The Annual General Meeting (AGM) of SUPPLY@ME CAPITAL PLC provided crucial updates on the company’s funding, operational strategies, and shareholder relations. This report encapsulates the key discussions and insights shared during the meeting, shedding light on the challenges faced and future directions of the company.

Table of Contents

• Opening Remarks
• Introduction of the Board
• Declaration of AGM Open
• Overview of AGM Business
• Presentation Overview
• Update on Corporate Funding
• Recent Equity Placing
• Funding Commitments from TAG
• Status of Funding Agreements
• Future Corporate Funding Outlook
• TAG Specific Issues
• Business Update
• Revenue Generation Challenges
• Q&A Session Overview
• Voting on Resolutions
• Conclusion of AGM
• FAQ Section

Opening Remarks

The Annual General Meeting of Supply@ME Capital PLC commenced with a warm welcome to all attendees. The meeting, convened by notice dated May 29, 2024, was chaired by Albert Gushan.

Introduction of the Board

The chairman introduced key members of the board and management team present at the AGM. Attendees included:

• Alexandra, Chief Executive Officer
• Enrio Camer, Independent Director (remote)
• David Bull, Non-Executive Director
• Alexander Gallagan, Non-Executive Director
• Amy Benning, Chief Financial Officer
• Mark Cavor, Head of Operations

Declaration of AGM Open

The Annual General Meeting was officially declared open at 11:00 a.m., with a quorum of members present. The chairman ensured all procedural requirements were met before proceeding.

Overview of AGM Business

The agenda for the AGM was outlined in the previously distributed notice. The chairman proposed to proceed with the business as stated, seeking any objections from the attendees before moving forward.

Presentation Overview

The board and management team prepared a presentation to address key themes from submitted questions. This approach aims to provide comprehensive answers efficiently.

Update on Corporate Funding

Amy, the Chief Financial Officer, began the presentation with an overview of the company’s funding situation. This update was deemed a crucial starting point for the meeting.

Recent Equity Placing

In May 2024, Supply@ME Capital PLC completed an equity placing, issuing 9 billion new ordinary shares for gross proceeds of 1.5 million. This strategic move aimed to address working capital requirements and improve the company’s NIT asset position.

Key Details of the Placing

• Straightforward placing, not a CIN or convertible loan note
• Shares initially transferred to a UK investment fund
• Approximately 50 private investors received shares
• No investors breached TR1 form submission thresholds

Funding Commitments from TAG

Over the past 15 months, Supply@ME Capital has entered into three separate contractual funding agreements with TAG. These arrangements were secured on favorable terms, considering the company’s startup nature and current external debt costs.

TAG Funding Arrangement Highlights

• TAG is a related party to Supply@ME
• Agreements carefully considered by the board
• Compliant with DTR requirements for related party transactions

Status of Funding Agreements

The company has entered into three key funding agreements with TAG. Here’s an update on their current status:

1. Unsecured Working Capital Facility

• Originally agreed in April 2023
• Amended in June 2023
• TAG provided £800,000
• Fully funded in Q1 2024
• Repaid through 1.5 billion new ordinary shares

2. Accounts Receivable Amount

• £2 million from TradeFlow business disposal
• Majority paid, £100,000 still outstanding
• Includes late payment interest

3. Top-up Shareholder Loan Agreement

• Agreed in September 2023
• Up to £3.5 million available until June 2025
• £2 million drawn down to date
• Significant delays in fund transfer

Future Corporate Funding Outlook

The company’s focus is on creating stable, recurring revenue to cover ongoing expenses. This approach aims to reduce the need for further debt and equity funding.

Potential Funding Sources

• Continued work with TAG on outstanding amounts
• Additional £1.5 million available from shareholder loan
• Possible new equity funding if revenue delays persist

The board remains committed to acting in the best interests of shareholders and the company when considering any future funding decisions.

TAG Specific Issues

TAG’s involvement with Supply@ME Capital PLC has been a topic of interest for shareholders. This section addresses key concerns and provides clarity on TAG’s role and actions.

Stock Loan Agreements

In 2020, TAG entered into three stock loan agreements to raise approximately £4 million. This funding was primarily used to finance the buyback of TAG’s remaining shares from Dominic White and support business operations.

• Agreements made during challenging market conditions
• Aimed to secure full ownership of TAG
• Supported Supply@ME’s business priorities

Business Update

The company continues to focus on developing stable, recurring revenue streams to cover ongoing expenses. This strategy aims to reduce reliance on external funding and strengthen the company’s financial position.

Current Priorities

• Expanding core business operations
• Improving cash flow management
• Exploring new market opportunities

Management remains committed to transparent communication with shareholders and acting in the best interests of the company.

