Zomedica Corp. (ZOMDF) Earnings Call Transcript & Summary

Mr. Chairman, my name is Stephanie Morley, and I am a shareholder. I second the motion.

Thank you. The next item of business of the meeting is to approve an amendment of the articles of the corporation to allow for meetings of shareholders to be held outside of Alberta. This amendment will provide the directors with the authority to determine to hold meetings of shareholders outside Alberta and to determine the place of any such meeting. The wording of the proposed amendment also refers to the authority of Directors in relation to the holding of meetings within Alberta, which has been included for clarity. However, under the corporation's bylaws, the Directors already have that authority. The rationale behind the proposed amendment of the articles to allow shareholder meetings to be held outside of Alberta has been provided in the proxy circular, together with the text of the special resolution to be considered by shareholders. May I please have a motion?

Mr. Chairman, my name is Bruk Herbst, and I am a shareholder. I move that the shareholders approve a special resolution with respect to the amendment of the articles to allow shareholder meetings to be held at any place within or outside Alberta as determined by the directors from time to time, the text of which is set forth in the proxy circular under item 7 of the matters to be acted upon on page 34 of the proxy circular.

Mr. Chairman, my name is Stephanie Morley, and I am a shareholder. I second the motion.

Thank you. The next item of business of the meeting is to approve an amendment to the articles of the corporation to change the name of the corporation to Zomedica Corp. The rationale for the name change has been provided in the proxy circular, together with the text of the special resolution to be considered by shareholders. If approved, the name change will become effective at the discretion of and on the date determined by the Board. May I please have a motion?

Mr. Chairman, my name is Bruk Herbst, and I am a shareholder. I move that the shareholders approve a special resolution with respect to the amendment of the articles to change the name of the corporation to Zomedica Corp., the text of which is set forth in the proxy circular under item 8 of the matters to be acted upon on page 35 of the proxy circular.

Mr. Chairman, my name is Stephanie Morley, and I'm a shareholder. I second the motion.

Thank you. The next item of business of the meeting is to ratify and confirm amendments to the corporation's bylaws in the form of the bylaw amendments. The bylaw amendments were adopted by the Board pursuant to a written resolution dated August 6, 2020. In accordance with the corporation's incorporating statute, the bylaw amendments are currently effective, and the Board is required to submit the bylaw amendments to the shareholders at this meeting, where the shareholders made by ordinary resolution confirm, reject or amend the bylaw amendments. If the shareholders confirm the bylaw amendments, they will continue to enforce an effect after the meeting. If the shareholders do not confirm the bylaw amendments, it will cease to be effective after the meeting. A summary of the bylaw amendments, together with a black line version indicating changes from the previous bylaws has been provided in the proxy circular, together with the text of the ordinary resolution to be approved by shareholders. May I please have a motion?

Mr. Chairman, my name is Bruk Herbst, and I am a shareholder. I move that the shareholders approve an ordinary resolution to ratify and confirm the amendment of the corporation's bylaws in the form of amended and restated bylaw number 1 second version, the text of which is set forth in the proxy circular under item 9 of the matters to be acted upon on page 37 of the proxy circular.

Mr. Chairman, my name is Stephanie Morley, and I'm a shareholder. I second the motion.

Thank you. And we now know without a doubt that Bruk and Stephanie are the shareholders. That's good. That concludes the placement before the meeting of all of the resolutions. Are there any questions or comments on the foregoing items of business? I'll pause now for a few moments to see if any questions come in. I'm still pausing it on. We'll note for all those listening, when I pause, there's no music, there's no other sound, but we're still here. All right. I have seen no comments come in. The polls still are open. For those of you who have not voted on all the resolutions, please do so now. I will pause for another minute to allow you to complete your voting. [Voting]

