MediPharm is Dangerously Low On Cash and is On Track to Run Out of Money by November Unless Wholesale Change Occurs
MediPharm Lost Over $3.3 Million in Q1 2025 While Management Offered No Clear Plan to Achieve Profitability or Commitment to Reduce Waste or Excessive Spending
Apollo Capital Warns Shareholders Not to Be Misled by Management's Rosy Outlook: MediPharm has Reported 21 Consecutive Quarters of Losses, Yet CEO Pidduck Touted Adjusted EBITDA, a Cherry-Picked Figure That is Meaningless
Absent Significant Board Change, MediPharm Stock is On Its Way to Being Worthless! Apollo Capital's Nominees Bring the Turnaround Experience and Financial Discipline Required to Stop the Bleeding, Restore Fiscal Integrity, and Deliver Performance at MediPharm
Calls Upon MediPharm Shareholders to Support Change by Electing John Fowler, Alan D. Lewis, David Lontini, Demetrios Mallios, Regan McGee, and Scott Walters
Urges MediPharm Shareholders to Discard Any "GREEN" Proxy Card From Company
TORONTO, May 16, 2025 /PRNewswire/ -- Apollo Technology Capital Corporation ("Apollo Capital"), one of the largest shareholders of MediPharm Labs Corp. (TSX: LABS) (OTCQB: MEDIF) (FSE: MLZ) ("MediPharm" or the "Company"), owning approximately 3.0% of the Company's common stock, today commented on MediPharm's first quarter 2025 financial results, reported earlier this week, which reinforce the urgent need for board-level change to reverse the Company's rapidly deteriorating financial position.
Apollo Technology Capital Corporation
Apollo Capital believes that shareholders cannot afford to delay action any longer. Based on current cash burn rates, the Company will run out of money by November 2025, turning your 99% loss into 100%.
After carefully reviewing MediPharm's unaudited first quarter 2025 financial results, Apollo Capital has identified serious risks in MediPharm's business, which current management continues to ignore, while fixating on demonstrably false and misleading ad hominem attacks on Apollo Capital's principals. These observations include:
MediPharm is on a collision course with insolvency. Management lost $3.3 million in cash in the first quarter alone, leaving only $8.4 million remaining on the balance sheet. At this rate, MediPharm will run out of cash by November 2025, six months from now.
Meanwhile, CEO David Pidduck disingenuously stated on the most recent earnings conference call that "We have a strong cash position" and that "[t]he future has never looked brighter."1
It is MediPharm shareholders who will suffer the most as the Company's Board of Directors and management team have presented no credible plan to meaningfully enhance its cash position, or address the fact that the Company reported a first quarter cash burn two times as large as the first quarter of 2024, no access to financing, and no indication of cuts to executive compensation or other wasteful overhead.
Revenue is severely collapsing across every segment. Despite management's repeated claims that "the plan is working," first quarter 2025 revenue fell 10% compared to the previous quarter. International sales, touted by management as the Company's growth engine, declined 18%. Canadian medical cannabis revenue declined 6% on an annualized basis, while adult-use revenue has nearly disappeared, falling 23% annualized. This is a clear and accelerating meltdown of the business.
MediPharm has presented no credible path to profitability. While management has tried to spotlight a modest improvement in gross margins, gross profit in absolute dollars remains flat and nowhere near enough to cover inflated SG&A expenses. Management has offered no evidence that the business can scale, no clarity on what breakeven looks like, and no plan for achieving profitability as revenues decline and fixed costs remain high.
Adjusted EBITDAis a meaningless indicator of financial performance and should be ignored. MediPharm's claim of near break-even performance on this metric ignores over $437,000 in first quarter share-based compensation awarded to a team that has delivered 21 consecutive quarters of losses. This accounting hack allows the Company to cherry pick numbers, mask its deteriorating financial condition, and conceal the true cost of ongoing mismanagement.
Prior to MediPharm's first quarter 2025 financial results conference call, Apollo Capital issued a news release posing several questions for MediPharm should ask management. None of the questions were answered.
Apollo Capital's director nominees – John Fowler, Alan D. Lewis, David Lontini, Demetrios Mallios, Regan McGee, and Scott Walters – are committed to reversing MediPharm's rapid decline.
Don't be fooled by the MediPharm Board's and management team's false enthusiasm, distortion of facts, and personal attacks, which are intended to divert your attention from the Company's precarious and rapidly declining financial and operational condition.
We urge you NOT to sign or return the green proxy cards sent by the Company.
For Shareholders: Carson Proxy North American Toll-Free Phone: 1-800-530-5189 Local or Text Message: 416-751-2066 (collect calls accepted) E: info@carsonproxy.com
Information in Support of Public Broadcast Exemption under Canadian Law
The information contained in this press release does not and is not intended to constitute a solicitation of a proxy within the meaning of applicable corporate and securities laws. Shareholders of the Company are not being asked at this time to execute a proxy in favour of Apollo's director nominees or in respect of any other matter to be acted upon at the Annual Meeting. In connection with the Annual Meeting, Apollo has filed a dissident information circular in compliance with applicable corporate and securities laws. Apollo has provided in, or incorporated by reference into, this press release the disclosure required under section 9.2(4) of NI 51-102 – Continuous Disclosure Obligations ("NI 51-102") and the corresponding exemption under the Business Corporations Act (Ontario), and has filed the preliminary Circular, available under MediPharm's profile on SEDAR+ at www.sedarplus.ca. The Circular contains disclosure prescribed by applicable corporate law and disclosure required under section 9.2(6) of NI 51-102 in respect of Apollo's director nominees, in accordance with corporate and securities laws applicable to public broadcast solicitations. The Circular is hereby incorporated by reference into this press release and is available under MediPharm's profile on SEDAR+ at www.sedarplus.ca. The registered office of the Company is 151 John Street, Barrie, Ontario, Canada L4N 2L1.
