.

Thank you. Since there are no other nominations, I declare the nominations for directors to be closed and that the 7 persons nominated to be put forward for election as directors of the corporation. Operator, could you please provide instructions for voting on the motion?

Telephone voting is now open for a motion to elect the directors. To vote in favor of the motion, please press star 1. To withhold your vote, press star 2. If you're voting multiple control numbers and do not want to vote the same for all or if you need voting support such as to vote in favor of some directors but not all, please press star 4 and your line will be flagged to speak with the scrutineer and place your vote at the end of the meeting. Once again, if you're in favor, star 1. If you wish to withhold, press star 2. And to speak to a scrutineer at the end of the meeting, press star 4. Voting will close in 5 seconds. [Voting]

Voting has closed.

The next item of business is the appointment of independent auditors of the company for the ensuing year and to authorize the directors of the company to fix the remuneration of the auditors. The Audit committee of the company has approved, with shareholder confirmation, the appointment of PricewaterhouseCoopers LLP as the [Audio Gap] company. Can I have a motion for the appointment of PricewaterhouseCoopers LLP as the auditors of the company?

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. [Operator Instructions]

Mr. Chairman, no one asked to speak.

Thank you. Since there are no questions or objections or other nominations for the company's auditor, we will move on to the vote. Operator, could you please provide instructions on voting on the motion?

Telephone voting is now open for the motion to appoint the auditor. To vote in favor of the motion, press star 1. To withhold your vote, press star 2. If you're voting multiple control numbers and do not want to vote the same for all or if you need any voting support, please press star 4 and your line will be flagged to speak with the scrutineer and place your vote at the end of the meeting. Once again, if you're in favor, press star 1. To withhold, press star 2. And to speak with a scrutineer at the end of the meeting, press star 4. Voting will close in 5 seconds. [Voting]

Voting has closed.

Thank you. The next item of business is the approval of the amendments to the 2001 Restricted Share Unit Plan as amended in 2019. In the information circular dated March 30, 2022, the directors proposed a change to the 2001 plan as previously amended in 2019. The company is proposing that the number of common shares available for issuance under the plan be increased from 815,509 shares to a maximum of 1,115,509 shares, which is 12.2% of the current issued and outstanding shares. The directors propose the following. First, that the proposed amendments to the RSU plan described under the heading, Approval of Amendments to the 2001 restricted share unit plan as amended in 2019 and substantially in the form attached as Appendix A of the company's Management Information Circular dated March 30, 2022, are approved; second, that any director or officer is hereby authorized to take all necessary steps and proceedings and to execute, deliver and file any and all applications, declarations, documents and other instruments, and do all such other action things, whether under a corporate seal of the company or otherwise, that may be necessary or desirable to give effect to this resolution. May I now please have a motion.

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. At this time, I request that all questions relevant to the amendments to the RSU plan are raised. [Operator Instructions]

Mr. Chairman, no one is asking to speak.

Thank you. Since there are no questions, I'll move on to the vote. Operator, could you please provide instructions on voting on the motion?

Telephone voting is now open for the motion to approve the amendments to the convertible debenture. To vote in favor of the motion, please press star 1. To vote against the motion, please press star 2. If you're voting multiple control numbers and do not want to vote the same for all or if you need voting support, please press star 4 and your line will be flagged to speak with the scrutineer and place your vote at the end of the meeting. Once again, if you're in favor, press star 1. To vote in opposition, press star 2. Voting will close in 5 seconds. [Voting]

Voting has closed.

Thank you. The next item of business at the meeting is the approval for the company to create Class A preferred shares and Class B preferred shares in the information circular dated March 30. The directors propose that shareholders approve a special resolution amending the Articles of Amalgamation of the company to create 2 new classes of shares, being Class A preferred shares and Class B preferred shares. In order for this special resolution to be passed, it must be approved by not less than 2/3 of the votes cast by holders of common shares in person or by proxy at the meeting. The new classes of shares will be issuable in series, which means the directors may create and determine the specific rights, privileges, restrictions and conditions to attach to the shares of each series, including the rate, form, entitlement and payment of preferential dividends, the dates and place of payment thereof, and the redemption price, terms, procedures and conditions of redemptions, if any, along with voting rights and conversion rights, if any. It's not intended that any new series of the preferred shares would be listed on the TSX or would give voting rights to holders. However, the creation and issue of any series of preferred shares will be subject to the prior approval of the TSX. Registered shareholders are entitled to dissent from this special resolution in the manner provided in the Section 190 of the Canada Business Corporations Act. Section 190 of the act as reprinted in its entirety was attached as Appendix B-2 to the Management Information Circular. As an alteration of the Articles of Amalgamation of the company to create the Class A and Class B preferred shares [ will allow greater flexibility ] to issue equity shares for the purposes of addressing future financing requirements, the Board of Directors recommends that shareholders vote for the approval of the special resolution set out in Appendix B-1 of the company's information circular to alter the Articles of Amalgamation of the company to create Class A and Class B preferred shares. May I now please have a motion?

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. At this time, I request that all questions relative to this proposal be raised. [Operator Instructions]

Mr. Chairman, no one asked [ to speak ].

Thank you. Since there are no questions, I'll move on to the vote. Operator, could you please provide voting instructions?

Telephone voting is now open for the motion to approve the amendment to the -- I'm so sorry, that -- convertible debenture, that's the wrong wording there. This is the motion relevant to the fourth proposal, the amendment...

Correct. Preferred shares.

Preferred shares. If you are voting in favor, please press star 1, to vote against, please press star 2. If you're voting multiple control numbers and do not want to vote the same for all or if you need voting support, please press star 4 and the line will be flagged to speak with the scrutineer and place your vote at the end of the meeting. Once again, if you're in favor, press star 1. To vote in opposition, press star 2. Voting will close in 5 seconds. [Voting]

Voting is closed.

Thank you. So the shareholders and proxy holders have cast their votes on all matters of this meeting. I would ask that the conference operator transfer the voting report to the scrutineer and ask that the scrutineer compile the report regarding the results of voting on all business matters. We will pause briefly to allow the votes to be counted.

Mr. Chairman, the scrutineer has compiled their report on votes on all business matters.

Thank you. The ballots have been counted and the votes tabulated by the scrutineer. The scrutineer is reporting the following preliminary results. There were 2,318,820 shares or 25.3% of the total issued and outstanding shares present and voting in person or by proxy. The preliminary results are as follows. On the first proposal, each of the 7 nominees have been elected as directors of the company to serve until the next Annual Meeting of Shareholders or until their successors are elected or appointed. On the second proposal, the appointment of PricewaterhouseCoopers LLP as the independent auditors of the company has been approved, and the Board of Directors of the company has been authorized to fix their remuneration. On the third proposal, the amendment to the RSU plan, it has been approved. And the fourth proposal, the creation of Class A and Class B preferred shares, it has been approved. I direct that the results of the poll be included with the minutes of this meeting and the results of the meeting will be announced in a press release in accordance with the policies of the TSX and filed on SEDAR. All the business for which this Annual General Meeting and Special Meeting of Shareholders was called has been completed. At this time, I request that all other business will be brought before we terminate the meeting. [Operator Instructions]

Mr. Chairman, no one asked to speak.

Thank you. Could I have a motion to terminate the meeting?

Mr. Chairman, I so move.

Mr. Chairman, I second the motion.

Thank you. As there is no further business to come before the meeting, I declare the formal part of the meeting to be concluded. Also, as there are no questions from registered voters or proxy holders, this concludes the conference call. Thank you very much.