Kane Biotech Inc. (KNE) Earnings Call Transcript & Summary

Good afternoon and welcome to the Kane Biotech Inc. Annual and Special Meeting of Shareholders. The meeting will now come to order. My name is Mark Nawacki, Chair of the Corporation. This is the annual and special meeting of the shareholders of Kane Biotech Inc. Pursuant to the bylaws of the corporation, I will act as Chair of the meeting, and Ray Dupuis will act as secretary of the meeting. I appoint Kristine Calesso of AST Trust Company as scrutineer. The notice calling this meeting of shareholders was mailed to all the shareholders of record on April 21, 2021. The secretary will annex the declaration as to such mailing to the minutes of the meeting. Will the scrutineer please submit the report on attendance? The scrutineer's report is as follows that report. Kristine, I don't think I have that report.

Kristine, unmute it as we can't hear you. There we go.

All right. Yes, I just realized that. The scrutineer's report shows that there is a total of 22 shareholders voted in person or by proxy, holding approximately 50,895,014 shares or representing 46.43 of the issued and outstanding common shares.

Thank you, Kristine. I hereby adopt the scrutineer's report. Notice having been mailed in accordance with the bylaws and applicable policies and a quorum being present, I declare that this meeting is duly constituted for the transaction of business. The first item of business is to review and discuss the audited financial statements of the corporation for the year ended December 31, 2020, together with the auditor's report thereon, which have been approved by the directors of the corporation. The secretary will please read the auditor's report.

The following are excerpts of the independent auditor's report from MNP LLP dated March 24, 2021, to the shareholders of Kane Biotech Inc. We have audited the consolidated financial statements of Kane Biotech Inc. and its subsidiary, which comprised of consolidated statements of financial position as at December 31, 2020, and December 31, 2019, and the consolidated statements of loss and comprehensive loss, changes in equity, deficit and cash flows for the years then ended and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly in all material respects the consolidated financial position of the company as at December 31, 2020, and December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with international financial reporting standards. We conducted our audits in accordance with generally accepted auditing standards. And we are independent of the company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Thank you, Ray. Is there any discussion with respect to the financial statements? If not, we'll proceed to the next item of business, which is the election of directors. The bylaws of the corporation provide that the number of directors shall be fixed by the directors of the corporation. The directors of the corporation have fixed the number of directors at 6. The meeting is now open for nomination. I nominate the following as directors: Marc Edwards, Allan Mandelzys, Georges Morin, Mark Nawacki, Sarah Prichard, Philip Renaud. Are there any more nominations? If there are no further nominations, will someone move that the nominations be closed?

I move that the nominations be closed.

Do I have a seconder?

I second that.

Thank you. You have heard the motion by Philip Renaud and seconded by Marc Edwards. All those in favor, please signify by raising your right hand. [Voting]

Any contrary? [Voting]

Carried. I now declare Marc Edwards, Allan Mandelzys, Georges Morin, Mark Nawacki, Sarah Prichard, Philip Renaud elected directors of the corporation to hold office until they resign or until their successors are duly elected or appointed. It is now in order to appoint the auditors of the corporation. We have resolved that MNP LLP Chartered Accountants of Winnipeg, Manitoba be appointed auditors of the corporation to hold office until the next annual meeting or until their successors are duly appointed and the Board of Directors be authorized to fix the auditor's remuneration. Do I have a seconder for that motion?

I will second. Yes.

You have heard the motion by Mark Nawacki. And the second by -- was that Ray Dupuis? Or was that Marc Edwards?

Sorry, Marc Edwards. I apologize. I'll second. I apologize.

All those in favor, please signify in the usual manner. [Voting]

Any contrary? [Voting]

Carried. I declare MNP LLP appointed as auditors of the corporation. Motion 3, dealing with the approval of performance and restricted share unit plan, or PRSU plan. The Board of Directors approved the PRSU plan on April 21, 2021, subject to approval by the TSX Venture Exchange, the exchange, and the shareholders of the corporation. The exchange gave its conditional approval for the PRSU plan on March 30, 2021. The purpose of the PRSU plan is to encourage equity participation in the corporation by its directors and certain key officers, employees and consultants through the acquisition by such persons of common shares of the corporation, common shares. The PRSU plan provides for the issuance of restricted share units, RSUs, and performance share units, PSUs, to employees, consultants, officers or directors of the corporation and its subsidiaries, the participants. The Board of Directors intends to use RSUs and PSUs to be issued under the PRSU plan as well as stock options to be issued under the auction plan as part of the corporation's overall compensation strategy and to assist the corporation in attracting and retaining talented individuals. The number of common shares that may be reserved for issuance pursuant to awards granted under the PRSU plan shall not exceed 10% of the total common shares issued and outstanding as of the date of the meeting. PRSU plan participants are designated by the Board of Directors at its sole discretion. Participants are eligible to receive RSUs and PSUs other than directors pursuant to the PRSU plan. Persons retained primarily to conduct investor relations activities are not eligible to participate in the PRSU plan. If approval of the PRSU plan or a modified version thereof is not obtained by the approval of disinterested shareholders of the corporation, the corporation will not proceed to grant RSUs and/or PSUs under the PRSU plan. A disinterested shareholder of the cooperation excludes any person or an associate or affiliate, as those terms are defined by exchange policies of that person, who is an insider, as defined by the exchange policies, to whom share-based compensation may be granted under the PRSU plan. As of the date hereof, 30,896,257 common shares are ineligible to vote as disinterested shareholders of the corporation on the resolution.

I move that. I move that in.

Please continue, Philip.

Oh. We resolve as an ordinary resolution of the disinterested shareholders of Kane Biotech Inc. that the corporation's performance and restricted shares plan, the PRSU plan, as described in the corporation's information circular dated April 21, 2021, including the reservation of insurance under the PRSU plan, at any time 10% of the issued and outstanding common shares of corporation to the day of approval of the PRSU plan by the shareholders be and is hereby ratified, confirmed and approved subject to the acceptance of the PRSU plan by the TSX Venture Exchange, the exchange. The Board of Directors of the corporation will be authorized in its absolute direction to manage the PRSU plan and amend and modify the PRUS (sic) [ PRSU ] plan in accordance with the terms and conditions of the exchange. And any one director or officer of the corporation and -- is hereby authorized and directed to do all such acts and things and to execute and deliver under the corporate seal of the corporation or otherwise such [ sheets ], documents, instruments and assurances that, in his opinion, may be necessary or desirable to give effect to the foregoing resolutions, including, without limitation, making any changes to the PRSU plan required by the exchange or applicable securities regulatory authorities and to complete all transactions in connection with the administration of the PRSU plan.

Do I have a seconder for that motion?

I will second the motion.