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

Welcome to the 2025 Annual and Special Meeting of Shareholders of MediPharm Labs Corp. Please note that the meeting is being recorded. I would like to introduce Chris Halyk, Chair of today's meeting. Chris Halyk, the floor is yours. Good afternoon. It is now 3:21 pm. My name is Chris Halyk. I will act as Chair of today's meeting. On behalf of the Board and management of whom David Pidduck, Chief Executive Officer; and Greg Hunter, Chief Financial Officer, are also in attendance today. I am pleased to welcome you to the Annual and Special Meeting of Shareholders of MediPharm Labs Corporation. On behalf of MediPharm, I apologize for the delay in the start of this meeting. We are pleased to host the meeting through the virtual meeting platform, accessible to all our shareholders regardless of physical location. As this meeting is being held online via live webcast, it is appropriate to set out a few guidelines for online participants, for the orderly conduct of this meeting. First, 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 going to the messaging tab and submitting your question. Questions are moderated during the meeting pertaining to the poll at hand. Second, for the purposes of the meeting today, voting on all matters will be conducted by online ballot through the facilities of this webcast. Third, 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. We will conduct the voting by a virtual poll. The voting tab will automatically open when I announce that the votes are open. Each registered shareholder or a duly appointed proxy holder will be able to select either for or against or withhold, as applicable in order to vote. Every eligible shareholder or duly appointed proxy holder has 1 vote per share that can be voted on each matter. The poll on the special resolution setting the number of directors at 7 will be opened first and will be closed directly after consideration of that item of business in order to determine the number of nominees to be elected as directors at today's meeting. For the remaining items of business, the polls will be opened at the same time and you can choose to vote on each resolution immediately or wait until discussions conclude on each of the remaining resolutions prior to casting your vote. Following discussion of each item, you will have additional time to enter your vote before the voting is declared closed for all remaining resolutions. Fourth, if you have already voted by depositing a proxy or voting instruction form prior to the proxy cutoff 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 Melanie Cole of Aird & Berlis LLP 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 record as of the close of business on May 1, 2025, being the record date for this meeting. I have received proof of service of such notice and ask that a copy of the notice and proof of service be annexed to the minutes of this meeting as a schedule. As a reminder, only registered shareholders who held common shares in their name as of the record date or their validly 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 scrutineer's report on attendance will be provided to the Secretary of the meeting and incorporate it into the minutes. I now declare that the meeting is regularly called and properly constituted for the transaction of business. We will now commence with the formal business of the meeting. The business of the meeting is described in the company's management information circular dated May 11, 2025, which accompanied the notice of meeting and is available on SEDAR as supplemented on June 6, 2025. The company has received confirmation of mailing from TSX Trust Company, which I ask the secretary to append to the minutes of the meeting. May I have a motion to dispense with the reading of the notice of this meeting and to 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 the motion.

I declare the motion carried. We will conduct voting on the matters before us by a poll. On a poll, every shareholder as of the record date entitled to vote on the matter has 1 vote in respect of each share entitled to be voted on the matter and held by that shareholder. If you have already voted by depositing a proxy or voting instruction form prior to the proxy cutoff, 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. The poll on the special resolution setting the number of directors at 7 will be opened first and will be closed directly after consideration of that item of business in order to determine the number of nominees to be elected as directors at today's meeting. For the remaining items of business, the polls will be opened at the same time, and you can choose to vote on each resolution immediately or wait until discussions conclude on each of the remaining resolutions prior to casting your votes. Following discussion of each item, you will have additional time to enter your vote before the voting is declared closed for all remaining resolutions. The results of the meeting will be publicly released following the meeting. The first item of business is the tabling of the audited financial statements of the company for the financial year ended December 31, 2024, and the auditor's report thereon, which I have asked to be done. Shareholders are not required to approve the financial statements. You can obtain a copy of the financial statements and auditor's report on our website and on SEDAR. The next item of business is the special resolution setting the number of directors of the company at 7. The company currently has 6 directors. In order to be effective, the special resolution fixing the number of directors must be approved by not less than [ 66 -- 2/3% ] of the votes cast by shareholders present in person or represented by proxy that are entitled to vote at the meeting. May I have a motion?

I move to fix the number of directors of the company at 7.

I second the motion.

