MediPharm Labs Cautions Shareholders about Dissident Nominees' Governance Failures at Check-Cap Ltd.

Hamilton Spectator

23-05-2025

TORONTO, May 23, 2025 (GLOBE NEWSWIRE) — MediPharm Labs Corp. (TSX: LABS) ('MediPharm', the 'Company', or 'we'), a pharmaceutical company specialized in precision-based cannabinoids, today provided its shareholders with information related to three of the six directors (the 'Dissident Nominees') nominated by Apollo Technology Capital Corporation ('Apollo') to stand for election at MediPharm's Annual and Special Meeting of Shareholders on June 16, 2025. All dollar figures in this news release are in U.S. dollars.
The Company believes events that have transpired over the past two years at Check-Cap Ltd. ('Check-Cap'), a Nasdaq-listed company, provide valuable insight into the dubious tactics, motives and character of the individuals now seeking to take control of the board of directors of MediPharm (the 'MediPharm Board').
The extraordinary sequence of events at Check-Cap has been notable for its evidence of poor governance practices, lack of transparency and disclosure to shareholders, questionable allocation of cash resources, high turnover, public shareholder disputes, failure to execute on promises and destruction of shareholder value.
Most alarmingly, Check-Cap has been transferring millions of dollars of cash to Apollo and its subsidiaries – companies led by Dissident Nominee and shareholder, Regan McGee. The cash transfers were characterized as being tied to a merger agreement with an Apollo subsidiary that was announced 14 months ago but has yet to be completed.
Chris Taves, Chair of MediPharm, commented:
'The troubling fact pattern involving three of the Dissident Nominees raises several red flags. The MediPharm Board urges its shareholders to exercise a high level of caution before considering voting for any of McGee's nominees to run your Company.'
Summary of Recent Events at Check-Cap1
Symetryx Corporation ('Symetryx'), a Toronto-based investment firm and owner of 5.8% of Check-Cap's shares according to public filings, led a successful campaign in 2023 to stop a business combination with Keystone Dental Holdings (the 'Keystone Transaction') proposed by the Check-Cap board (the 'Check-Cap Board'). According to its website and other public sources, Symetryx also owns shares of Nobul, a company founded and led by Dissident Nominee, Regan McGee.
A vote by Check-Cap shareholders on December 18, 2023 resulted in the termination of the 2023 Keystone Transaction, and the replacement of the entire Check-Cap Board with five nominees proposed by Symetryx. Within five weeks following this vote, four of the five directors duly elected by shareholders had resigned, and were replaced with four new Check-Cap Board members. One of the directors who had been appointed, resigned the following day.
On March 25, 2024, Check-Cap
announced
the terms of a proposed business combination (the 'Check-Cap Nobul Merger') with Nobul AI Corp. ('Nobul'). According to the announcement, the Check-Cap Nobul Merger was subject to the approval of Check-Cap shareholders at a special meeting 'expected to occur in the coming months.'
Approximately 14 months after the initial announcement of the Check-Cap Nobul Merger, there is currently still no indication that a shareholder vote on the Check-Cap-Nobul Merger has ever occurred or been scheduled, no recent announcement on the expected timing to complete or terminate the Check-Cap Nobul Merger, and no indication that Check-Cap has been seeking an alternative transaction to the Check-Cap Nobul Merger.
Despite no formal business combination having been completed, on July 28, 2024 and September 8, 2024, the Check-Cap Board ratified and approved a loan agreement for a $6 million loan to Nobul, and the transfer of $11 million to a segregated bank account 'to fund the pursuit of accretive acquisition targets or other growth initiatives of Nobul and for no other purposes.' At least $2.8 million of the funds had already been spent by the end of 2024.
As set out in Check-Cap's business combination agreement with Nobul ('BCA') amended on September 8, 2024, funds in the segregated account can be disbursed with the authorization of just two individuals: Check-Cap chairman David Lontini and Nobul chairman Mr. McGee, both of whom are among Apollo's six Dissident Nominees for the MediPharm Board.
1 All events described in this news release are based on Check-Cap's filings with the U.S. Securities and Exchange Commission beginning in June 2023 and public news releases. We urge shareholders to review those source materials. Our summary may be limited by any deficiencies in that disclosure.
Check-Cap's Connections to the Dissident Nominees
Three of the six Dissident Nominees now seeking election to the MediPharm Board, namely David Lontini, Alan D. Lewis II and Regan McGee, have been directly involved in the events at Check-Cap:
Important Questions Raised for MediPharm Shareholders
MediPharm believes that activist shareholders often follow the same 'playbook' in their pursuit to take control of target companies, especially when they have been successful utilizing such tactics in the past. We are concerned that the events at Check-Cap, and the direct involvement of three of the Dissident Nominees now seeking election to the MediPharm Board, represent significant risks for the Company's shareholders.
MediPharm urges its shareholders to consider the following questions:
1) How did it benefit Check-Cap shareholders to transfer millions of dollars to Nobul? Was this in the best interests of Check-Cap, or only Regan McGee and the company he controls?
