An anonymous representative of Apollo Technology Capital reports

APOLLO CAPITAL WARNS MEDIPHARM SHAREHOLDERS OF CONTINUED VALUE DESTRUCTION AND INSOLVENCY RISK FOLLOWING DISASTROUS Q1 FINANCIAL RESULTS

Apollo Technology Capital Corp., one of the largest shareholders of Medipharm Labs Corp., owning approximately 3 per cent of the company's common stock, is commenting 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 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-per-cent loss into 100 per cent.

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, chief executive officer 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 per cent compared with the previous quarter. International sales, touted by management as the company's growth engine, declined 18 per cent. Canadian medical cannabis revenue declined 6 per cent on an annualized basis, while adult-use revenue has nearly disappeared, falling 23 per cent 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 (selling, general and administrative) expenses. Management has offered no evidence that the business can scale, no clarity on what break-even looks like, and no plan for achieving profitability as revenues decline and fixed costs remain high.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) 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 continuing mismanagement.

Prior to Medipharm's first quarter 2025 financial results conference call, Apollo Capital issued a news release posing several questions 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.

Do not be fooled by the Medipharm board 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.

Apollo Capital urges shareholders not to sign or return the green proxy cards sent by the company.

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