Are there any questions submitted from any registered shareholder or proxy holder related to this motion? If there are no questions, I now instruct the scrutineer to open the poll on this motion. Please cast your votes. If you already voted prior to the meeting, there is no need to vote again unless you want to change your vote. [Voting]

Thank you. We will now take a pause to tabulate the results on this motion. [Break]

Thank you very much, all shareholders. We are still going to take a break for another 10 minutes. Thank you. [Break]

Once again, apologies for the delay. The meeting will now resume. Based on the proxies received and votes cast at the meeting, I declare that the special resolution to fix the number of directors at 7 has passed by the requisite majority. The next item of business is the appointment of MNP LLP, the current auditor of the company, as auditor to hold office until the next Annual Meeting of Shareholders and to authorize the directors to fix the auditor's remuneration. 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 relating to this motion? If there are no questions, please cast your votes. If you already voted prior to the meeting, there is no need to vote again unless you want to change your vote. [Voting]

Okay. The next item of business is the proposed approval of the unallocated awards available under the company's equity incentive plan. As more fully described in the company's management information circular dated May 11, 2025, as supplemented. If approved, such approval of the unallocated awards available under the equity incentive plan will be effective for 3 years from today's date. The full text of the resolution being placed before the meeting for approval of the unallocated awards under the equity incentive plan is set out on Page 33 of the circular. An affirmative vote of a majority of the votes cast at the meeting will be sufficient to pass the resolution approving the unallocated awards under the equity incentive plan.

I move that the resolution approving the unallocated awards under the equity incentive plan as set out in the text of the circular be approved.

I second the motion.

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

Thank you. We will now take a pause to tabulate the results on these motions. [Break]

Thank you. We now have the report of the scrutineer. And as such, the meeting shall now resume. Based on the proxies received and votes cast at the meeting, I declare that the resolution to appoint the auditor and authorize the directors to fix the auditor's remuneration has by the requisite -- has passed by the requisite majority. And the resolution to approve all unallocated awards under MediPharm's equity incentive plan approval of the unallocated awards available under the company's equity incentive plan has passed by the requisite majority. Next, we will move to the election of directors. Before we do that, we will take a brief break. [Break]

Thank you. The next item of business is the election of directors. Only 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 11, 2025, sets out the names of management's 7 nominees for election to the Board. Pursuant to the company's advance notice bylaw, unless the notice was previously received in accordance with the company's bylaws, no additional nominees from the floor of the meeting other than for management's nominees will be accepted. On May 1, 2025, a notice pursuant to Section 4.4 of the company's bylaws was submitted to the company from Apollo Technology Capital Corporation, a holder of approximately 3% of the company's issued and outstanding common shares of its intention to nominate 6 directors at this meeting. As requested by counsel to Apollo Technology Capital Croporation. We will ask management to nominate these 6 individuals for consideration by shareholders. The individuals nominated for election as directors by management are the following named nominees: Chris Halyk, Shelley Potts, Chris Taves, David Pidduck, Keith Strachan, Emily Jameson, John Medland.

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

I second the motion.

In accordance with the company's bylaws, we also ask for a motion to nominate the 6 directors as set out in the amended and restated dissident proxy circular dated May 15, 2025, as amended and supplemented, prepared by Apollo Technology Corporation. After this motion is passed, there will be 13 candidates on the ballot for directors of the company.

In accordance with the company's bylaws, I move that each of John Fowler, Alan D. Lewis, David Lontini, Demetrios Mallios, Regan McGee and Scott Walters, be elected to hold office for the ensuing year or until their successors are elected or appointed.

I second the motion.

There are now 13 candidates on the ballot for directors of the company. As the special resolution fixing the number of directors at 7 past the number of directors to be elected at the meeting is 7. And therefore, the 7 nominees with the highest percentage of votes for will be elected as directors at the meeting as disclosed in the management information circular. Are there any questions submitted from any registered shareholder or proxy holder related to the motions to elect directors? There are no questions, I announce the scrutineer to open the remainder of the polls. This will allow you to choose to vote on each resolution immediately or wait until conclusion of any discussions on all resolutions prior to casting your vote. The current vote relates to the directors to be voted to the company. For the election, please select up to 7 nominees and click the Send button to cast your vote. If you have already voted prior to the meeting, there is no need to vote again unless you want to change your vote. [Voting]

