Good morning. Welcome to the annual meeting of shareholders of Avicanna Inc. I am Stephen Kim, the Global Chief Legal Officer and Corporate Secretary of Avicanna USA Inc., a wholly-owned subsidiary of the corporation. We are conducting the meeting on the Lumi Virtual Shareholder Meeting platform. The Lumi platform will allow registered shareholders to vote on any matters at this meeting that they have not already voted on by proxy. I would now like to turn to Aras Azadian, CEO and Director of the corporation, to call this meeting to order. Aras.
Thank you, Stephen. Pursuant to the corporation's articles and corporate governance documents, as Lead Director of the Board of Directors of the corporation, I will preside as chairman of the meeting. Appointment of Secretary and Scrutineer. As chairman of the meeting, I ask Stephen Kim, Chief Legal Officer of Avicanna USA Inc. to act as secretary of this meeting and Arlene Agnew of Odyssey Trust Company as scrutineer. I now turn the meeting over to Stephen for a brief statement of forward-looking information that may be discussed at the meeting and the explanation of the voting procedures.
Thank you, Aras. In the course of today's meeting, officers and or directors of the corporation may, in their remarks or response to questions, make certain statements which may contain forward-looking information for the purposes of applicable securities laws. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations or assumptions regarding the future of our business, future plans and strategies, our operational results, and other future considerations. Undue reliance should not be placed on any of these forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause the actual results, performance or achievements of the corporation or developments in the corporation's business or its industry to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements.
A detailed discussion as to the risks of the corporation's business, including the outcome of our forward-looking statements, can be found in our public disclosure documents filed under the corporation's SEDAR+ profile at www.sedarplus.ca. Before commencing with the business of the meeting, I would like to comment on the voting procedure. Each shareholder is entitled to one vote for each common share held by that shareholder on all matters to be considered at this meeting. Certain matters to be presented at this meeting require majority approval of the disinterested shareholders holding at least 51% of the issued and outstanding common shares. We will conduct each vote at this meeting by way of a vote cast on the Lumi platform and those votes previously submitted by proxy. I understand that the scrutineers have tabulated all the votes received prior to the voting cutoff.
If you have previously voted, you do not need to vote again when prompted. By voting again, you will revoke any previous vote made prior to the voting cutoff. Now I will turn back to Aras Azadian to briefly comment on the notice of meeting. Aras.
Thank you, Stephen. Notice of this annual and special meeting of the shareholders was sent to all shareholders of record as of the close of business on April 16th, 2026. Proof of mailing of notice of meeting and the accompanying forms of proxy and management information circular have duly been filed. I direct that a copy of the notice of meeting with proof of mailing be kept by Secretary with record of this meeting. As all shareholders should have previously received a copy of this notice of the meeting, I would ask that someone move to dispense with the reading of the notice of meeting.
I so move.
I second the motion. All in favor? Any opposed? Motion carried. Quorum and constitution of meeting. I have received the scrutineer's interim report, and the scrutineer has advised me that the quorum is present at the meeting. I direct that the scrutineer interim report of attendance be attached to the minutes of this meeting. The scrutineer interim report shows that there are present at this virtual meeting or represented by proxy at least 54 shareholders holding at least 59,273,687 voting rights. Attached to all the issued outstanding shares representing at least 47.12% of the outstanding common shares of the corporation. Since a quorum of shareholders is present, I declare that the meeting be duly called and properly constituted for the transaction of business. Lumi platform voting for shareholders.
For those shareholders that did not vote by proxy, we will now open the voting on the Lumi voting platform for all of the resolutions detailed in the management information circular prepared in connection with this meeting. Particulars of the vote cast on all matters may be obtained from the secretary after the meeting. I direct that the scrutineer's final report on all matters be annexed to the minutes of the meeting as a schedule. Financial statements. The financial statements of the corporation for the financial years ended December 31, 2025 and 2024, together with the report of the auditors, were delivered to shareholders who requested them, and copies are available at this meeting. It is not proposed to ask shareholders to approve the financial statements which have been placed before the meeting. Election of directors.
