Apollo Capital urges Medipharm shareholders to support board change

Apollo Technology Capital, one of the largest shareholders of MediPharm, owning approximately 3.0% of the Company’s common stock, commented on MediPharm’s first quarter 2025 financial results, reported earlier this week. The company said, “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.” 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 EBITDA is 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.”