Avante Corp. (XX) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Annual General and Special Meeting of Avante Corp. Please note that this meeting is being recorded. I would like to introduce Emmanuel Mounouchos, Chairman of the meeting. Please go ahead.

Although we are meeting virtually, our goal today is to ensure that our registered shareholders and duly appointed proxy holders are able to participate fully in the meeting. I invite our shareholders and duly appointed proxy holders to ask questions and vote on each of the matters of business as if you are attending the meeting in person. I encourage registered shareholders and duly appointed proxy holders to submit your questions or comments as early as possible so that we may address them at the right moment during the meeting. If you have a question click on the Ask A Question button located on the left side of your screen, type the question into the space provided and then press submit. Please read the instructions in the text box before submitting your question. In particular, please identify what your question relates to a motion being considered as part of the new business as the meaning. We'll try to address questions or comments that directly relate to a particular motion at the appropriate time of the meeting. As always, questions or comments should relate to the business or affairs of the corporation and not be of personal nature. Registered shareholders and duly appointed proxy holders may vote online platform throughout the meeting. To do so, click the vote icon on the left side of your screen once the polls are open. Voting will be open throughout the formal portion of the meeting. You may vote at any moment to the last item of business has been put to a vote and I declare the voting closed. If you are a registered shareholder, have appointed a proxy holder and do not wish to change your living instructions, then you do not need to do anything. If you have been appointed as a proxy holder, then you need to vote in order for such votes to be counted. If you wish to change your online will have the effect of revoking your previously submitted proxy. I also want to welcome those of the who are not registered shareholders or duly appointed proxy holders, and thank you for your interest in Avante Corp. I remind you that only registered shareholders and duly appointed proxy holders are entitled to participate in the meeting, to vote and ask questions. After my introductory remarks, we will proceed to the regular items of business, including the receipt of financial statements, appointment of auditors and election of directors. Shareholders will also be asked to approve an ordinary resolution ratifying the corporation's 10% rolling stock option plan. Before we proceed with meetings today, I would like to introduce the other directors and members of the management of Avante Corp. joined us online today. Raj Kapoor, Chief Financial Officer; and Rob DeFlece, Chief of Staff. In accordance with the bylaws of the corporation, I will preside as chair of this meeting. I hereby appoint, [ Brad Hayden ] Norton Rose Fulbright Canada to act as the Secretary of the meeting. I hereby appoint Rosa Garofalo of the TSX Trust Company to act as a scrutineer for the meeting. The notice of the meeting, together with the management information circular described the business of the meeting and the form of proxy or voting instruction form remain available to our shareholders of record as of September 15, 2025, to the procedures provided in CSA coordinated blanket order 51932 issued by the Canadian Securities Administrator and coordinated blank order 51932 issued by TSX Trust Securities Commission. In accordance with those orders, the proxy cutoff time was waived by the chair and votes were accepted by proxy up until October 20, 2025, at 5:00 p.m. Toronto time. A quorum of shareholder is present for the transaction of business at this meeting if at least 2 persons are present in person, each being a shareholder entitled to vote at the meeting or a duly appointed proxy holder or representative for a shareholder sole entitlement. I've received the preliminary scrutineers' report and it shows that there are two -- at least 2 shareholders present today in person or by proxy. Accordingly, we have a quorum present. I would ask that the Secretary file a copy of the scrutineer's report with the minutes of today's meeting. I would also note that under applicable corporate law, the corporation is permitted to hold this meeting by electronic means that we are using. With that said, I declare this meeting has been regularly called and properly constituted for the transaction business. To facilitate proceedings, I've asked Raj Kapoor and Rob DeFlece, who are also shareholders or duly appointed proxy holders to move and second all motions. I will call on them at the appropriate time. This is not intended in any way to curtail discussion. Each item of business we consider today requires that a majority of the votes in favor in order for the resolution to pass. TSX Trust, please open the polls now. The first item of business is the presentation of the audited consolidated financial statements of the corporation for the fiscal year ended March 31, 2025 and 2024, including the auditor's report thereon, as well as the unaudited condensed interim consolidated financial statements for the 3-month period ended June 30, 2025 and 2024. These items are available for inspection by shareholders at the corporaton's profile on SEDAR+. And I now place them before the shareholders. Are there any questions on the financial statements or the auditor's report on the annual financial statements?

No questions at this time.

