MediPharm Labs Corp. (LABS) Earnings Call Transcript & Summary

Welcome to the 2023 Annual Meeting of Shareholders of MediPharm Labs Corp. Please note that the meeting is being recorded. I would like to introduce Keith Strachan, Chair of today's meeting. Mr. Strachan, the floor is yours.

Good morning. It's now 11 a.m. My name is Keith Strachan, President of MediPharm Labs. I will act as Chair of today's meeting. On behalf of the Board and management of whom David Pidduck, Chief Executive Officer; Greg Hunter, Chief Financial Officer; and Geoff Marr, General Counsel, are in attendance today. I welcome you to the Annual Meeting of Shareholders of MediPharm Labs Corp. We are pleased to host the meeting through this virtual platform, accessible to all of our shareholders regardless of physical location. Following the formal portion of today's meeting, management will be making closing remarks. As this meeting is being held online via webcast, it is appropriate to set out a few guidelines for online participants for the orderly conduct of this meeting. Questions can only be submitted by registered shareholders and duly appointed proxy holders entitled to attend and vote at the meeting. Questions may be submitted by selecting the Ask a Question button on the left side of your screen. Questions in respect of motion, if any, will be addressed prior to the close of voting. Questions with respect to MediPharm Labs generally will be answered after the completion of management's closing remarks following formal business. For the purposes of today's meeting, voting on all matters will be conducted by online ballot through the facilities of this webcast. If you are a registered shareholder or a duly appointed proxy holder, who has logged in with a valid control number, you will be able to vote at today's meeting. With respect to voting, once polls are announced open, please click on the voting button on the left side of your screen to cast your votes. You will only have a certain amount of time to do so when the polls are open. If you have already voted by proxy or voting instruction form prior to the proxy cut-off time, there is no need to vote again unless you want to change your vote. By voting again, you will be revoking your previous vote. I would now like to call the meeting to order. With the consent of the meeting, I hereby appoint Geoff Marr, General Counsel, to act as secretary of the meeting; and Lori Winchester of TSX Trust Company to act as scrutineer of the meeting. The notice calling this meeting was delivered to all shareholders of the record as of close of business on May 3, 2023, being the record date for this meeting, I have received proof of service of such notice and ask that a copy of the notice of proof of service be annexed to the minutes of this meeting as a schedule. As a reminder, only registered shareholders who hold shares in their name as of the record date or validity of appointed proxy holders are entitled to vote at this meeting. I have been advised by the scrutineer that a quorum of shareholders for transaction of business is present. The scrutineers' report on attendance will be provided to the secretary of the meeting and incorporated in the minutes. I now declare that the meeting is regularly called and properly constituted for the transaction of business. We will now commence the formal matters of business of the meeting. The business of the meeting is described in the company's management information circular dated May 19, 2023, which accompanied the notice of meeting and is available on SEDAR. The notice, management information circular and the form of proxy relating to this meeting, were mailed to shareholders in accordance with applicable law. The company has received a statutory declaration from the TSX Trust Company, which I ask the secretary to append to the minutes of this meeting. May I have a motion to dispense with the reading of the notice of the meeting and take the notice as read?

I move that the reading of the notice of meeting be dispensed with and that the notice be taken as read.

I second motion.

