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

Ladies and gentlemen, and welcome to the General Meeting of WhiteHawk Limited. My name is Terry Roberts. I'm also the CEO and Chair of your company and will be chairing this meeting. I remind you that only shareholders present in-person, persons holding 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 are Ms. Melissa King, Non-Executive Director; Mr. Brian Hibbeln, Non-Executive Director; Ms. Soo Kim, Chief Operating Officer and Product Officer; and Ms. Mindy Ku, Company Secretary. I have been informed that there is a quorum. Correct, Mindy? Okay. Therefore, the meeting is properly constituted, and I declare the meeting open at 9:01 a.m. ADT. The purpose of today's meeting is to deal with the formal business as set out in the notice of the meeting dated 10 January 2025. If there are no objections in an effort to expedite proceedings, I propose notice be taken as read. All resolutions at this general meeting will be decided by poll, ensuring all eligible votes, including proxies are counted. Shareholders, proxies and attorneys can vote in real time via Automic's live voting platform from the meeting start until the Chair announces the closure of voting. The meeting concludes once all votes are cast with final results released to the ASX and published on WhiteHawk's website. 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, [email protected] or telephone at 1 (300) 288-664. If live voting for the general meeting is open, click on meeting open for voting and follow the steps provided. On a poll, each shareholder, whether voting in person or by proxy or by representative, is entitled to 1 vote for every share. Select, For, or Against to cast your vote, or select Abstain. You can choose not to vote. The Chair acting as the proxy must vote as directed. Other proxies are not required to vote. But if the proxy does so, the proxy must vote as directed. Proxy holder with open votes may vote as at their discretion. We have received proxies from a number of shareholders to streamline the meeting, details of each resolution and the corresponding proxy votes will be displayed on the screen. I do not intend to read each of them out to you. Thank goodness. Where the proxies have appointed me as the Chair and no voting directions are given, I will vote in favor of all resolutions in which I am entitled to vote undirected proxies. In relation to the proceedings for today's meeting, I propose to deal with formal items of business as set out in the notice of meeting. There will be opportunity for shareholders to provide questions. Shareholders may submit questions or written comments through the Zoom message function. or for those shareholders who have joined us via telephone, please send your question via e-mail to [email protected]. Please keep questions brief and relevant. They will be addressed after the formal items of the business, start your question with resolution or other so that we can appropriately address your questions. I declare that the live voting is now open. There are now nine resolutions to be considered by the meeting. As announced on 26 November 2024, company received firm commitments to raise up to $1.7 million pursuant to a placement of 170 million shares to professional and sophisticated investors at an issue price of $0.01 per share, together with free attaching option for every three shares subscribed. Refer to the notice for details of the options, terms and conditions. Resolution 1, seeks shareholders' ratification of the issue of 77,589,397 shares on the terms and conditions as set out in the notice of meeting. In total, 71,690,067 valid proxies were received. Details for this resolution, including proxies are on the screen. [Voting]

Resolution 2, seeks shareholder ratification for the issue of 38,910,603 shares on the terms and conditions as set out in the notice of meeting. In total, 71,688,286 valid proxies were received. Details for this resolution, including proxies are on the screen. [Voting]

Resolution 3, seeks shareholders' approval for the company to issue up to 53,500,000 shares placement participants on the terms and conditions as set out in the notice of the meeting. In total, 67,741,576 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 3. [Voting]

Next item of business is Resolution approval to issue placement options. Resolution 4, seeks shareholder approval for the company to issue up to 56,666,668 options to placement participants on the terms and conditions as set out in the meeting of the notice. In total, 71,640,443 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 4. [Voting]

Next item of business is resolution approval to issue broker options. Resolution 5. As set out in the notice of the meeting, the company has agreed to issue Peak Asset Management or its nominees, 10 million options. The broker options are part of consideration for the services provided under the leader manager mandate. Peak is not a related party of the company. Resolution 5 seeks shareholder approval for the purpose of Listing Rule 7.1 for the issue of the broker options. In total, 82,916,535 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 5. [Voting]

Resolution 6, approval to issue securities to Peak in lieu of fees. Resolution 6 seeks shareholders' approval for the company to issue up to 4,500,000 shares and 1,500,000 options to Peak Asset Management on the terms and conditions as set out in the notice of the meeting. In total, 82,974,869 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, approval to issue securities to Viaticus Capital. Resolution 7 seeks shareholder approval to issue 1,666,667 options in consideration for brokerage services provided by Viaticus Capital. In total, 77,974,659 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 7. [Voting]

Next item of business is Resolution 8. Issue of stock appreciation rights units to Director, Terry Roberts. Resolution 8 seeks shareholder approval to issue 45 million stock appreciation rights units to Terry Roberts or her nominee on the terms and conditions set out in the notice of the meeting. In total, 60,731,870 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 8. [Voting]