Thank you. I declare that the audited consolidated financial statement of the corporation for the fiscal year ended March 31, 2025 and 2024 including the auditor's report thereon as well as the unaudited condensed interim consolidated financial statements for the 3-month period in any June 30, 2025 and 2024 have been presented and received. We will now move to the election of directors. The Board of Directors has fixed the number of directors to be elected at 5. The management information circular contains the names and background of the 5 individuals that have been nominated by the corporation for election being Dan Argiros, Wade Burton, Robert Klopot, Emmanuel Mounouchos and Bruce Bronfman. And I confirm that all nominees are eligible for election. The corporation did not receive any notice of any other director nominations in the connection with the meeting in accordance with its advanced notice bylaw or via shareholder proposal in accordance with the Business Corporation Act, Ontario accordingly. The only persons eligible to be nominated for election to the Board of Directors of the corporation are the management nominees. I now ask for a motion that each of these nominees be elected to serve as directors.

I move that each of the 5 persons nominated be elected as a Director of the Corporation to hold office until the next Annual General Meeting of Shareholders of the corporation or until their successor is duly elected or appointed unless their post is vacated earlier.

I second the motion.

We will now address any questions or comments from shareholders or proxy holders that are directly related to the election of the directors. Have any questions or comments come in?

So we have received a question from a shareholder, Mr. George Christopoulos. That's part of a package of questions that he has provided. So we will delay the answering those questions until the close of the formal business of the meeting.

Okay.

Thank you. The voting for election of directors is open, and we invite shareholders and duly appointed proxy holders to submit their votes for each nominee if they have not already done so. As I mentioned earlier, if you have already voted or sent in a proxy, there's no need to do anything unless you wish to change one or more vote. And if you have been appointed as a proxy holder, then you need to vote in order for such votes to be counted. [Voting]

The next item of business is the appointment of the auditor. I now ask for a motion on this matter.

I move that Deloitte LLP be appointed the auditor of the corporation to hold office until the next Annual Meeting of Shareholders of the corporation.

I second the motion.

We will now address any questions or comments from the shareholders or proxy holders that are directly related to the appointment of the auditor. Have any questions or comments come in?

Again, there is a question that relates to the appointment of the auditor. That will be delayed until prior to the close of business of the meeting as it is part of a package of questions from Mr. Christopoulos.

Thank you. We invite shareholders and duly appointed proxy holders to submit their vote if they have not already done so. As a reminder, if you have already voted or sent in a proxy, there is no need to do anything unless you wish to change your vote. And if you have been appointed as a proxy holder, then you need to vote in order for such votes to be counted. [Voting]

The next item of business is the approval of the stock option plan for the corporation. In accordance with the TSX Venture Exchange policy, the corporation's stock option plan must receive annual shareholder approval. There have been no changes made to the option plan since it was approved last year. I now ask for a motion on this matter.

I move that the ordinary resolution set out on Page 11 of the management information circular with respect to the approval of the stock option plan of the corporation be approved.

I second the motion.

We will now address any questions or comments from the shareholder or proxy that are directly related to the approval of the stock option plan. Have any questions or comments?

