Public Microcap Biotech Company Board

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A few weeks ago, a colleague of mine suggested I share some A few weeks ago, a colleague of mine suggested I share some of my experiences over the last 20 years running public biotech of my experiences over the last 20 years running public biotech companies. A caveat to start - almost all my experiences were companies. A caveat to start - almost all my experiences were with companies that were in trouble either financially, managerially, with companies that were in trouble either financially, managerially, or technologically. There are many well-run, well-funded biotech or technologically. There are many well-run, well-funded biotech companies where this primer would not apply. However, if you are companies where this primer would not apply. However, if you are on the other side of the coin, read on. on the other side of the coin, read on.

BOARD OF DIRECTORSBoarD oF DirEcTorS

Boards should be your first line of defense and Boards should be your first line of defense and should always have your back. This is not always the should always have your back. This is not always the case. One of my Board members once told me he case. One of my Board members once told me he was flying high cover for me -and he did -mostly. was flying high cover for me -and he did -mostly. If you are interviewing for the CEO position at a If you are interviewing for the CEO position at a microcap biotech with a less than stellar past here microcap biotech with a less than stellar past here are a few items, you may want to address during are a few items, you may want to address during your due diligence: your due diligence:

HOWHoW LONg HAvELoNg HavE THE CURRENT BOARDTHE cUrrENT BoarD mEmBERSMEMBErS BEEN BEEN WITH WiTH THE COmPANy? THE coMpaNy?

If the company is in dire straits and the same Board If the company is in dire straits and the same Board has been in place for the entire time this could be a has been in place for the entire time this could be a red flag. One Company I was involved with had a red flag. One Company I was involved with had a Board that hadn’t changed in membership for ten Board that hadn’t changed in membership for ten years and the Company was struggling to survive years and the Company was struggling to survive but if the Board continued to get compensated (see but if the Board continued to get compensated (see next section below) there was no impetus to resign next section below) there was no impetus to resign or bring in new members. or bring in new members.

WHAT ISWHaT iS THE ANNUAL COmPENSATIONTHE aNNUaL coMpENSaTioN FORFor BOARDBoarD mEmBERS?MEMBErS?

Some Board members view their membership as an Some Board members view their membership as an eternal annuity and retirement fund. They have no eternal annuity and retirement fund. They have no intention of radically helping the company as long intention of radically helping the company as long as they continue to get compensated, they maintain as they continue to get compensated, they maintain the status quo. I once had a situation where the the status quo. I once had a situation where the company had about two months of capital and we company had about two months of capital and we were desperately trying to raise capital. I suggested were desperately trying to raise capital. I suggested to the Board that senior management would be to the Board that senior management would be willing to take a drastic pay cut for several months willing to take a drastic pay cut for several months to keep the company going. I asked if the Board was to keep the company going. I asked if the Board was willing to do the same – it was soundly rejected. This willing to do the same – it was soundly rejected. This spoke volumes as to their real motivation. spoke volumes as to their real motivation. Have the Board members participated in any of the Have the Board members participated in any of the past financings and how much company stock do past financings and how much company stock do they own? they own? If you are being recruited to raise capital, it is If you are being recruited to raise capital, it is important to know if the Board believes enough in important to know if the Board believes enough in the Company and its future to invest in its future. If the Company and its future to invest in its future. If there is no skin in the game for the Board it does not there is no skin in the game for the Board it does not

create the enthusiasm or creativity needed to raise capital or create a viable strategy. A corollary to this statement is whether Board members have brought in investors to help finance the company. I once had a new Board member who thought the company was on the verge of getting a breakthrough drug approved for a very important indication. During the interview process he bragged about his net worth but when it came time to help finance the company, he did not participate because he realized the drug was not going to FDA for at least two years.

WHAT ARE THE BOARD DyNAmICS?

You can learn a great deal by talking with individual Board members and if possible senior managers about Board members interactions with one another. One time I was interviewing with a Board member, and he called a fellow Board member a glorified paint salesman! That should have been enough of a red flag to have me question taking the position. Also, the flip side is also important. In a different situation, I was brought in as the new CEO because the former CEO was being sued by investors. When I arrived at my first Board meeting the individual was still on the Board! He was a friend of the Chairman of the Board. It took me six months to have him resign from the Board.