We will now move to the final item of the formal meeting. Resolution 9. Approval to issue incentive options to the Viaticus Capital. Resolution 9 seeks shareholder approval for issue of 30 million options to the Viaticus Capital. In total, 77,994,440 valid proxies were received. Details for this resolution, including proxies are on the screen. Please complete your voting in relation to Resolution 9. Please finalize and submit your votes now. [Voting]

If you have not yet voted, the voting will close in 5 minutes. Everyone has been provided with the opportunity to vote on the resolutions. I declare the polls closed. This concludes the voting on the resolutions of the meeting. The matters contained in the notice of the general meeting have been addressed, and I formally declare the meeting closed at 9:14 a.m. As previously stated, the results of the meeting will be made public on the ASX website as soon as possible. And now I'd like to transition to the Q&A. We will proceed later with a presentation on the company's progress and outlook, followed by responding to shareholder questions and comments submitted via Zoom chat or e-mail. I did receive two questions ahead of time, which will be the first two that I address at the end of the presentation. So WhiteHawk has always been focused on open source intelligence, which is abbreviated as OSINT and publicly available information, which is abbreviated as PAI. But we're going to do a special focus on that approach during this presentation. So we don't have the new updated version of what I consider one of the most important reports regarding online crime and fraud in the U.S., which is the FBI's annual IC3 report. So this is actually across 2023. But what I wanted to point out here is all sectors are hit hard. And remember, these are reported major events. But only a fraction of these sectors is actually regulated. And those are the sectors that WhiteHawk focuses on. Because what we have seen over the past decade is that if a business sector is not highly regulated, then they don't focus their limited resources on online crime and fraud as you would think they would. So in this case, the health care sector, financial services sector are the most highly regulated at this time, in addition, of course, to government. So we've expanded our open source intelligence product lines, and I'm going to delve into a couple of those. But the beauty of our approach is because all of the data is openly discoverable across cyber risk, cyber threat, global risk trends and how they are impacting each of the critical infrastructure sectors, our analytics have actually advanced at a pace, leveraging artificial intelligence and machine learning-based analytics dramatically over the past 5 years. And this builds upon next -- this builds upon -- next slide. Yes. Thank you. So our 2025 business objectives build upon the product lines that we have already put in place and the two new ones in particular. So, right now, I can't report on the end of the financials for 2024. Our end of year report to the ASX will come out at the end of this month, okay? But what I can say is that our new product lines, the AI-Based Critical Infrastructure Global & Regional Entity Illumination analytics and our Cyber Risk Analyst Platform-as-a-Service are allowing us to grow in areas where we haven't been able to engage and grow before, and I'll emphasize some of those. The other thing we're doing is we're advancing our partnership with Carahsoft, who has contract vehicles in place across state and local in the U.S. and in Canada and our partnership with the Norwich University Applied Research Institute, NUARI, leveraging the product line that we have actually proven out with him over the last quarter in 2024. This is also allowing us to respond -- continue to respond to request for proposals as we recently did for the State of Ohio. And also as a follow-on to a paid pilot that we completed last year with the City of Atlanta, we're responding -- we have responded to their RFP at the end of last month, which we announced in our quarterly. These are important to us because these particular contracts, the clients are allowing us to showcase what we're doing with them in a way that previous clients have not because they're once removed from the end client. So we're very excited about the opportunity to be able to showcase what we're doing with them so that we can broaden the impact across those particular sectors. The other thing that we had mentioned in the last 2 quarters of 2024 was that we knew that we needed to create sales channels parallel to the ones that we have in place right now. And so we completed a 90-day program with a New York marketing firm and are now implementing those campaigns first now across health care and then later this year across the financial sector. We've been targeting, in particular, the mid-tier because the mid-tier are underserved in the cyber risk to resilience arena, and they have the financials to be able to do it. And of course, they are highly targeted because of their critical data sets that they hold that can be resold. And our final pillar is a continued focus on growing through our consulting firm partnerships. These can be great channels for us that are working in parallel, and they don't take a lot of manpower or handholding from us because the consulting partner does all of the client interaction, and we're the technical reach back for our Cyber Risk Program, Cyber Risk Radar and assessments and due diligence and other data sets from across our partners. Next. So with the projections, and we did have one question about projections over the next 5 years. I think that would be irresponsible as a small business to give projections out that far. But I can tell you that with the current pipeline that we have of $20 million plus and the growth that we would need to get to $5.5 million that we are very optimistic of reaching that $5.5 million benchmark in 2025, also because of the new channels that we're putting in place as a result of our new product lines. We're also waiting and I'll go into detail about the government RFPs, both ones that we have responded to and that we are responding to. And I'll go into a list of those. And then, of course, existing customer upsell and cross-sell. We have been successfully renewing our contracts. You saw the announcement at the end of last year of the $2.4 million contract and we're always working on retaining current clients. All of our current clients, except for the new contracts, we have had for 2 to 5 years. Next. So while we have always had a cyber risk Platform-as-a-Service, we're now showcasing it and tailoring it in a different way. Through our pilot and now our the new program that we're putting in place with University of South Florida, University of South Florida has a very unique position in this particular