There have been questions that have come in. I think this would be the appropriate time to go through the questions before we close any voting on the matters that have come in from Mr. Christopoulos. Mr. Christopoulos is a registered shareholder and has asked questions at the meeting that have come in through the TSX Trust meeting platform. The questions are lengthy in nature, so I will go through them. I'm here with the Chair of the meeting. My name is Paul Fitzgerald. I'm counsel to Avante Corp. I'm a lawyer with [ Norton Rose Fullbright ]. And the Chair of the meeting has asked me to go through the questions that have been provided by Mr. Christopoulos. The very first question, a preliminary question that relates to matters before the meeting. Mr. Christopoulos notes that pursuant to subsection 100 sub-4 of the Ontario Business Corporations Act, shareholders have a right to examine the shareholder list. He indicates in his question that, my past e-mails to Avante Corp.'s CFO requesting an opportunity to review the shareholder list have gone unanswered. Since Avante has made it impossible for its shareholders to exercise their right to examine the list of shareholders at today's meeting, will Avante confirm that a shareholder list for today's meeting has been prepared and that it will be made available to any shareholder who visits its head office at 1959 Leslie Street Toronto during business hours and for greater certainty, including both this week and next week. On behalf of the Chair, the response is that a shareholders' list has been prepared, that a shareholders' request was not provided with respect to this particular meeting, but that list -- the shareholders' list will be available for review at the corporation's head office during regular business hours following this meeting. The next question relates to the presentation of financial statements. Mr. Christopoulos indicates that if they have not already done so, shareholders should read George Christopoulos' press release dated October 15, 2025. And his statement is, Avante's 2025 circular amended the amount of audit and accounting fees for 2024 from $355,863 to $684,409, which seems to represent an expense adjustment and an increase of $328,546 for 2024. For 2024, 100% bonuses were paid to each of the CEO and CFO of $375,000 and $200,000, respectively, for a total of $575,000. His questions are, did Avante consider the impact of the adjustment to the 2024 fees on the right of the CEO and CFO to the 2024 bonuses? And will a portion or all of the 2024 bonuses be repaid to Avante and the Chair has ruled that this question is not relevant to the actual financial statements themselves. The next question that Mr. Christopoulos has relates to the election of directors. He has indicated as his first of this question, a, I would like to discuss Avante's director nominees. His statement is, if they have not already done so, shareholders should read George Christopoulos' press release dated October 15, 2025, George Christopoulos will withhold in respect of all 5 nominees. All 5 nominees named in Avante's circular are representatives of Emmanuel Mounouchos and Fairfax. No other shareholder has Board representation despite Avante's ability to deliver even a reasonable quantum of profit. And while shareholders have been unreasonably diluted by excessive stock options and other even more significant equity-based compensation unless any of the 5 during the course of directors' meetings, all 5 have been comped shareholders their fundamental rights to know the detailed voting results of the meeting of shareholders, which was withheld for both 2023 and 2024. Any of the 5 has objected during the course of directors' meetings, all 5 have been complicit in respect of the unfair excessive compensation of the CEO and CFO. And unless any of the 5 is objected during the course of directors' meetings, all 5 have been complicit in denying Avante's shareholders there right to an in-person annual meeting. Shareholders were promised an in-person annual meeting a year ago, yet here we are virtually again for the sixth consecutive year. That's the end of statement A. I note there is no question with that. Statement B, I would like to discuss the 3 director nominations as provided for by Paragraph 99 1B of the Ontario Business Corporations Act. And his statement is, if they have not already done so, shareholders should read George Christopoulos' press release dated October 15, 2025. He then goes on to list 3 directors for discussions. The 3 directors, I would note are the same as what were proposed last year by Mr. Christopoulos. There is no question that relates to the election of directors, and I note that any nominations from the floor would not be available if they do not meet the requirements for advanced bylaws and did not fall within the purview of the reported shareholder proposal, which was not received on a timely basis from Mr. Christopoulos. His third question relates to the appointment of auditors and his discussion is, if they have not already done so, shareholders should read George Christopoulos' press release dated October 15, 2025. George Christopoulos will withhold in respect of the auditor. And his statement is, overall, Avante's business shrank incredibly following the sale of Logixx Security Inc. For fiscal year ended March 2021, revenues were $9 million and its audit and accounting fees were $351,350 or 0.38% of revenue. Since the shrinking of Avante and the replacement of Avante's entire Board of Directors since March 30, 2022, and the reappointment of Emmanuel Mounouchos as CEO, relatively speaking, Avante's audit and accounting fees absorbed. I note that there is not a particular question that relates to the appointment of auditors. The fourth question relates to the ratification of the stock option plan. And Mr. Christopoulos' discussion indicates if they have not already done so, shareholders should read George Christopoulos' press release dated October 15, 2025. George Christopoulos will vote against in respect of the stock option plan. And he indicates since March 30, 2022, a total of 1,650,000 options have been awarded to Avante's CEO, CFO and its directors. Over and above the 1,650,000 options, there has been an unconscable quantum of other equity-based compensation, which he then lists out in our compensation -- executive compensation disclosure in the circular. But I do note that there is no particular question that relates to this statement. Mr. Chair, that's the close of the questions that have been made available.

Thank you. We invite shareholders and duly appointed proxy holders to submit their vote if they have already done so. [Voting]

As we have now all business items on the agenda, I declare voting on all matters closed. I understand the scrutineer has preliminary tabulation in respect of each of the items of business for the meeting. The preliminary results with respect to the election of the directors are that a majority of the votes cast voted in favor of each of the 5 nominees named in the management information circular. As a result, I declare that Daniel Argiros, Wade Burton, Robert Klopot, Emmanuel Mounouchos and Bruce Bronfman have been duly elected as directors of the corporation. The preliminary results the appointment of the auditors is a majority of the votes cast at the meeting were voted in favor of the appointment of Deloitte LLP. As a result, I declare that Deloitte LLP has been duly appointed auditors of the corporation. On the resolution to approve the stock option plan, a majority of the votes cast at the meeting were voted in favor of the resolution. As a result, I declare that the resolution approving the stock option plan has been passed. The meeting has concluded. On behalf of the corporation, I'd like to thank you for participating in this meeting and your ongoing commitment. I wish all the best to you and your families that you stay safe and healthy. Thank you.

Ladies and gentlemen, thank you for attending today's meeting. You may now disconnect.