Now that everyone has had the opportunity to vote, I declare the polls closed for the 2020 Annual and Special Virtual-Only Meeting of Shareholders of Zomedica. I have been provided with the scrutineer's report with respect to the voting on each of the items of business. Based on the scrutineer's report, I declare that all 6 nominated directors have been duly elected as directors. MNP LLP has been duly appointed as auditors for the upcoming year. The special resolution to approve the consolidation has been defeated. The special resolution to approve the stated capital reduction has been passed. The special resolution to approve the amendment of the articles to remove the lean-on shares has been passed. The special resolution to approve the amendment of the articles to allow shareholder meetings outside of Alberta has been passed. The special resolution to approve the name change has been passed. And the ordinary resolution ratifying and confirming the bylaw amendments has been passed. The exact number of votes cast in relation to each of these resolutions will be filed on Zomedica's profile on EDGAR and SEDAR. As there is no further business to be brought before the meeting at this time, I declare the formal business part of the meeting to be terminated. Thank you for participating in our first virtual-only meeting. At this time, we will proceed with our corporate presentation. I will be joined by Ann Cotter, Interim Chief Financial Officer; Stephanie Morley, President and Chief Medical Officer; and Bruk Herbst, Chief Commercial Officer, all of the corporation. [Operator Instructions] I will admit, this is the first virtual meeting I've ever run. I am used to looking forward greatly to annual meetings because I get to meet all sorts of shareholders that I would not otherwise. I -- it's a bit unfortunate that we need to do this virtually, but it's the world we live in at the moment. And of course, I hope to meet many of you in the future. Before I start the corporation, I also would like to take this opportunity to publicly recognize the other folks on the phone with me: Stephanie, Bruk, Ann, for their extraordinary dedication to Zomedica and their dedication to advancing true form of the commercialization in the quickest and best way possible. You would be very happy to see the work they do on a daily basis and the passion that they bring to it. And for that, I'm deeply appreciative. As you know, by our public releases, by our press releases, we are very, very much focused within Zomedica on TRUFORMA. I am a firm believer that a pre-commercial company can have, as the name would suggest, only 1 first priority. And that priority for us is TRUFORMA. The vast majority of effort of each and every person who works for this company each day is dedicated to that. As you also know, everybody wants to know when TRUFORMA is going to be launched. And everybody would like it to be as quickly as possible. What, of course, people who are not involved with the company don't see is the product development process. And that process is something that is well recognized and has been done for other products by others for years and years and years. But the truth of the matter is to do it right, and we are intent on doing it right. It does take time. As you know, TRUFORMA and each of the assays for TRUFORMA, of which we hope to have 5 when we launch commercially, first go through verification then validation then beta testing. The reason we do this is not to spend an inordinate amount of time or too much time on testing. We do this because when we ultimately commercially launch this product, we want it to be 100% right. We want it to be good for our customers, good for the patients they treat. We don't basically want to use customers as guinea pigs. We want to do all of our homework upfront. That is reputationally important. But most of all, when you think about it, our products are used to diagnose living creatures. And we do not take that responsibility lightly. And so we do all this testing for that reason. As you have also noticed, we have pulled guidance and providing no information at the moment on when our commercial release date is. And this is largely due to the COVID situation. COVID is an interesting impact, if you will, or lack of impact at times on Zomedica. We have seen it pop up and interfere with our partners, with some of our vendors. Now at times if, for example, you have a clinic and you're doing some testing on TRUFORMA, and there are a couple of people doing that testing, and they come down with COVID, obviously, the testing stops and is delayed. It doesn't impact the value of the product. It does not impact the quality of the ultimate result, but it does cause a time delay. One of the most exciting things that we've experienced over the last several months substantially in reaction to COVID but not completely, is that we have developed the capacity for a 100% remote virtual install of TRUFORMA in a veterinary clinic. And at the moment, we have 3 separate clinics doing validation work for us and the devices they have in their clinics have been installed without a stepping foot into those buildings. It has all been remotely. This, of course, is wonderful now because it does not delay our installation in these places, but also in the event that COVID still is a serious problem when we launch our product, we are able to launch this product, whether or not our sales representatives can walk in the door of these clinics. That, I think, is very important, and I commend the folks within Zomedica who have accomplished this. It is a substantial derisking, if you will, of the impact of COVID. Not completely, of course, because COVID has a way of popping up at the worst, the strangest and the most unpredictable times. But we are doing our best to anticipate those sorts of things and plan for them. Our commercial plan for obvious reasons seems to be of most interest to people. And we have substantially advanced with our thinking and our planning regarding how we intend to commercialize TRUFORMA. Our plans are for what I'll call a hybrid sales model. And by that, I mean, we are currently