We will now proceed with the first item for approval, election of directors. The management information circular prepared in connection with the meeting sets out that at least five individuals have been nominated for the election of directors. The nominees are Aras Azadian, Giancarlo Davila Char , Michael Kott, Ozgur Kilic, and Eileen McCormack. There were no other nominations by required deadline as set forth by the company's advance notice bylaws, bylaw number two. Will someone move that these five directors be elected as the directors of the corporation to hold office until the next annual meeting of the shareholders, or until successors are elected or appointed?
I so move.
I second the motion. All in favor? Any opposed? Motion carries. Appointment of auditors. The next item of business is the appointment of auditors. May I have a motion that Ramirez Jimenez International CPAs be reappointed as auditors of the corporation to hold office until the close of next annual meeting of the shareholders and the directors be authorized to fix the auditors' remunerations.
I so move.
I second the motion. All in favor? Any opposed? Motion carried. Omnibus Long-Term Incentive Plan. The next item of business set out in the management information circular is approving the unallocated awards and the ratification of awards under Avicanna Inc.'s Omnibus Long-Term Incentive Plan. On June 1, 2019, the board approved the adoption of this plan. The plan was approved by the corporation shareholders at the special meeting of the shareholders held on June 20, 2019, again on August 31, 2022. The Toronto Stock Exchange Company Manual provides that every three years after the institution of the security-based compensation arrangements, which does not have a fixed maximum number of securities issued under the arrangement, all unallocated rights, options, and other entitlements under the arrangement must be approved by the majority of the issuer's directors and by the issuer's security holders.
As our plan is a security-based compensation arrangement with a fixed number of issuance common shares, it must be approved by a majority of shareholders every three years.
I move that an ordinary resolution, the text of which is disclosed in the management information circular of the corporation dated April 2, 2026, approving the unallocated awards and the ratification award under the plan and the plan be approved.
I second the motion. All in favor? Any opposed? Motion carried. If there is no further business, we will now close voting on the Lumi platform. Will someone move to conclude this meeting of the shareholders of Avicanna Inc?
I so move.
I second the motion. All in favor? Any opposed? Motion carried. I therefore declare the formal part of the annual meeting of the shareholders concluded. The results of the voting at this meeting will be available online on SEDAR+. We thank you for attending today and for your ongoing support of the corporation. We now turn to the corporate update portion of the meeting where myself, Aras Azadian, Chief Executive Officer of the corporation, and Nick Hilborn, Chief Financial Officer of the corporation, will provide a brief overview. From there, we will provide a few minutes for questions. For those of you that are not familiar with Avicanna, I imagine the shareholders are. Avicanna is a biopharmaceutical company.
We operate across 4 major commercial platforms that integrates our medical cannabis product portfolio, our medical cannabis care platform, our pharmaceutical pipeline, and our active ingredients department are under the Aureus Santa Marta brand. Today, these four commercial business units are active in commercial stage. We have 50-plus proprietary commercial products across a range of delivery mechanisms, doses, and ratios utilizing cannabinoids. We have had commercial presence in over 20 international markets, with exports or sales conducted in over 24. Last year, we achieved CAD 25.5 million in revenue, with near EBITDA break even during the year. This is all backed by our scientific platform, which includes proprietary intellectual property and formulation technologies, clinical data and evidence being generated through various forms of clinical trials, including real-world evidence studies and randomized controlled trials, and partnerships with leading academic and clinical institutions.
This is all driven into what is our medical portfolio and our pharmaceutical pipeline. During 2025, we've achieved a lot, and we have a lot of highlights that I'd like to point to. We had our strongest financial performance to date, achieving a positive adjusted EBITDA in Q4 and year break even for the full year 2025, with about CAD 0.29 million negative EBITDA or adjusted EBITDA. Nick will expand on that. We expanded our gross margins and improved our operating efficiencies, reflecting disciplined execution and cost optimization. Meanwhile, we were able to invest. Invest in our R&D, in our clinical development, our medical affairs, strengthening our pipeline and generating more evidence. We also continued to expand our commercial efforts in Canada with new SKUs, new listings, new proprietary drug delivery systems.
