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The February 2022 announced sale of Avante to a third party, at over 100% premium to Avante's current share price, was blocked by Fairfax and Mr. Mounouchos acting together, with the support of Kingsdale Advisors (which neither Mr. Mounouchos or Fairfax disclosed) at a cost of $600,000 - which was subsequently paid by Avante itself. Despite the dismal share performance following the blocked sale, Avante's current board has been unwilling (during both 2023 and 2024 to date) to even discuss board representation or governance improvements with Mr. Christopoulos. For example, letters from Mr. Christopoulos dated August 9, 2024 and August 23, 2024, which were not answered by Avante, had offered discussion with the board:

"…to determine if some agreement can be reached, to potentially avoid [the inclusion of the proposals] in the circular."

Ratification of Stock Option Plan

Avante's CEO was awarded 800,000 options on April 28, 2022 with exercise prices beginning at $0.88, only a few weeks after orchestrating the end of the arrangement that would have seen Avante sold for cash and shares valued at $1.75 per Avante share.

In addition, note 21 of the March 31, 2023 financial statements (issued July 31, 2023) disclosed, for the first time:

"On April 8, 2022, the Company offered a long term incentive plan to a director and officer of the Corporation.1 million shares will be granted on April 1, 2027, and 1 million shares will be granted after the Company's earnings per share in respect of the fiscal year 2027 will be announced and certain targets are met."

Mr. Christopoulos' immediately commented to Avante's legal counsel that the "2 million shares grant" not only had an exercise price of zero, it placed Avante's equity based compensation plan beyond both the 10% overall limit and the 5% single individual limit imposed by the TSXV.

The financial statements for June 30, 2023 released on August 29, 2023 vaguely suggested that the "2 million shares grant" had been canceled, leaving shareholders to guess for themselves what was really going on:

"Share based payments incurred during the three months ended June 30, 2023, include a reversal of a prior stock based compensation due to cancellation of awards to related party."

Unfortunately, any relief of Avante's other shareholders was short lived, because the August 28, 2023 Circular provided yet another shocking surprise. It was filed one day before the release of the June 2023 financial statements (which lacked a Subsequent Events note), and stated under "Executive Employment Agreements":

"Mr. Mounouchos is also eligible for a long term incentive payment (the "LTIP") payable upon the earlier of (a) the date that the Corporation terminates Mr. Mounouchos' employment for any reason; and (b) August 29, 2028 (with either (a) or (b) being the "LTIP Trigger Date", as applicable). The LTIP amount will be equal to the cash equivalent of 1,250,000 Common Shares valued as at the LTIP Trigger Date." [Emphasis added]

and

"Mr. Kapoor is also eligible for a long term incentive payment (the "LTIP") payable upon the earlier of (a) the date that the Corporation terminates Mr. Kapoor's employment for any reason; and (b) August 29, 2028 (with either (a) or (b) being the "LTIP Trigger Date", as applicable). Mr. Kapoor is also entitled to claim his LTIP amount, at his option, in the event that Mr. Mounouchos' employment is terminated by the Corporation. The LTIP amount will be equal to the cash equivalent of 750,000 Common Shares valued as at the LTIP Trigger Date." [Emphasis added]

Once again, Mr. Christopoulos immediately expressed disbelief to Avante's legal counsel not only regarding the size of the award, but that the new 2 million shares LTIP was payable even in the event of cause for dismissal. The reaction seemed to be that the Circular was in error. If there were errors, they have been repeated in the 2024 Circular.

Shareholder Proposal Four – Disclose Detailed Voting Results

Shareholders – in their capacity as owners and voters – have a right to know the detailed voting results. However, it is clear from Avante's written response to Proposal Four, that Avante does not intend to release detailed voting results, demonstrating once again, contempt for its very own shareholders.

Shareholder Proposal Five – Shareholder Meetings In Person

The 2023 shareholders' meeting allowed a mere second from the time shareholders were asked to submit questions to the announcement made: 'There are no questions.' Not surprisingly, given how the meeting was conducted, there were no questions at all…which were announced.