office, where they are the center for connection and collaboration across over 400 colleges and universities in the United States under the NSA 502 project, which is focused on cybersecurity, academic centers of excellence, a program that was actually created more than a decade ago. And has now this opportunity to be able to use our Platform-as-a-Service in a threefold way to provide experiential cybersecurity internships at universities and colleges as we're doing with University of South Florida and five other partner universities of theirs now to be able to use real data on real state and local entities to perform those cyber risk to resilience services via our platform one-on-one with each of those entities. And then finally, because the universities are buying the data sets and because they're publicly available, then they will be able to conduct very unique and powerful research and analytics across those data sets. This is probably one of the most exciting initiatives I've ever worked on, and we are moving out at a pace to be able to implement across many universities this year. Next. So what are some of the U.S. federal and state active proposals? So those of you who have been following us, we have -- this has been delayed, the GSA SCRIPTS opportunity. It's a contract vehicle for 10 years, and we are on several teams to be selected -- in competition to be selected for the down select. We know we made the first couple of runs of the down select. We were supposed to have the final decision at the end, actually in November, December time frame. Now the reporting is that it should come out by the end of February. This -- if we are down selected, this could be a game changer for us and continually having access to any supply chain risk management opportunities across the U.S. federal government. The Ohio Department of Development RFP was very refreshing and was actually provided to us via our partner, Peraton. And we were able to respond through our other partner, Carahsoft. This is the kind of opportunity that is exactly the perfect fit for our platform to be able to provide the kind of services that our platform enables. We also responded with NUARI, the Norwich University Applied Research Institute because then they can provide the internship manpower to actually do the consulting. So we are then the technology, the platform, the tailoring and the reach back and NUARI is the manpower through the interns. And then we're in the process of responding to the Defense Advanced Research Projects Agency with an open opportunity, leveraging one of our new product lines that I'll go into and in partnership also with several of our AI analytics partners. And then the DHS CIO C-SCRM request came from one of our new partners, REI Systems, a mid-tier federal contractor in systems and IT engineering. And we're going to be a sub to them in our response later this year. And then we are responding to the Office of the Secretary of Defense Tradewinds program in partnership with NUARI. And then we're leveraging DHS S&T BAA that we already responded to, but using that response in other areas so that we can go for other opportunities as well. Next. So this is the new product line that we developed with one of our AI partners. We actually implemented it on an R&D program, a Department of Defense R&D program with NUARI, so we were able to prove the approach. And then we started realizing that while you could do it as a part of battlefield mapping of entities in any region in the world, under Department of Homeland Security, you could also use this capability to map out critical infrastructure. And so it can be used in both ways. And why is this critical? It's critical because with critical infrastructure, we have found in working at the state and local level that many states cannot give you the list of all the critical infrastructure entities in their state in an efficient and effective way. And this allows us to come up with that list through OSINT and Publicly Available Information ourselves. And therefore, it can reduce months of time and effort and delays in being able to move forward on a particular project, either with a sector or at the state and local level. Next. And just a reminder that we're still -- everything we're talking about is based on our unique approach to move from traditional cybersecurity, which is very manual and compliance focused to an automated cyber risk to resilience approach using our over 200 vetted technology partners, some of which that we can integrate into our platform, some of which that we can map to our clients. So everything we're doing is still grounded on what we put in place from the very beginning. We're just building upon that foundation. Next. And fortunately, I still have every member of our amazing executive team, all who have been with me for 5 years or more. And the beauty of this team is that we come from different backgrounds and experiences across the technical intelligence, industry and practitioner arena. And so together, we're a 360 team. We don't duplicate each other. We complement each other. Next. And then, of course, our Board. So wonderful makeup of the Board, bringing different -- again, different backgrounds, different experiences, different perspectives, different connections and so very complementary as well. So with that, I think I'll go to questions.

Let me take a look. Okay. So there were two that I had received in advance. One was where do we believe that WhiteHawk sits on the Lassonde curve. So the Lassonde curve is a very important business model entrepreneurial curve, but it's really for the mining industry. So the better curve to look at for a technology company is the S curve. And the S-curve has basically three humps. You innovate, you come up, you innovate, you come up, you innovate and then sometimes you peak, right? And so I would say we're at the bottom of that second coming up because we just had that new round of innovation. We're putting in new partnerships, new tweaks on our product lines so that then we can get to that next level of growth. The other question I had is about projections. So I talked to you about 2025. I really do need to see where some of these government contracts come out because they can give us that longer-term contract with recurring revenue while we're working the health care and the financial sector mid-tier through our new marketing and sales and leads campaigns. Just so you know just in the first slew, I've made over 300 connections and been able to establish 5 to 10 meaningful leads that we are now following up on. And just checking if there are any more questions. Okay. Well, it's always a pleasure to be able to talk with you. We're in a very exciting inflection point. And so stay tuned to WhiteHawk. Thank you, everyone, for joining us today, our Board members, our executive team and our investors. All the best.