SHAREHOLDERS OF MEDIPHARM ARE URGED TO READ THE CIRCULAR CAREFULLY BECAUSE IT CONTAINS IMPORTANT INFORMATION. Investors and shareholders are able to obtain free copies of the Circular and any amendments or supplements thereto and further proxy circulars at no charge under MediPharm's profile on SEDAR+ at www.sedarplus.ca. In addition, shareholders are also be able to obtain free copies of the Circular and other relevant documents by contacting Apollo's proxy solicitor, Carson Proxy Advisors Ltd. ("Carson Proxy") at 1-800-530-5189, local (collect outside North America): 416-751-2066 or by email at info@carsonproxy.com.
None of Apollo, any other "dissidents" within the meaning of the Ont. Reg. 62 of the Business Corporations Act (Ontario), or any partner, officer, director and control person of such "dissident", is requesting that Company shareholders submit a proxy at this time as the Company has yet to issue formal notice of the Annual Meeting and its management information circular. Once formal solicitation of proxies in connection with the Annual Meeting has commenced, proxies may be revoked in accordance with subsection 110(4) of the Business Corporations Act (Ontario) by a registered shareholder of Company shares: (a) by completing and signing a valid proxy bearing a later date and returning it in accordance with the instructions contained in the accompanying form of proxy; (b) by depositing an instrument in writing executed by the shareholder or by the shareholder's attorney authorized in writing; (c) by transmitting by telephonic or electronic means a revocation that is signed by electronic signature in accordance with applicable law, as the case may be: (i) at the registered office of the Company at any time up to and including the last business day preceding the day the Annual Meeting or any adjournment or postponement of the Annual Meeting is to be held, or (ii) with the chair of the Annual Meeting on the day of the Annual Meeting or any adjournment or postponement of the Annual Meeting; or (d) in any other manner permitted by law. In addition, proxies may be revoked by a non-registered holder of Company shares at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary. It should be noted that revocation of proxies or voting instructions by a non-registered holder can take several days or even longer to complete and, accordingly, any such revocation should be completed well in advance of the deadline prescribed in the form of proxy or voting instruction form to ensure it is given effect in respect of the Annual Meeting.
The costs incurred in the preparation and mailing of any circular or proxy solicitation by Apollo and any other participants named herein will be borne directly and indirectly by Apollo. However, to the extent permitted under applicable law, Apollo intends to seek reimbursement from the Company of all expenses incurred in connection with the solicitation of proxies for the election of its director nominees at the Annual Meeting.
This press release and any solicitation made by Apollo is, or will be, as applicable, made by such parties, and not by or on behalf of the management of the Company. Proxies may be solicited by proxy circular, mail, telephone, email or other electronic means, as well as by newspaper or other media advertising and in person by managers, directors, officers and employees of Apollo who will not be specifically remunerated therefor. In addition, Apollo may solicit proxies by way of public broadcast, including press release, speech or publication and any other manner permitted under applicable Canadian laws, and may engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on their behalf.
Apollo has entered into an agreement with Carson Proxy Advisors ("Carson Proxy") for solicitation and advisory services in connection with the solicitation of proxies for the Meeting, for which Carson Proxy will receive a fee not to exceed $250,000, together with reimbursement for reasonable and out-of-pocket expenses. Apollo has also engaged Gasthalter & Co. LP ("G&Co") to act as communications consultant to provide Apollo with certain communications, public relations and related services, for which G&Co will receive a minimum fee of US$75,000 in addition to a performance fee of US$250,000 in the event that Apollo's nominees make up a majority of the Board following the Annual Meeting, plus excess fees, related costs and expenses.
No member of Apollo nor any of their associates or affiliates has or has had any material interest, direct or indirect, in any transaction since the beginning of the Company's last completed financial year or in any proposed transaction that has materially affected or will or would materially affect the Company or any of the Company's affiliates. No member of Apollo nor any of their associates or affiliates has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Annual Meeting, other than the election of directors.
This press release contains forward‐looking statements. All statements contained in this filing that are not clearly historical in nature or that necessarily depend on future events are forward‐looking, and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward‐looking statements. These statements are based on current expectations of Apollo and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove to be accurate. All forward-looking statements contained herein are made only as of the date hereof and Apollo disclaims any intention or obligation to update or revise any such forward-looking statements to reflect events or circumstances that subsequently occur, or of which Apollo hereafter becomes aware, except as required by applicable law.
1 CEO David Pidduck comments on MediPharm first quarter 2025 financial results conference call held on May 14, 2025.