We were able to advance our international footprint, our international partnerships, and our international infrastructure to support further scale, export and global market expansion planned for 2026 and beyond. These are all just some of the major highlights that we'll cover over the presentation, but our revenue again was CAD 25.5 million with 53% gross profits, which is certainly on the biopharmaceutical side. Zero debt on our balance sheet and adjusted EBITDA, as I already mentioned. I'll quickly allude to our portfolio in Canada under the RHO Phyto brand. These are our standardized cannabinoid formulations across multiple delivery systems. RHO Phyto is what our leading flagship brand on MyMedi.ca, but across other medical platforms as well. These proprietary drug delivery systems are designed to enhance absorption, bioavailability, and provide targeted delivery. These products are backed and supported by preclinical, clinical, in some cases, real-world evidence data.
Their matrices are complex and versatile enough to allow for CBD, CBG, THC, and CBN formulations, which we now have in various international markets. RHO Phyto is a major pillar in our Canadian commercial platform, which now has over 50 proprietary products that are in the market, over 170 commercial placements or listings, all of which is manufactured through 10 manufacturing partnerships, which is part of our asset-light model in Canada. This has resulted in us being commercial across eight medical platforms, inclusive of MyMedi.ca. On MyMedi.ca, us representing somewhere between 24%-25% of all sales across our RHO Phyto products. This is increasing contributions to our proprietary high-margin products and through medical channel distribution expansion. We have a very exciting pipeline of products that's scheduled for release within 2026.
This is a result of over nine years of R&D, where we're going to be releasing fast-acting technologies utilizing in-fluid or quick technologies using a nanoemulsion technology that the company has established, developed, and optimized. These will be resulting in nano gummies, which are fast-acting gummies, fast-acting capsules, and a number of other drug delivery systems in the form of final products that we will be introducing throughout the year. It's also important to highlight MyMedi.ca, our medical platform, which still represents a major part of our revenue and a massive proof of concept in terms of what we believe is a full and comprehensive medical cannabis care platform. This includes patient support programs, onboarding, treatment planning. This includes physician engagement and education. This includes our online platform, which is product access fulfillment. This includes insurance adjudication and reimbursement coordination.
MyMedi.ca is coordinated in collaboration with NGC Canada, which is a licensed producer that holds the inventory. In terms of medical affairs, we continue to advance our discussions with the medical community and continue our efforts to incorporate cannabinoid-based medicine into standard of care. We do so through education, training. Throughout the year, we completed a number of key opinion leader webinars that resulted in reaching over 1,000 physicians. We continue to collaborate with professional organizations such as the NPAO, the Nurse Practitioners' Association of Ontario, Canadian Pain Society, other patient advocacy groups. We successfully hosted our fifth annual symposium at the MaRS Discovery District, which included tens of physicians in terms of presentations, but hundreds of attendees. We're continuing to improve our education platform throughout the Avicanna Academy and through various advisory boards.
Our mission here is to provide education and training necessary again to incorporate cannabinoid-based medicine into the standard of care. In terms of clinical development, we made progress across our real-world evidence studies. The major one being led by Dr. Hance Clarke at UHN. That study led into our first major publication in the Canadian Journal of Pain, which was released early this year. It will be utilized as clinical guidelines and further evidence as we continue to advance our medical affairs efforts. Additionally, we were able to announce a pilot phase II randomized controlled trial, also led by Dr. Hance Clarke, that is testing two forms of our proprietary drug delivery systems and capsules within osteoarthritic pain patients across a number of hospitals in Canada. Recruitment for this study has already commenced.
We announced a phase I randomized controlled trial, which is being conducted with the University of Calgary, where we are actually testing similar formulations on PTSD patients. We're continuing to make advancements and finally in a position to reinvest in R&D. Internationally, Trunerox, our first indication-specific pharmaceutical product, has now commenced its commercialization in Colombia. Trunerox is approved by INVIMA, the authorities of Colombia, for rare epileptic conditions, including Lennox-Gastaut and Dravet syndrome. Trunerox is not approved in Canada. Trunerox commercialization in Colombia could be set as a proof of concept for other developing markets. We are now looking at the United States as a major opportunity, given obviously the rescheduling of cannabinoid-based medicine and the progress that the U.S. government is making towards that.