It appears that Avante intends to conduct the 2024 meeting in similar, authoritarian fashion. The 2024 Circular states:

"The Chair of the Meeting reserves the right to edit or reject questions he deems inappropriate, or to limit the number of questions per Shareholder in order to ensure that as many Shareholders as possible will have the opportunity to ask questions. The Chair of the Meeting has broad authority to conduct the Meeting in an orderly manner. To ensure the Meeting is conducted in a manner that is fair to all Shareholders, the Chair of the Meeting may exercise broad discretion in the order in which questions are asked and the amount of time devoted to any one question." [Emphasis added]

Shareholder Proposal Six – Repeal Advance Notice By-Law

Contrary to Avante's response, By-Law Number 1A does not "…enable [Avante shareholders] to exercise their voting rights…". There is no requirement that nominees be included in the Circular or listed in the related proxy.

Avante also states: "Repealing…would…leave the Corporation vulnerable to having its shareholder meetings 'ambushed'…" – an interesting if not strange comparison to draw, given the culmination of events on March 30, 2022, including the replacement of Avante's entire board of directors without a shareholders' meeting, and effect on the value of Avante's shares.

QUESTIONS FOR OCTOBER 24, 2024 ANNUAL MEETING

Mr. Christopoulos anticipates shareholders' questions during the 2024 meeting will be censored or even ignored, and consequently is submitting certain questions now, requesting that each question be answered fully during the October 24, 2024 shareholders' meeting:

1. Can both Mr. Mounouchos and Wade Burton, Chair of the Compensation Committee, please explain how blocking the sale of Avante at $1.75 per share in March 2022 benefitted any Avante shareholder, other than Mr. Mounouchos?

2. In March 2022, Mr. Mounouchos owned over 10% of Avante's shares and was arguably already aligned with its shareholders. Will Mr. Burton please explain why Avante's directors immediately awarded Mr. Mounouchos both 800,000 options and an additional "2 million shares grant", which together represented over 10% of the outstanding shares?

3. Will Mr. Burton please explain how bonuses of $575,000 for fiscal 2024 can be justified given that Avante reported a Net Loss of $3,049,396 and Cash Used in Operating Activities of $763,709?

4. Audit fees for 2021, when Avante had about $91.7 million of revenues, were $275,000. For 2024, Avante's revenues were just $24.9 million, yet audit fees were $315,000. Can Dan Argiros, Chair of the Audit Committee, please explain if Avante's 2024 audit fees are high because of weak internal controls, upon which the auditors are unable to rely?

5. Will CEO Mr. Mounouchos and CFO Mr. Kapoor both please explain why trade accounts receivable as a percentage of revenues grew from 17.5% on March 31, 2022 to 26.0% on March 31, 2024?

6. Can both Mr. Burton and Mr. Argiros please explain if it is correct that "accounts receivable in credit balance totaling about $500,000 on March 31, 2022" were brought into income for 2023 and 2024, and also explain to what degree such credits increased the 2023 and 2024 bonuses paid to each of the CEO (Mr. Mounouchos), and the CFO (Mr. Kapoor)?

7. On November 30, 2023 a legal claim against each of Avante Logixx Inc., Mr. Mounouchos, Wesley Hall, Robert Klopot and Hamblin Watsa Investment Counsel Ltd. was filed by former CEO, Craig Campbell. Mr. Campbell's claim included damages relating to a promise made to make him whole in respect of the impact of the blocked sale of Avante (at $1.75) on the value of his Avante shares. Notably, Avante's other shareholders were not provided such a promise.

On September 18, 2024 Mr. Mounouchos announced the acquisition of 1,369,894 Avante shares at $0.8228 each. The Early Warning Report and SEDI indicate shares were acquired with Mr. Mounouchos' payment of $227,183 cash and $ 900,000 in other securities, and furthermore 298,000 shares were acquired on September 17, 2024 and 1,071,894 shares were acquired on September 18, 2024.

Mr. Christopoulos understands that the 1,369,894 shares were acquired from Mr. Campbell, who in addition to his legal claim requesting he be made whole in respect of the $1.75 blocked sale, was opposed to aspects of Avante's corporate governance.

Will Mr. Burton please explain if, in conjunction with the acquisition of the 1,369,894 shares by Mr. Mounouchos, Mr. Campbell's legal claim has been fully resolved, and if Avante made or will make any payment(s) to Mr. Campbell (including through Avante's liability insurers) and the total amount of payment(s)?

This press release includes the personal views and opinions of George Christopoulos. It does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable corporate and securities laws.

SOURCE George Christopoulos

View original content: http://www.newswire.ca/en/releases/archive/October2024/08/c5265.html