WhiteHawk Limited (WHK.AX) Earnings Call Transcript & Summary

[Audio Gap] Valid proxies and validly appointed corporate representatives have the right to speak and vote at this meeting. If a shareholder has appointed a proxy but is present at the meeting in person, the proxy holder is not entitled to speak or vote. Joining us today, Ms. Mindy Ku, Company Secretary; Ms. Soo Kim, Chief Operating and Chief Product Officer; Mr. Phil George, Non-Executive Director; and soon to join Melissa King, Non-Executive Director; and Mr. Brian Hibbeln, Non-Executive Director. I have been informed that there is a quorum present. Therefore, the meeting is properly constituted. We're having one technical difficulty with Melissa King getting in. So we're tracking that down so that she can join us. The meeting documents. The purpose of today's meeting is to deal -- sorry, I wasn't clicking through the slides, presenter error, so I will catch up. Okay. Purpose of today's meeting is to deal with the formal business as set out in the notice of meeting dated 13 September 2024. All resolutions will be decided by poll at this general meeting. This will enable the votes of all eligible shareholders, including those voting by proxy, to be counted. Shareholders, proxies and attorneys participating in the general meeting will be able to vote virtually in real time using the live voting platform supported by the company's registry, Automic, between commencement of the meeting and the closure of voting as announced by the Chair during the meeting. The meeting will conclude when voting on all resolutions is completed. Final voting results will be released to the ASX and published on WhiteHawk's website following conclusion of today's meeting. Please refer to the notice of the meeting for links to live voting. Should you have any issues and/or not being able to access live voting, please contact company's registry Automic via e-mail at [email protected] or telephone at 1(300) 288-664. If live voting for the meeting is open, click on meeting open for voting and follow the steps provided. On a poll, each shareholder, whether voting in person, by proxy or by representative, is entitled to vote -- to 1 vote for every share held by that member. You should record your vote by selecting either the for or against. If you wish to abstain from voting, please select the abstain box next to the relevant resolution. If the proxy is the Chair of the meeting at which the resolution is voted on, the proxy must vote on a poll and must vote as directed. If the proxy is not the Chair of the meeting, the proxy need not vote on the poll. But if the proxy does, the proxy must vote as directed. If you are not a proxy holder with open votes, you may wish -- you may vote as you wish. [Technical Difficulty]

Sorry, Terry, just to stop there. We're having a bit of technical difficulties looking at the slide. Do you mind me sharing the slides -- stopping to share the slide. Alternatively, I can share the slide at my end.

Okay. Share, share. Can you see the slides?

Yes. Thank you, Terry.

Okay. Okay. Proxies. We have received proxies from a number of shareholders. To stream the meeting, details of the resolutions and the proxy votes received for each resolution will be displayed on the screen. I do not intend to read each of them out to you. Thank you, Mindy. I appreciate that. Where the proxies have appointed the Chair and no directors are given, the Chair will vote in favor of all resolutions in which the Chair is entitled to vote undirected proxies. Questions. In relation to the proceedings for today's meeting, I propose to deal with the formal items of the business as set out in the notice of the meeting. There will be opportunity for shareholders to questions. [Operator Instructions] kindly keep questions short and to the point so that we can address as many questions as possible. The questions and/or comments will be answered and addressed at the end of the formal items of business. Please start your question with a resolution or other so that we can address questions at the appropriate time. Excuse me, I forgot to close the door. I declare that the live voting is now open. There are now 8 resolutions to be considered by the meeting. On 6 August 2024, the company entered into a subscription agreement with Lind Global Fund II LP, a fund managed by Lind Partners -- sorry, I see. Okay. Resolution 1, ratification of prior issue of shares to Lind Partners under the 2024 agreement, Listing Rule 7.1. Resolution 1 seeks shareholder ratification pursuant to Listing Rule 7.4 for the issue of 15 million initial shares to Lind Partners. In total, 59,938,303 valid proxies were received and details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 1. [Voting]

We will move to the next item. Approval to issue options to Lind Partners under the 2024 agreement, Resolution 2. Resolution 2 seeks shareholder approval for the purposes of Listing Rule 7.1 for the issue of 12.5 million options to Lind Partners. In total, 55,872,659 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 2. [Voting]

The next item of business is Resolution 3, approval to issue future shares to Lind Partners under the 2024 agreement. Resolution 3 seeks shareholder approval for the purposes of Listing Rule 7.1 for the issue of shares to Lind Partners on the terms and conditions as set out in the notice of the meeting. In total, 55,872,659 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 3. [Voting]

The next item of business is Resolution 4, to issue future shares to Lind Partners under the 2022 agreement. As announced to ASX on 31 October 2022, the company entered into a share subscription agreement with Lind Partners, pursuant to which Lind Partners advanced the company a prepayment of AUD 2 million with the option for an additional AUD 1 million subject to mutual agreement. The key terms of the 2022 agreement are summarized in the notice of the meeting. Resolution 4 seeks shareholder approval of the issue of shares under the 2022 agreement for a further 3-month period from the date of this meeting. This is the maximum period allowed for this type of approval under the listing rules. In total, 55,817,104 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to resolution 4. [Voting]

