My notes from the AGM below. As frustrating as it is that we...

My notes from the AGM below.

As frustrating as it is that we haven’t made an acquisition yet, it is extremely comforting to hear in some detail that management have been very active and are being disciplined in their approach to a new acquisition. It also sounds like they are getting close to a transaction with something hopefully announced in the New Year. I personally interpret this as sometime within the first 4 months of 2022 but please note this is my own interpretation/prediction only.

Listing Status

• Confirmed that the ASX is satisfied with the current deal activity and the current understanding/status quo between CSE and the ASX is that the ASX will not delist CSE so as long as they remain active in searching for an asset.
• In the unlikely event of a change of view/understanding by the ASX which may result in the delisting of CSE from the ASX, CSE intends to continue searching for an asset as an unlisted entity and upon completion of the acquisition will immediately relist to the ASX. CSE will have up to two years before a full prospectus is required to be lodged so any relisting event will be quick if a transaction is completed before the 2 year expiry.
• If the acquisition is outside the current primary business (Materials sector) there will likely be some additional discussion and consultation required with the ASX.

Acquisition Status

• CSE is entertaining a wide range of investments across materials and technology.
• An example was provided of a sub $1m exploration asset that they have reviewed as well as a $100m technology company.
• In the materials sector search CSE are looking for an advanced stage asset and provided examples of reviewing some existing plants which require refurbishment or resources projects which already have reasonable sized resources which can be readily expanded.
• In the technology sector search CSE are looking for businesses which have existing revenues, customer bases with a strong ability for growth and expansion.
• CSE confirmed that the board have considered and are open to a sell down in the company’s large SYR holding (~$10m) in order to fund an acquisition to minimize any capital raising/dilution for shareholders.

Unlisted Investments

CSE intends to hold their original investments as is and to not participate in future funding rounds.

1. Think Markets ($250k original cost base)
o CSE invested in at an original company valuation of $85m.
o Think Markets are currently undertaking a pre-IPO raise at a $300m valuation and intend to IPO the business between March-June 2022.
o The pre IPO raise valuation implies that CSE’s $250k original investment is now worth $882k.

2. Verrency Holdings ($344k original cost base)
o Verrency have recently conducted a recapitalization of the company and a change in management. As part of this they have brought on new high profile institutions such as Fidelity Investments.

Other

• Not aware of the reason/purpose for some of the large stock movements by substantial holders recently. KBC have not sold a share.