2) Does Apollo plan to replace some or all of its Dissident Nominees with new appointees, similar to what happened at Check-Cap? Which ones would remain to serve on the MediPharm Board?
3) Has Apollo already identified specific merger or acquisition targets it intends for MediPharm to pursue? Are such merger candidates connected with any of the Dissident Nominees or their affiliates or associates?
4) Do the Dissident Nominees, and particularly those who have been directly involved with Check-Cap, have a track record that qualifies them to take control of another public company, in particular one in a highly specialized sector?
5) Do Apollo and its Dissident Nominees have a better plan in place for MediPharm, as compared to the overlapping group that took control of Check-Cap?
Additional Background Information on the Events at Check-Cap
To supplement the information provided above, a selected summary of developments at Check-Cap over the past two years follows.
The MediPharm Board urges its shareholders to exercise a high level of caution before considering voting for the same group of individuals responsible for the failures at Check-Cap to run the Company, and to treat any statements or promises made by the Dissident Nominees with a high level of skepticism.
Vote for the Highly Qualified MediPharm Nominees
In light of the concerns raised by multiple parties in litigation with Mr. McGee, as well as the issues the Company has raised in previous news releases about the qualifications and suitability of the Dissident Nominees collectively, MediPharm urges shareholders to vote only using the GREEN proxy or GREEN voting instruction form in support of all of the Company's nominees and resolutions.
To ensure your vote is counted, shareholders are encouraged to proactively contact their broker to obtain their 16-digit control number associated with the GREEN management proxy. Once received, you can cast your vote by visiting
www.medipharmlabsagm.com
.
You may receive materials or outreach from the dissident — please disregard any such communications and vote only using the GREEN proxy in support of the Company's nominees.
About MediPharm Labs
Founded in 2015, MediPharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients (API) and advanced derivative products utilizing a Good Manufacturing Practices certified facility with ISO standard-built clean rooms. MediPharm Labs has invested in an expert, research driven team, state-of-the-art technology, downstream purification methodologies and purpose-built facilities for delivery of pure, trusted and precision-dosed cannabis products for its customers. MediPharm Labs develops, formulates, processes, packages and distributes cannabis and advanced cannabinoid-based products to domestic and international medical markets.
In 2021, MediPharm Labs received a Pharmaceutical Drug Establishment License from Health Canada, becoming the only company in North America to hold a commercial-scale domestic Good Manufacturing Practices License for the extraction of multiple natural cannabinoids. This GMP license was the first step in the Company's current foreign drug manufacturing site registration with the US FDA.
In 2023, MediPharm acquired VIVO Cannabis Inc., which expanded MediPharm's reach to medical patients in Canada via Canna Farms medical ecommerce platform, and in Australia and Germany through Beacon Medical Australia PTY Ltd. and Beacon Medical Germany GMBH. This acquisition also included Harvest Medical Clinics in Canada which provides medical cannabis patients with Physician consultations for medical cannabis education and prescriptions.
The Company carries out its operations in compliance with all applicable laws in the countries in which it operates.
Shareholder Voting Assistance:
If you have any questions or require any assistance in executing your GREEN proxy or voting instruction form, please call Sodali & Co at:
North American Toll-Free Number: 1.888.777.2059
Outside North America, Banks, Brokers and Collect Calls: 1.289.695.3075
Email:
[e-mail]
North American Toll-Free Facsimile: 1.877.218.5372
For up-to-date information and assistance in voting please visit:
www.medipharmlabsagm.com
Investor Contact:
MediPharm Labs Investor Relations
Telephone: [phone]
Email:
[e-mail]
Media Contact:
John Vincic
Oakstrom Advisors
[phone]
[e-mail]
Cautionary Note Regarding Forward-Looking Information:
This news release contains 'forward-looking information' and 'forward-looking statements' (collectively, 'forward-looking statements') within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as 'expects', or 'does not expect', 'is expected', 'anticipates' or 'does not anticipate', 'plans', 'budget', 'scheduled', 'forecasts', 'estimates', 'believes' or 'intends' or variations of such words and phrases or stating that certain actions, events or results 'may' or 'could', 'would', 'might' or 'will' be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things: timing of the Annual and Special Meeting, any impacts to MediPharm shareholders of the actions relating to the Dissident Nominees described herein, and any outcomes resulting from the circumstances and information cited herein. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the inability of MediPharm Labs to obtain adequate financing; the delay or failure to receive regulatory approvals; and other factors discussed in MediPharm Labs' continuous disclosure filings, available on the SEDAR+ website at
www.sedarplus.ca
. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, MediPharm Labs assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.