WHAT SKILL SETS DO INDIvIDUAL BOARD mEmBERS POSSESS?

Board memberships sometimes have interesting histories. The composition of membership may have been shaped by personal friendship, financings, founders, or politics. A strong Board should have members that know biotech, drug development and/ or financing public companies. Having members that have no experience in any of these areas makes for a difficult board for management. I once had a Board member who was skilled CPA accountant. He had been on several Boards of companies that actually had a revenue stream, and he knew the audit process and public company filing processes exceptionally well. He was completely unaware of the risk profile of biotech companies. Every financing opportunity I presented he balked at because he couldn’t understand the cost of capital for a biotech company with no products approved. This led to delays, much aggravation and a divided Board. If possible, determine if the Board is open to adding a new member(s) with a defined skill set. As I mentioned at the beginning of this article, Boards are critical to the success of biotech companies. In theory, they should work with the CEO and senior management to help move the company forward both strategically and financially. Sadly, this is not always the case. Self-interest, greed and incompetence are among the most common reasons for failure in this regard. Many times, the issues listed above may be mitigated by a CEO willing to put in the time to communicate and develop relationships with individual Board members. I tried to accomplish this with weekly calls when needed or occasional lunches with local Board members. It is important to realize that in most cases it is extremely difficult to change Board members as a senior manager. Most Boards are voted in at annual Board meetings. I encourage you to look at the difference between a plurality vote or a majority vote for Board membership to see how difficult it can be to vote someone off a Board.

In summary, completing due diligence on the Board you will be working with is a critical piece in determining your success with your new company. Obviously, it is not the only factor but be assured a competent and helpful Board will go a long way on your journey.

John N. Bonfiglio PhD MBA and has over 30 years’ experience in the biotech/pharmaceutical industry Including over 20 years as a C-level executive in the biotech industry.

Dr. Bonfiglio started his career with 11 years at Allergan pharmaceuticals. He spent 3 years at Baxter HealthCare before starting a career in small biotech companies. He rose to the position of CEO at Peregrine Pharmaceuticals where he turned around the financially strapped public company.

Dr. Bonfiglio was named COO at Cypress Bioscience while the company was reinventing itself as neuro-pharmaceutical company. He then joined the Immune Response Corporation as CEO and was responsible for raising over $50M and restarting clinicals in the HIV and MS areas.

As CEO at Argos Therapeutics a privately held oncology company, he raised $35M through a series C financing. His tenure at Argos produced clinical data which led to an IPO and subsequent financings.

Following Argos, he became President and CEO at Oragenics in Tampa, Fl. Here he completed two strategic deals with Intrexon Corporation, raised $29M relisted the company on the NYSE:MKT and refocused the company on new novel and proprietary antibiotics

Dr. Bonfiglio was the COO at TapImmune where he was responsible for starting a clinical program, raising capital and relisting the company on Nasdaq. The company is now known as Marker Therapeutics (MRKR -Nasdaq).

Dr. Bonfiglio has held independent Board positions at GT BioPharma (GTBP), Microlin and Genprex (GNPX).

He recently joined Sequella a private company developing new therapies for Multi Drug Resistant tuberculosis as an executive Board director.

To reach Dr. Bonfiglio: bonfiglio.john@gmail.com

Q&a WiTh CEO, JOhN yOuNg

RK: LET’S START WITH A qUICK OvERvIEW OF THE BUSINESS…

jy: Boat Rocker (TSX: BRMI) is the home for creative visionaries. An independent, integrated global entertainment company, Boat Rocker’s purpose is to tell stories and build iconic brands across all genres and mediums. With offices in seven cities globally, Boat Rocker’s creative and commercial capabilities include Scripted, Unscripted, and Kids & Family television production, distribution, brand & franchise management, a world-class animation studio, and talent management through Untitled Entertainment.

RK: HOW WOULD yOU DESCRIBE THE COmPANy’S PERFORmANCE TO THIS POINT (BEgINNINg OF SEPTEmBER 2022) IN THE yEAR? HAvE yOU REACHED THE mILESTONES AND gOALS THAT yOU SET FOR THE COmPANy?

jy: For 2022, we have seen continued momentum across our business in the first half of the year with more than 40 shows in various stages of production. Currently we have seven premium scripted series on our FY 2022 slate. The expansion of our premium scripted slate from two shows in 2021 to seven this year underscores our focus on creating and delivering high quality shows to a wide range of leading streamers and broadcasters globally and investing in owned IP.