One soft launch that we were able to conduct through 2025, however, was the re+PLAY CBD and CBG topicals, which is leveraging Avicanna's proprietary formulations in a collaboration with Harrington Wellness and re+PLAY brand. We were able to improve our Santa Marta Golden Hemp operations to be able to scale the infrastructure and the quality of the products that are being produced to be able to commence export of flower. During 2025, we made our first commercial export into Switzerland, and since then have built the fundamentals to be able to export into various markets. We believe this will be a very interesting business model for Santa Marta Golden Hemp as a majority-owned subsidiary of Avicanna. We've been able to expand to now what is 24 international markets, which is reinforcing the regulatory expertise and execution of the company.
We're very excited about the opportunities of further expansion internationally. We believe we're positioned for scale through a combination of our regulatory expertise, supply chain control, commercial partnerships, and of course, our intellectual property. I'm gonna hand it over to Nick to provide a bit of an overview on our financial highlights. Nick.
Thank you, Aras. I'm happy to provide a brief update on the financial results for 2025. While revenue was consistent year-over-year at CAD 25.5 million, we were still able to achieve significant financial improvements. Avicanna earned gross profit of CAD 13.5 million, representing a gross profit margin of 53%. This is a 10% increase from the 2024 gross margins of 48%. The improved gross margin was a result of increased service and licensing revenue, as well as a higher sell-through of Avicanna-branded products on MyMedi.ca. As a percentage of MyMedi.ca sales, Avicanna-branded products sold on MyMedi.ca grew from 17.5% in Q4 2024 to 19.7% in Q4 2025. A 12% increase year-over-year.
The company also continued its relentless efforts on cost control, decreasing operating expenses by CAD 1.5 million year-over-year, representing a 9% decrease compared to 2024. We also achieved adjusted EBITDA positivity in the fourth quarter of 2025, earning CAD 310,000. Avicanna also significantly improved adjusted EBITDA for the full year by 71%, achieving a loss of CAD 300,000 in 2025 compared to a loss of CAD 1 million in 2024. This improvement is a direct result of the boost in gross margin and efficiencies within operating expenses. Net loss was also reduced significantly, cut by 40% from CAD 4.6 million in 2024 to CAD 2.7 million in 2025.
Avicanna continues to operate with no debt on the balance sheet and managed to improve its working capital position by 23% in 2025 as compared to 2024. The company is on the path to funding its own operations through operating cash flow and only raised CAD 1 million through a non-brokered private placement during 2025, as compared to CAD 4.8 million in 2024. I will now pass it back to Aras for any closing remarks and questions.
Thanks, Nick. As we look forward into the rest of 2026, I'll categorize where we have our most level of focus and excitement. In Canada, we are very excited about further scale and improvements of MyMedi.ca, particularly the performance of RHO Phyto and our own portfolio across MyMedi.ca and the expansion of our proprietary 3.0 or advanced emulsion technologies into other channels. We are excited that we will realize the value of our proprietary technology, but also the credibility that we built with the medical community. In the United States, we are now assessing various paths and also opportunities given the recent rescheduling and advancements from a regulatory perspective. We aim to achieve a multi-pronged U.S. strategy that is focused on federally permissible activities, including CBD commercialization, pharmaceutical development, strategic licensing, while preparing for further reschedule.
Internationally, beyond Canada and United States, we expect to have continued growth across global markets through expanded commercialization of our Aureus API raw materials and increasing the availability of RHO Phyto formulations and products across various international markets. Finally, from an R&D and clinical perspective, we believe that we can now further strengthen our intellectual property through new patent filings, further advancing our pipeline assets towards commercialization, and make advancements across our drug candidates and pharmaceutical pipeline through clinical development that's already in place. A very exciting 2026 ahead. We appreciate the ongoing support from our shareholders, and we appreciate the ongoing attention for those of you who joined this call. I'll open it up for a few minutes for potential questions. Ernesto, are there any questions from the audience?
No questions have been submitted.
Fantastic. Well, thank you everyone.