The next item of business is issue of shares, Resolution 5 -- how did that happen? I skip -- sorry. Resolution 5, issue of shares to related party, Phil George. As part of Mr. George's remuneration review, the company has agreed, subject to obtaining shareholder approval to issue 200 sic [ 200,000 ] shares as remuneration review shares to Mr. George or his nominee on the terms and conditions set out in the notice of the meeting. Resolution 5 seeks shareholder approval for the issue of the remuneration review shares to Mr. George or his nominee. In total, 53,312,678 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 5. [Voting]

Resolutions 6 to 8 relate to the issue of incentive performance rights. Company has agreed, subject to obtaining shareholder approval to issue aggregate of 2,714,520 performance rights to Phil George, Melissa King and Brian Hibbeln or their nominees pursuant to the Incentive Performance Rights and Options Plan and on the terms and conditions set out in the notice of the meeting. Did I skip? hold on, just making sure -- there we go. Resolution 6. Issue of incentive performance rights to Director Phil George. Resolution 6 seeks shareholder approval for the issue of 1.2 million performance rights to Phil George or his nominee under the incentive performance rights and option plan on the terms and conditions as set out in the notice of the meeting. In total, 56,350,439 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your card in relation to Resolution 6. [Voting]

The next item of business is Resolution 7. Issue of incentive performance rights to Director Melissa King. Resolution seeks shareholder approval for the issue of 837,260 performance rights to Melissa King or her nominee under the Incentive Performance Rights and Options Plan on the terms and conditions set out in the notice of the meeting. In total, 55,585,193 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 7. [Voting]

We will now move to the final item of the formal meeting. Resolution 8. Resolution 8 seeks shareholder approval for the issue of 677,260 performance rights to Brian Hibbeln or his nominee under the Incentive Performance Rights and Options Plan on the terms and conditions as set out in the notice of the meeting. In total, 53,326,969 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 8. [Voting]