Revenue Generation Challenges

The company has faced significant challenges in generating revenue, leading to delays in executing its business model. Several factors have contributed to these difficulties:

Transition from TradeFlow Infrastructure

The company had to dismantle the TradeFlow-related infrastructure and replace it with a new solution centered around SV (Supply@ME Finance). This transition process has taken longer than initially expected, contributing to delays in revenue generation.

Commercial Bank Requirements

• Rigorous due diligence processes
• Multiple checks and controls
• Requests for additional guarantees

Commercial banks, while interested in the company’s model, have imposed stringent requirements that have slowed down the execution of transactions. For example, Bank BPM requested the introduction of a “remarketer” as a condition for finalizing deals, adding complexity to the process.

Pipeline Management Challenges

The company has had to refine its approach to managing its client pipeline. This includes:

• More accurate filtering of potential clients
• Requesting letters of interest before term sheets
• Agreeing on clear timetables with clients

Market Timing and Client Readiness

The current credit crunch has created a challenging environment where companies are urgently seeking capital. Delays in providing funding can result in lost opportunities as potential clients explore alternative financing routes.

Technology and Infrastructure Development

Significant time and resources have been invested in developing the platform and necessary infrastructure to support the business model. This includes:

• Creating secure data sharing methods
• Developing algorithms for inventory analysis
• Implementing automated monitoring systems

Adapting to Diverse Client Needs

The company has discovered that a one-size-fits-all approach is not suitable for inventory monetization. Adapting to various operating models and client requirements has required additional time and resources.

Q&A Session Overview

The Q&A session addressed several key areas of concern for shareholders and provided insights into the company’s current position and future plans.

TAG’s Involvement and Financial Status

• TAG is not insolvent
• Annual reports to be approved in July
• Commitment to support Supply@ME Capital

Alexandra clarified TAG’s financial status and its ongoing commitment to supporting Supply@ME Capital. He emphasized that TAG is not insolvent and that its annual reports will be approved in July, providing transparency on its financial position.

Business Model and Revenue Generation

• Focus on origination of clients
• Revenue from service fees for inventory monetization deals
• Importance of SV in the funding structure

The company reiterated its revenue model, emphasizing the importance of client origination and service fees from inventory monetization deals. The role of SV as a strategic component in the funding structure was highlighted.

Delays in Transaction Execution

The company addressed concerns about the time taken to execute transactions, particularly with Bank BPM. Factors contributing to delays include:

• Commercial bank requirements
• Need for additional guarantees (e.g., remarketers)
• First-time transaction complexities

Platform Development and Future Plans

• Automated monitoring systems implemented
• Plans for ERP API integration
• Development of trading workflow

Mark provided an update on the platform’s development, highlighting recent improvements and outlining plans for future enhancements. The focus is on improving efficiency, scalability, and user experience.

Serious Loss of Capital Issue

The board addressed the ongoing issue of serious loss of capital, explaining its history and current status. They emphasized that future revenue generation is expected to alleviate this problem in the coming years.

Overall, the Q&A session aimed to provide transparency on the company’s challenges, progress, and future plans, addressing key shareholder concerns while maintaining a focus on the potential for future growth and revenue generation.

Voting on Resolutions

The AGM proceeded to the voting phase on key resolutions. Shareholders were given the opportunity to cast their votes on important matters affecting the company’s future direction.

Key Resolutions

• Approval of financial statements
• Re-election of board members
• Appointment of auditors
• Authorization for share issuance

The voting process was conducted transparently, with results to be announced shortly after the meeting’s conclusion.

Conclusion of AGM

The Annual General Meeting of Supply@ME Capital PLC concluded with closing remarks from the chairman. He thanked shareholders for their attendance and engagement throughout the proceedings.

Key Takeaways

• Commitment to improving financial performance
• Focus on revenue generation and cost management
• Continued efforts to enhance shareholder value

The meeting adjourned, with management pledging to keep investors informed of progress on key initiatives in the coming months.

FAQ Section

This section addresses common questions and concerns raised by shareholders during the Annual General Meeting. It provides clarity on key issues related to SUPPLY@ME CAPITAL PLC’s operations, funding, and future prospects.

What is the current status of the company’s platform?

The platform is operational and ready for use. It can ingest live data, organize it, and interrogate it to spot anomalies. The system includes automated rules to exclude non-eligible items and uses e-signature software for digital document cementing.

Are there any live transactions currently being processed?

Yes, there are live transactions being processed through the platform. These transactions are revenue-generating, although the current volume is relatively small.

How much revenue has the company generated so far?

While exact figures were not provided during the AGM, it was confirmed that the company is generating some revenue. The CFO stated that the impact of this revenue can be seen in the financial statements for FY23, though the amount is not significant at this stage.

What types of fees is the company currently collecting?

• Origination fees from clients
• License fees from stock companies
• Service fees from stock companies
• Due diligence fees for new company assessments

Why has there been a delay in generating significant revenue?

