AGMs

11 questions asked at 2022 Acrux AGM


November 25, 2022

Here is the text of the 11 written questions asked at the 2022 hybrid Acrux AGM held on November 23, plus a summary of the answers. The meeting lasted for 75 minutes with about 45 minutes of debate.

Do any of the 5 main proxy advisers - ACSI, Ownership Matters, Glass Lewis, ISS and ASA - cover us and have there been any material proxy protest votes today? Will you disclose the proxy votes before the debate on each resolution so shareholders can ask questions about the reasons if there have been any protest votes? Also, why not disclose the proxies to the ASX with the formal addresses like others now do?

Answer: no one covers us. Odd comments about having to pay to receive the service.

Our shares closed at 6c last night and more than half of our 5000 shareholders own less than $500 worth of shares, which is the threshold for a marketable parcel. Have we ever done an offer to take out unmarketable parcels? If not, why not? Also, why don't we do a 1-for-10 share consolidation so that our shares don't trade at such an embarrassingly low level?

Answer: chair scoffed at the suggestion saying a consolidation would reduce liquidity and market cap is the only figure that matters.

After another $21 million in losses over the past 2 years, we now have accumulated losses of $113.7 million, audited net assets of $9 million and a market capitalisation of $19 million. This suggests that Acrux has destroyed about $100 million of shareholders funds over its life as a public company. Could the chair and CEO both comment on the key mistakes that have been made which explain that $100 million loss and identify any decisions that they personally wish hadn't been made.

Answer: we paid out $106 million in dividends through until our key product was cancelled in September 2017 and our revenue went from $25 million a year to nothing.

Given the interesting discussions across a range of topics today, including this placement capacity resolution, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today? This is something IAG has been doing since 2003.

Answer: no

When disclosing the outcome of voting on all resolutions today, including this proposed equity issue to directors, could you please advise the ASX how many of our 5000 shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a voluntary disclosure initiative adopted by the likes of Metcash, Dexus, Webjet, Myer and Tabcorp.

Answer: no

Thank you for offering shareholders a hybrid AGM this year and will Dr Brooke commit to support doing this in future years to maximise shareholder participation? Many big companies like Argo, Bega, BHP, Blackmores, Boral, Brickworks, Commonwealth Bank, Flight Centre, Fortescue Metals and Harvey Norman all banned online questions and voting in 2022, so well done for showing them up. What was the hybrid AGM experience like from your end?

Answer: not asked.

How many placements have you done in the past and why are you requesting this extra authority? Does this suggest a big placement is imminent? Why not commit to raise money through a renounceable pro-rata entitlement offer that treats all shareholders equally and compensates non-participants? If you do proceed with a placement, will the board commit to also doing a share purchase plan for retail shareholders, complete with a secondary VWAP pricing alternative, which is common practice in the market.

Competing in the US generics space has been a bit of a graveyard for ASX listed companies. Mayne Pharma is one high profile player and its shares are dwindling at 28c. Have we ever had takeover discussions with Mayne Pharma or worked with them in any way? Can you name any ASX listed companies which have prospered in the US generics market?

Answer: Mayne Pharma is only 20% generics. We do work with them on manufacturing issues.

There was a 17% vote against Dr Brooke. What was the issue and who voted against?

Answer: not asked

Corporate voting is not a secret ballot. You should know who has voted almost 30% of directed proxies against this resolution. Have any major shareholders communicated the reasons for their against vote?

Answer: we don't know how anyone voted and no one told us.

What percentage of our 285m shares have been issued through this NED share program over the past 11 years?

Answer: not asked.