Top Shelf International Holdings Ltd (TSI) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the Annual General Meeting of Top Shelf International Holdings Ltd. My name is Julian Davidson, and I'm delighted to address this meeting as your Chairman. It is a great pleasure to be here, and I welcome all of those here today. I'd like to take this opportunity to thank those present for taking the time to attend today's meeting. Your support and interest in the company's affairs is appreciated by the Board. Today's meeting is being held virtual only meeting via the Lumi platform. This allows shareholders, proxies and guests to attend the meeting virtually. Shareholders and proxies have the ability to ask questions and submit votes. Also present at today's meeting is my fellow director, Adem Karafili; our CEO, Trent Fraser ; Interim CFO, Dimo Argyriou; Company Secretaries, Carlie Hodges and Harry Pratt; and our F '24 audit partner, Selan Bisfreet from BDO. Representatives from our share registry, Boardroom, are also present and will be acting as returning officer and scrutineer. I'd like to take this opportunity to advise that as foreshadowed in the notice of meeting and due to the company's F '24 annual report, including the remuneration report not being complete and not having been distributed to shareholders, Resolution 1, adoption of the remuneration report will not be put at the meeting before the meeting is adjourned. The meeting will be reconvened following the adjournment once shareholders have received the completed F '24 annual report and remuneration report, at which reconvened meeting, the annual report will be received in Resolution 1 put to shareholders. I will now go through the Q&A function and voting procedures for the meeting. To ask a written question, select the messaging icon, type your question in the box towards the top of the page and press the send button. A copy of your submitted questions along with any written responses from our meeting team can be viewed by selecting my messages. [Operator Instructions]. Please note, while you can submit questions from now on, I will not address them until the relevant time in the meeting. Questions which are not relevant to the business of the meeting may be answered separately in due course via e-mail. Shortly, I will declare voting open. At that time, the resolution and voting options will appear on the screen. To cast your vote, simply select one of the options. Your vote is automatically recorded. There is no need to press a submit or enter button. You do have the ability to change your vote up until the time I declare voting closed. The resolution will soon appear. Please submit your votes at any time. I will give you a warning before I move to close voting. This now brings us to the formal part of the meeting. The company secretaries have informed me that we have a quorum present. I therefore declare this Annual General Meeting of Top Shelf open. Voting today will be conducted by way of a poll, and I now declare voting open. As mentioned, due to the company's F '24 annual report not having been completed or distributed to shareholders, neither the first item on the agenda being to receive and consider the annual report nor Resolution 1, adoption of remuneration report, will be considered today. As such, only one item of business will be put to shareholders today being Resolution 2 as listed in the Notice of Meeting sent to shareholders in October. I will take the notice of meeting and the accompanying notes and attachments as read. I now move to the item of business to be considered. Resolution 2. Resolution 2 is an ordinary resolution. This resolution seeks shareholder approval to reelect Non-Executive Director, Adem Karafili. Details of Adem's qualifications and experience are set out in the Notice of Meeting. The resolution and proxies received are shown on the screen. The Board, other than Adem, recommends that shareholders vote in favor of this resolution. Are there any questions on this resolution?

No questions, Chairman. I'll just wait a few seconds.

As there are no questions, I will move on to the next item for business -- other business. The final item on the agenda today is any other business that may legally be brought before the meeting. I note that prior to the meeting, we have not received any other items that may be brought before the meeting. We will now provide shareholders with the opportunity to ask general questions. Are there any other questions?

No questions yet, Chair. I'll just wait for the questions. We have an audio question, I believe, from Grove Investment. Lucia, are you able to put that through moderator? Do we have Stephen Grove on the line?

Yes, we do.

Go ahead.

I just got a couple of quick questions. I just wanted to ask the Board and see if we could get some responses, if I may. The first one is, has Top Shelf disclosed all its financial information in relation to the financial arrangements with Longreach to the shareholders, including terms of the financing documents and indebtedness obligations?

Do you want to ask both your questions, Stephen, and then we'll come back.

Follow on with the questions.

Please.