If you are intending to vote on formal business of the meeting and have not already voted, you should now finalize and submit your live votes. The voting will close 5 minutes from now. Everyone should now have the opportunity to vote on the resolutions. I declare the polls closed for the vote on each of the resolutions, which concludes the voting on the resolutions of the meeting. We have now completed the matters contained in the notice of the general meeting, and I formally declare the meeting closed as of 9:17 a.m. As previously stated, the results of the meeting will be made public on the ASX website as soon as possible. We will now move on to the presentation about the company's progress and outlook of the business, and we'll address questions and comments posted on the Zoom chat and/or e-mailed at the end of the presentation. Okay. We will get started with an update on the company. So WhiteHawk remains focused on the immense opportunity presented over the last years, which is a focus on enabling all businesses and organizations to be able to identify and mitigate their digital-age risks within budget. Our approach is to automate the assessments by fully leveraging publicly available data and AI/ML risk and threat analytics. We also continue to vet and partner with next-generation cyber innovation. We have over 200 partners, which you can check out under Innovative Solutions on the WhiteHawk website. And we have a small in-house data science and development team that continuously improves and advances the product lines, both Software as a Service and Platform as a Service. Our whole focus is on transitioning from a traditional and very complex and comprehensive and costly cybersecurity approach to an automated cyber risk to resilience. Revenue by year in USD thousands. Obviously, 2022 was the banner year for us, and we're working hard this year to get back up to that level. That was by the end of 2022, we were cash flow positive, where we break even at just over $3 million. And then we maintain, keeping our monthly costs as low as possible. We have an in-house team of 12 personnel, 90% who are business delivery and development and technically focused. With the corporate snapshot, yes, our share price is at an all-time low since 2022 when we actually took an unfair hit as a result of the rest of the tech -- global tech industry after COVID. And we are focused on bringing in the contracts and the news to get us back to the valuation where we belong. We've been able to maintain a top team. Soo Kim has now been with us for over 6 years, starting as our Chief Product Officer and then being elevated to our Chief Operating Officer. We took the opportunity this summer when our CFO retired to be able to do some restructuring and to elevate personnel who had proven themselves, Mike Ferris into the CIO position. Mike has been with us for 7 years and Michael Good to the CTO position. Michael has been with us for 6 years. Business objectives in 2024 and '25. We have done some updates to this based on some recent developments over the past few months. We have a new campaign being launched focused on regulated sectors. I'm going to do a deep dive on that. So I'll not go into it here. We have been focused on growing our U.S. federal and state and local for the past several years. We have several contracts that we have submitted for. We just submitted for the GSA SCRIPTS. This is kind of an exciting opportunity because it's a 10-year vehicle, the kind of recurring revenue opportunities that we're looking for. And we continue to go to market with selected small business primes where we're the solution and they are the service, and we opened a channel this summer for cities and municipalities via Carahsoft. We also continue to engage with consulting firms. That way, we can be the automated solution, and they can be head-to-head with the clients and customers. And then obviously, we're always focused on increasing the value and the impact on current clients. We currently have 3 proposals out with current clients in the USD 250,000 to USD 500,000. Just mapping out those projections and the pipeline and our business objectives where our existing channels are on the upsell and cross-sell and of course, the new sales bookings. We do have some updates that will be specifically coming out on the quarterly at the end of this month. And I'm very happy to say that our customer renewal is -- maintains itself at about 80%. And just as important, our employee retention of top technical talent, thanks to the leadership of Soo Kim. This just happened, Friday. So one of the major federal government regulations that we have been tracking because as you probably understand, cybersecurity sales are driven by sectors that are regulated. So over 4 years ago, the U.S. Department of Defense started an initiative, the Cybersecurity Maturity Model Certification, that they wanted every Department of Defense contractor, vendor and supplier, both primes and subcontractors to meet these requirements. It has taken much longer than we all anticipated. But on Friday, they signed the final rule. So it is, in fact, been dictated, and it is now kicking off formally. Our platform has the capability to automate a path to CMMC for companies of all sizes. So this is a strategic pipeline opportunity for us that we positioned ourselves for and are now going to reengage on. Formally, it starts to be implemented in 2025, but with over 972,000 companies that are going to have to comply that should be able to provide the kind of pipeline that we've been looking to implement, both for our Cyber Risk Program for individual companies and for our Cyber Risk Radar across supply chains for the primes. We also are just completing with the New York firm, Executive Strategy Group, a whole new marketing messaging and engagement portfolio of campaigns. Specifically, we did a deep dive across all our past pipeline and new current future opportunities, how to fully leverage both LinkedIn Navigator and other technologies like HubSpot to be able to do this at scale. We have the first campaign ready to go, which we are going to start kicking off over the next couple of weeks, which is focused on the U.S. health care sector, primarily the mid-tier. There are literally tens of thousands of targets, and we're optimizing down to the right personas. We've redone all of the messaging, and we have both the social media campaigns and e-mail campaigns that are going to be launched. After that, we're going to tailor the approach focused on the Department of Defense contractors and the CMMC requirement. A little more detail on some of the channels, but the first, the ones I've already mentioned at the top with health care and with federal prime and subcontractors. We continue to do the government pursuits. We have been plagued by a couple of protests that impacted some of the proposals, and we'll provide some of those details, not protests on us, but just on the contract vehicle in general. And -- but we have the new SCRIPTS opportunity, which we're very excited about. And then we've been able to pull in some great new opportunities with Norwich University Applied Research Institute, a new R&D event in support of Department of Defense Information Operations. We concluded the first part of that contract. We also have an exciting pilot -- paid pilot that we've kicked off with University of South Florida using our platform to train cyber interns and analysts using real data on local organizations and entities. So again, the focus is traditional cybersecurity cannot support the majority of small businesses, state and local mid-tier because it's too expensive and it's too complex. So our solution offers alternatives for all or across supply chains. And our real differentiator in the market is we have an end-to-end approach. So while a lot of our competitors who actually happen to be competimates partners will do the assessment piece or they'll do the consulting piece or they'll focus on risk mitigation or they'll resell vendor options through our platform, it's an end-to-end approach and can be used by others as well, and I'll explain that in a moment. So I wanted to give this exemplar of just a snapshot of what we did across 60 energy sector companies and organizations and what you can put together to show where they are from an e-mail security perspective, communications encryption, compromised systems. So what's in red, okay, are issues. What is in green is going well. And obviously, there's technical details behind all of this. And each entity gets a deep dive and a comprehensive assessment and action plan, maturity mapping across 14 compliance frameworks, and areas of focus and prioritization. If we're doing it across the many, it's 100% automated. If we're doing it for one enterprise, we dig in. And we can also sell now our cyber analyst platform as a service that financial institutions can use, that insurance firms can use to service their business clients and also, obviously, at the state and local level. Just our list of current product lines and our Board. So with that, I am going to stop sharing and go to questions.

Just checking once more. Well, you can also write them in, remember, to WhiteHawk investors. And I view everything that comes in via that channel, and I answer everything that comes in via that channel. So please feel free to do so. Okay, Mindy, what do you think? How is -- I see, how is the Australian company going? Meaning Australian client or -- I'm not sure what you mean, Malcolm, can you amplify? We did announce earlier this year, a couple of months back that we were very excited to get our first ASX 100 client. That relationship is going very well. We have some more work that we are teeing up for that particular client and are looking forward to building upon that relationship. Okay. Good, glad that answered it. Mindy, you give me the high sign.

I think we're good. Thanks, Terry. There's nothing -- no further questions coming through.

Okay. Well, listen, I want to thank everyone for being with us. I really appreciate how many people signed up and joined. I want to thank my amazing Board members and my COO and our Company Secretary. Greatly appreciate everybody. We're going to get -- continue to get to a great place. Thank you so much.