Thank you. We will now take a pause to tabulate the results on this motion. Before voting on this issue, I would like to summarize what has occurred to date for the benefit of all shareholders. On June 13, 2025, Apollo sent a letter to me and MediPharm asking for 3 things: First, that I disqualified proxies in favor of MediPharm's slate of director candidates because of alleged violations of securities law instrument, National Instrument NI 54-101. In summary, Apollo alleges that MediPharm's proxies are invalid and should be disqualified by me because MediPharm breached sections 2.7.1 of NI 54-101 when it included a letter from the Board's Chairman with the meeting material that was mailed to shareholders. Apollo also alleges that this letter was misleading. Apollo alleges that these issues cannot be cured. Second, that I adjourn the meeting if I do not rule that the MediPharm proxies are invalid. Third, that if the meeting is adjourned, Apollo will be reimbursed for its cost to date, which should be between $3 million to $3.5 million. On June 15, 2025, MediPharm responded to Apollo's allegations and position. I play no role in this response. In sum, MediPharm did not dispute that the Chair letter should not have been included in the proxy materials mailed to shareholders. However, MediPharm said that the issue was remedied by corrective disclosure on June 6, 2025, which directed shareholders to, a, disregard the letter if received without a mailed circular; and b, explain how proxies may be revoked if they had already been voted in favor of MediPharm's proposed directors. MediPharm also argued that Apollo could have raised this issue earlier, including in the recent litigation. MediPharm also said I did not have jurisdiction to unilaterally adjourn the meeting. On June 15, 2025, Apollo submitted a reply. Apollo reemphasized that the securities law issue could not be cured and argued that MediPharm acted in this manner to obtain an advantage in the proxy contest. On June 16, 2025, after considering relevant principles and discussing these issues with my independent counsel, I sent a letter to MediPharm and Apollo, outlining my preliminary reasons on these issues. A copy of those reasons will be attached to the final minutes of this meeting. However, I wish to summarize my views for the benefit of all shareholders. I will deal first with Apollo's request to exclude MediPharm's proxies. I base my decision on 3 questions. First, was there a misrepresentation to shareholders? In my view, there was not. While the letter contains opinions of the Chairman and other members of the Board, it directs shareholders to review the entire management proxy and also mentions the dissident proxy Further, the voting instruction form that was sent to shareholders expressly references the management proxy circular several times I believe that a reasonable shareholder reading only the voting instructions form would know that they are only getting management's recommendations and that they want to know about the dissident's perspective they need to look further. With that said, I am not a securities lawyer and made no finding about whether or not there was any breach of securities law. I simply explained that based on the evidence before me, it is not plain to me that there was a misrepresentation. Second, was there a correction of any disclosure issues in advance of the meeting? In my view, there was, I believe that MediPharm addressed the oversight in a timely manner after it became aware of the issue from Apollo. Specifically, on June 6, 2025, MediPharm issued a supplemental management proxy circular advising shareholders to disregard the letter, if received without a mailed circular and importantly, how proxies may be revoked if they had already voted in favor of MediPharm's proposed directors. Third, whether shareholders have had an opportunity to revoke or amend their proxy voting instructions. I have also considered that shareholders had from June 6 until June 13 to revoke or amend their proxies. If they were so inclined to do so, in my view, shareholders were able to do so in advance of the meeting's proxy filing deadline of June 13. In sum, I decided preliminarily that I will not invalidate MediPharm's proxies. Second, on the Apollo's request to adjourn the meeting, I concluded that I, as Chairman, do not have the power to adjourn the meeting without the consent of the shareholders at the meeting. I also do not see why an adjournment is appropriate here. Apollo can challenge my determinations concerning the Chairman's letter after the meeting. Third, I do not have the jurisdiction to award cost to Apollo. This is an issue the Board should deliberate and decide on exercising their business judgment and informed by the best interest of MediPharm. In the letter, I emphasize that my conclusions were preliminary. I said if anything new was raised that I would reconsider my views. I therefore remain open to hearing new facts or positions on the issue, including any other interested shareholders. With this background and summary, I will now ask registered shareholders or duly appointed proxy holders if they have any questions or comments on the matter. Since there are no questions, we will now go to vote for the directors. [Voting]

We will now take a pause to tabulate the results of these -- most of these votes. Thank you. We now have the report of the scrutineer and as such, the meeting shall now resume. Based on the proxies received and votes cast at the meeting, I declare that on the matter of the election of directors as the resolution fixing the number of directors to be elected at 7 was passed. The following 7 individuals having received the highest percentage of votes for have been elected as directors of MediPharm Labs to hold office for the ensuing year or until his or her successor is elected or appointed. Chris Halyk, Shelley Potts, Chris Taves, David Pidduck, Keith Strachan, Emily Jameson, John Medland. This concludes the formal business portion of the meeting. May I have a motion for termination of the meeting.

I move that the meeting be terminated.

I second the motion. I declare this meeting is terminated.

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