Question number two, has Top Shelf agreed to any extension of payment or plans with the lender in relation to its financial obligations? And what are those terms? A debt forbearance was entered into with Longreach in relation to Top Shelf's failure to repay its Longreach debt. Is that standstill arrangement ongoing? Or has a default been cured? Two to go, has Top Shelf paid the ATO? If not, what is the balance debt? And the final question is, has a payment plan been signed on historical amounts to the ATO? And can Top Shelf now disclose that to the shareholders?

Okay, Stephen, thank you. I take 5 questions. I might do them all in reverse, if you don't mind. So questions 4 and 5, has Top Shelf paid the ATO? Top Shelf is presently in negotiations with the ATO, and Top Shelf are paying small amounts of money against the outstanding balance, and they are prepaying future excise as we transact the business on a monthly basis. We are very close to finalizing a position with the ATO, and we look forward to announcing that one shortly. Working backwards through your first 3 questions. Have we disclosed all financial information regarding Longreach and its indebtedness? No, we have not at this stage, and our legal advice is the arrangements that we're putting in place with the support of Longreach will get disclosed as we bring that to finalization. And the extension of payment plan to a lender in respect of its financial obligations, that's your second question, Stephen. Could you please clarify that one for me?

Has Top Shelf -- sorry, can you hear me?

Yes.

Has Top Shelf agreed to any extension of payment plans with the lender in relation to its financial obligations? And what are those terms?

I'm not too sure I can specifically answer all of the details of that or Dimo or Adem whether you're able to either. There is a significant amount of work going on with Longreach, and we are enjoying their support. Their support obviously comes at a cost to the company. And the directors are confident we get a solution for the long-term viability for the brands and the business in due course, in which case, all of the arrangements with Longreach will get fully disclosed. What that leaves, I think, Stephen, on the table is question #3 from you, standstill or default. We are not in a position of default with Longreach. We have not received a default notice. There were previous standstill agreements executed. At this point in time, I may have to defer to Trent or Dimo because I cannot comment specifically on the status of the standstill as of today or in fact, we may have to get back to you on that. Dimo, do you have anything you could add on the status of standstill?

Yes, nothing else to add on that, and we haven't received any default notices or similar.

So Stephen, that doesn't give you a full answer to your third point, I'm sorry, but I would very happily respond to you in writing following this meeting and make that response available to all other shareholders as well.

Perfect. Thank you for that. Just in closing now, I would request that all of those questions are duly noted on the record for the AGM meeting, please.

Noted. Okay. If there are no further questions.

We have one further one, sorry, Julian. This one is a written question from a shareholder, Keegan O'Rourke. And that is what strategies are in place to restore shareholder value considering the significant drop in share price from $2.21 at listing to $0.04 currently?

Yes, that's a very fair question. The company is exploring strategic options regarding its go-forward position. It's determining the most appropriate steps for the business today, and the directors are confident there is a solution for the long-term viability for the brands in the business. We're just not in a position to be able to disclose that turnaround position at this point in time. It still remains work in progress by the company.

I'll just wait a couple of seconds, Julian, for further questions, but nothing at this stage. Thanks, Julian.

There are no items to be brought at this meeting. The receipt of the annual report and Resolution 1, adoption of the remuneration report, each being an item of unfinished business, I now declare pursuant to Rule 7.6 of the company's constitution that the meeting is adjourned till 2:00 p.m. Australian Eastern Daylight Time on Friday, 28th of February 2025, by which date the company expects shareholders will have received the company's completed F '24 annual report. A further notice of the adjourned meeting will be sent to shareholders and released to ASX in due course in accordance with the company's constitution. In a moment, the voting system will close. Please ensure that you have cast your vote on Resolution 2. I will now pause to allow you time to finalize these votes. [Voting]

I now declare voting on resolution 2 closed. The result of the poll on Resolution 2 will be announced on the ASX via ASX announcement after this meeting. Thank you for your attendance and participation. On behalf of the Board, we look forward to your continued support and to see you at the adjourned Annual General Meeting when it is reconvened on 28th February 2025 or other date notified. Thank you.