Several factors have contributed to the delay in generating substantial revenue:

• Transition from TradeFlow infrastructure
• Rigorous due diligence processes by commercial banks
• Challenges in pipeline management
• Market timing and client readiness issues
• Ongoing technology and infrastructure development

What is the company doing to address the lack of significant revenue?

The company is focusing on several areas to accelerate revenue generation:

• Continuing to work with committed partners like Bank BPM
• Refining the client pipeline management process
• Improving the platform’s functionality and efficiency
• Exploring new market opportunities

Is the company considering any acquisitions to boost revenue?

Currently, the company is not actively pursuing acquisitions. The management believes that focusing on their core business model and making it successful is the priority. However, they remain open to considering opportunities that align closely with their existing operations.

What is the status of the funding from TAG?

TAG has provided funding to Supply@ME Capital through various agreements:

• An unsecured working capital facility of £800,000 (fully funded and repaid)
• An accounts receivable amount of £2 million (majority paid, £100,000 outstanding)
• A top-up shareholder loan agreement of up to £3.5 million (£2 million drawn down)

There have been some delays in fund transfers, which the company attributes to various factors, including delays in TAG receiving its own expected inflows.

How is the company addressing its “serious loss of capital” issue?

The board acknowledges this ongoing issue and expects future revenue generation to alleviate the problem in the coming years. They are focusing on creating stable, recurring revenue streams to cover ongoing expenses and improve the company’s financial position.

What is the company’s strategy for improving shareholder value?

The company’s strategy includes:

• Focusing on revenue generation through existing pipeline
• Optimizing costs and operational efficiency
• Continuing to develop and improve the platform
• Maintaining transparent communication with shareholders
• Exploring new market opportunities within their core business model

How is the company managing its cash flow and expenses?

The company is taking several steps to manage its financial position:

• Utilizing existing funding agreements with TAG
• Exploring additional funding options if needed
• Optimizing operational costs
• Focusing on converting pipeline opportunities into revenue

What is the status of the white label transaction mentioned in previous updates?

The white label transaction, originally expected by the end of February, has been delayed. The company is still working with partners, including Bank BPM, to finalize this transaction. However, they cannot control all aspects of the process, particularly those dependent on external parties like commercial banks.

How does the company plan to restore shareholder confidence?

The company aims to restore shareholder confidence through:

• Delivering on revenue generation commitments
• Providing regular, transparent updates on progress
• Demonstrating the viability of their business model
• Achieving key milestones in platform development and client acquisition

What is the company’s outlook for the near future?

While specific projections were not provided, the management expressed a positive outlook based on recent achievements and ongoing negotiations. They emphasized their commitment to accelerating revenue generation and improving the company’s financial position.

How is the company addressing concerns about share price performance?

The board and management acknowledge shareholder frustration with the share price performance. They believe that generating consistent revenue and demonstrating the viability of their business model is the most effective way to improve share price in the long term.

Are there any plans for further equity placements or dilution?

While the company prefers to avoid further dilution, they may consider additional equity funding if revenue delays persist. Any such decisions would be made with careful consideration of shareholder interests and the company’s long-term viability.

How is the company addressing concerns about high executive compensation?

The board stated that they have optimized costs, including executive compensation. They emphasized that the current team is working extended hours to overcome challenges and deliver results. However, they also acknowledged the need to balance cost management with retaining the necessary talent to execute the company’s strategy.

What lessons has the company learned from past challenges, such as the TradeFlow acquisition?

The company has learned to be more cautious in its approach to acquisitions and infrastructure development. They are now focusing on building and optimizing their core business model rather than pursuing vertical or horizontal acquisitions that may not directly contribute to their primary objectives.

How is the company managing relationships with key partners like Bank BPM?

The company maintains regular communication with partners like Bank BPM and works to meet their due diligence and operational requirements. While they cannot control all aspects of these relationships, they are committed to pushing partners to expedite processes where possible.

What is the company’s approach to market communications and managing shareholder expectations?

The company aims to balance transparency with the need to manage expectations. They are committed to providing regular updates on material developments but also acknowledge the challenges in predicting exact timelines for complex transactions and partnerships.

How long does the company expect it will take to achieve significant, sustainable revenue?

While specific timelines were not provided, the management emphasized their urgency in generating revenue. They believe that the foundations are in place for accelerating revenue generation but cautioned that some factors, such as partner approvals and client readiness, are not entirely within their control.

What contingency plans does the company have if revenue generation continues to be delayed?

The company is exploring various options to ensure its continued operation, including:

• Maximizing use of existing funding agreements
• Potentially seeking additional equity or debt funding
• Continuing to optimize costs and operational efficiency
• Exploring new market opportunities within their core business model

The board remains committed to making decisions that balance the immediate needs of the company with long-term shareholder value.