I declare the motion carried. We will conduct voting on the matters before us by poll. On a poll, every shareholder as of the record date entitled to vote on the matter has 1 vote in respect to each share entitled to be voted on the matter and held by that shareholder. The poll will be opened for all resolutions at the same time. I now instruct the scrutineer to open the polls. This will allow you to choose to vote on each resolution immediately or wait until the conclusion of discussion on all resolutions prior to casting your vote. If you've already voted a proxy or voting instruction form prior to the proxy cut-off time, there is no need to vote again unless you want to change your vote. We will run through each of the items on the agenda in turn. Once discussion on all items of business have concluded, I will give you time to cast your votes and then declare voting closed on all resolutions. The results of the meeting will be publicly released and will be available on our website shortly following the meeting. The first item of business is tabling the audited financial statements of the company for the financial year ended December 31, 2022, and the auditor reports thereon, which are asked to be done. Shareholders are not required to approve the financial statements. You can obtain a copy of the financial statement and audit report on our website and on SEDAR. The next item of business is the election of directors. Only of the persons nominated in accordance with the procedures set out in the company's bylaws are eligible for election as directors. The management information circular of the company dated May 19, 2023, sets out the names of management's 5 nominees for election to the Board. No other nominations for election to the Board were duly received. Therefore, pursuant to the company's advanced notice bylaw, nominations from the floor of the meeting other than management's nominees will not be accepted. As set forth in the management information circular, the company has adopted a majority voting policy for directors, which provides that if a director receives more withheld -- if a director receives more withheld votes than 4 votes at a meeting, the director shall submit their resignation to the Board for consideration immediately following the meeting. The individuals nominated for -- the individuals nominated for election as directors are the following named nominees: Michael Bumby, Chris Halyk, Miriam McDonald, David Pidduck, Shelley Potts, and Chris Taves. I declare the nominations closed.

I move that each of the persons nominated for election as directors of the company be elected to hold office for the ensuing year or until their successors are elected or appointed.

I second the motion.

Are there any questions submitted from any registered shareholders or proxy holder? If there are no questions, please cast your votes. If you've already voted prior to the meeting, there is no need to vote again unless you want to change your vote. [Voting]

Thank you. The next item of business is the appointment of MNP LLP, the current auditor of the company as the auditor to hold office until the next Annual Meeting of Shareholders. May I have a motion?

I move that MNP LLP be appointed as auditor of the company to hold office until the close of the next Annual General Meeting of Shareholders and that the directors be authorized to fix the auditor's remuneration.

I second the motion.

Are there any questions submitted from any registered shareholder or proxy holder? If there are no questions, please cast your votes. If you've already voted prior to the meeting, there is no need to vote again unless you want to change your vote. Thank you. For those who have not voted on all the resolutions placed before this meeting, please do so now as the polls on the resolutions will close momentarily. [Voting]

The polls are now closed. Based on the proxies received and votes cast at the meeting, I declare that approximately 20.77% of the issued and outstanding common shares were voted in the election of directors. Pursuant to the company's majority voting policy, greater than 50% of the votes were cast in favor of each of management's nominees. As such, I declare that each nominee for election as director is elected as a director of MediPharm Labs Corp. to hold office for the ensuing year or until his or her successor is elected or appointed. And I declare that each other motion is carried and resolutions passed. This concludes the formal business portion of the meeting. Unless there are any questions from the floor, may have a motion for the termination of the business portion of the meeting?

I move that the meeting be terminated.

I second the motion.

I declare this meeting be terminated. We will now move on to management's closing remarks by David Pidduck, our Chief Executive Officer.

Thanks, Keith. Thanks to everyone for attending today. A few brief comments before we wrap. I have had the privilege of leading the MediPharm Labs team for over a year now and I am proud of the progress we have made on the road to profitability, a goal that still requires focused execution. MediPharm is on track with all the cost savings initiatives that we targeted as part of the VIVO integration. While the industry challenges are significant, we continue to enjoy a strong balance sheet with minimal debt, cash on hand and full ownership of all of our core assets. We continue to manage cash very carefully and are exploring opportunities to sell various parcels of unused land to generate further cash. We continue to focus on long-term opportunities in the pharma and wellness space. An example of this is our recent expansion of our relationship with Avicanna cannabis to include the further development and manufacturing of their advanced self-emulsifying drug delivery systems technology capsules for the Canadian and international markets. We continue to develop the international markets where our GMP standards and pharma level approach to quality are becoming core requirements to conduct business in many markets. We believe the current industry challenges could present favorable M&A opportunities, especially for companies with strong balance sheets. We look forward to sharing our Q2 results in August. I hope you all enjoy the summer. Take care.

Thank you for attending today's meeting. You may now disconnect.