CAN: MediPharm shareholders warned over "value destruction" by investor

Apollo Technology Capital Corporation, a major investor in MediPharm Labs, has issued a warning to MediPharm's shareholders, claiming that the company's current leaders are pursuing mergers and acquisitions that could decrease the company's value. Apollo Capital warns that the leaders aim to eventually sell MediPharm in a way that doesn't involve cash but would dilute existing shares. Such a sale would also result in current management receiving over $5 million due to change of control and other related payments.

"It's a travesty for shareholders to have what is believed to be a $12M asset sold for just $4.5M, likely netting shareholders less than $4M after fees and expenses. Worse still, the acquirer will wisely use the facility to produce cannabis for export that will directly compete with MediPharm in Europe," says Regan McGee of Apollo Capital.

"Last week's fire sale announcement makes it crystal clear that MediPharm's Board has no actual value creation strategy, just a desire to sell off MediPharm's assets at shareholders' expense to keep paying themselves at 500% above market norms. Is MediPharm pursuing growth facilities as a strategy or not? Is the Napanee facility the next fire sale we will see to a competitor?" questions Regan McGee of Apollo Capital.

Apollo expects the scaling of MediPharm's Napanee facility to cost shareholders significantly more than what the buyer of the Hope Facility will spend to achieve real profitability. Apollo expects the scaling of MediPharm's Napanee facility to cost between $3 million and $5 million and take 12 to 18 months to generate revenue. Apollo notes MediPharm's management team does not have cultivation experience, which could result in millions of investment dollars needed before it provides a return, if ever.

The Hope Facility, formerly known as CannaFarms, was built by the Laflamme family to be one of the first licensed facilities in Canada. As exceptional visionaries, the Laflamme family built a world-class facility at immense personal cost to service patients in need, including military veterans.

Apollo has urged shareholders to save their investments and vote the Gold Card by June 13, 2025. Shareholders are urged to not sign or return the green proxy cards sent by the Company.