in discussions with some well-known and well-represented distributors in the veterinary medicine space. Distributors have many advantages, but 2 distinct advantages are the day you launch a product, they already have many, what I'll call, feet on the street, many salespeople in the field. And also, they have pre-existing relationships with the customers you want to approach. Now we also are -- I'll say, we're smart enough not to want to completely leave our fate in the hands of others. And so on top of the distribution model, in a ratio of 1 to 10 or 1 to 8, we intend to hire direct Zomedica sales employees and put these people in the field with our distributors, and they will act in several ways. They will act as support for the distributor sales reps. They will act as corporate account representatives. They will act as a direct contact between the customer and Zomedica. Any way they can help the distributor effort, that's what they'll be there to do. And the nice thing, too, human nature says, if our reps are working with the distributor reps, then hopefully, the distributor reps will pay a little more attention to our product than to others. And that's always good for us. On top of that, we also will add a very small but effective number of direct employees who are true, deep and wide veterinary medicine experts. And these are people who we have certain customers, let's say, some key opinion leaders, who really prefer not to talk to a salesperson. They want to have a peer-to-peer conversation. These are direct Zomedica employees, who will be able to have that peer-to-peer conversation and talk in great detail, not just about our product and our technology, but about veterinary medicine and the treatment of animals. And this is a very important thing in our field. A layer, even on top of that is, again, very small numbers in the beginning. But we will have a few completely direct sales reps. And by that, I mean, again, Zomedica employees who are in geographies where our distributor is not and who represent Zomedica independently of the distribution network. Now the advantage of having this 4-tier approach is that on a weekly basis, once we commercialize TRUFORMA, we will be following our activities in the field. And we will see week-by-week, month-by-month, which parts of this work best, which parts of this need improvement or change. And we, on the fly, can be making these changes and optimizing the distribution model. The nice thing also is there's an umbrella over this entire model, which is a thing called [ Mizone Medical ] which is our Internet platform. And that platform, first off, is where the veterinarian reads the results of their TRUFORMA test. But it also is the way that the vet can communicate directly with Zomedica, and we can communicate directly with the veterinary clinic virtually, a wonderful thing in any event, but a doubly wonderful thing during COVID when it may be a lot more difficult to be face-to-face with our customers. So these commercial plans are coming together. I know your question is, when are we going to launch the product? And believe me, it is the exact right question, and I would dearly love to give you an answer. But with the unpredictability of COVID, we are not providing that guidance at the moment. And we're not providing it for the obvious reason, and also one reason it may not be as obvious to you. And that is, when we say something to you, we want absolutely to the best of our ability to be able to follow through on it. It would be so easy for us to give you a commercial launch date, but unless we're absolutely sure we can hit it, which, of course, is impossible during COVID, we just don't want to put out news and then disappoint. I would much rather have you all be pleasantly surprised than disappointed. So I would hope that when we say something publicly, people as we go forward, can have the confidence that we are talking about something we already accomplished or if we are disclosing information about things that have not yet occurred, we are very confident. One never can be certain, but very confident that it will occur. That's the kind of company we want to run. So with that, I would like to open the floor to questions from any shareholders. And just so to know that the way this is handled is you are typing in your questions. And those questions are coming to Ann. And then she basically needs to send me those questions in an e-mail because of the way this platform works. Then I will read the question aloud. Either I will answer it or I will flip it to one of the people on the line, and the other folks on the line are, again, Ann Cotter, Stephanie Morley, Bruk Herbst and also -- sorry, I've just forgotten him. And [ Bruce McGrane ] who is our corporate attorney. Sorry, Bruce. And so if I flip it to one of them, I will identify them by name and then you will hear the answer from them. So now I will admit to having 2 pair of glasses. I will change glasses to see if questions have come in. Okay. What we are going to do is take a 10-minute recess so that I can make sure to get all the questions that have been asked. During that 10 minutes, there will be no sound on the line, no music or anything else of that sort. But once again, we are still here. The way you know that the meeting has recommenced from the recess is you will hear my voice, and we will begin to answer the questions. So it is now 9:03, we should be back, if not earlier, by 9:13. Thank you. [Break]

Okay. We are back a little earlier than expected. I report that we have no questions. Again, if you have questions later on, please feel free to e-mail me. I am perfectly happy to answer any questions that you have. They don't have to be at this meeting. I very much appreciate your interest in the company. If there are no further comments or questions, I see there or not, this concludes our meeting. Thank you for joining us today. As I say, I very much appreciate your ownership in Zomedica. Please stay safe and healthy. We now will conclude the meeting.

Thank you, sir. Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect. Have a pleasant day, and enjoy your weekend.