This quarter (Q2) we began to deliver on the anticipated ramp in Adjusted EBITDA, which we expect will continue in the second half of the year. Although revenue was up only modestly over the prior year period, driven by a 61% increase in Kids & Family and 12% in Representation, Adjusted EBITDA grew by 185%, which speaks to our ability to improve Adjusted EBITDA margins as we forecasted previously. We expect Adjusted EBITDA for the year to fall at the lower end of our previously stated range of $40 million to $50 million, but still be reflective of significant growth over the prior year at 25% at the lower end. For 2022, we anticipate lower revenue compared with last year, but improved Adjusted EBITDA margin in line with our previously stated expectations. As we have said before, annual Adjusted EBITDA is the most important measure of our performance, as well as Adjusted EBITDA growth over multiple years given the length of production cycles.

2022 share performance has been disappointing, off the back of a significantly weakened overall global stock market. Management believes the current share price does not reflect the intrinsic value of the Company and for that reason started a Normal

Course Issuer Bid, or NCIB, beginning September 1st, as the repurchase of stock represents an attractive ROI and appropriate use of funds.

RK: ARE THERE ANy INDUSTRy TAILWINDS TO PUSH FORWARD SOmE OF THE COmPANy’S gOALS AND OBjECTIvES?

jy: We continue to see strong demand for content from streamers and broadcasters in general. While there has been meaningful consolidation amongst our buyers such as Warner Media with Discovery, Amazon with MGM Studios, Viacom and CBS, we are also seeing new players enter the market, like Amazon Freevee and ROKU– so the landscape is changing frequently. What isn’t changing, however, is the demand for, and volume of, new content that platforms need to populate their channels and grow and retain –Boat Rocker continues to benefit from that need. The trend to date has shown total budgets from big streamers continues to hold or grow. According to Morgan Stanley analysts, the top streamers are projected to spend upwards of $140 billion across sports and entertainment content in 2022 alone. Boat Rocker’s goal since the start, close to 20 years ago, has been to tell stories and build iconic brands across all genres and mediums with a focus on quality. By partnering with some of the biggest streaming and broadcasting names in the business, including Netflix, Disney+, ROKU, Apple TV+, BBC, Amazon Prime Video and more, we hope to bring our content to a wide and global audience to enjoy.

RK: WHAT ARE SOmE OF THE COmPANy’S vALUE CATALySTS FOR THE REST OF 2022, gOINg INTO 2023?

jy: It has been a very busy year so far! Certainly, a big part of what success looks like for 2022 is executing and delivering on all our shows across each of our divisions. Doing so will position us well for 2023 in beyond, as success in 2022 should catalyze subsequent season

And of course we are always invested in developing our slate so we have new projects to bring to market next year – this means focusing on in-house development, optioning stellar existing IP, and partnering with creative talent through first look deals.

renewals, international sales of our owned shows, and for our franchise brands like Dino Ranch, further exploitation of merchandise and licensing opportunities. And of course we are always invested in developing our slate so we have new projects to bring to market next year – this means focusing on in-house development, optioning stellar existing IP, and partnering with creative talent through first look deals. Some of the projects we are currently working on include:

• The 2nd season of sci-fi series Beacon 23 for

Spectrum and AMC. • Orphan Black: Echoes, the highly anticipated spin-off series of international hit show Orphan

Black, featuring Krysten Ritter. • Near-fi scripted series Robyn Hood for Corus, created by and directed by Director X and written by award winning screenwriter, Chris Roberts (Orphan Black). • Season 2 of Boat Rocker’s premium scripted drama series, American Rust, starring Emmy winner Jeff Daniels and Golden Globe winner

Maura Tierney for Amazon Freevee. • Premium scripted series Slip, created, written and directed by Zoe Lister-Jones and produced with our partners at TeaTime Pictures, Dakota

Johnson and Ro Donnelly, for The Roku Channel. • Invasion Season 2 and mrs American Pie for

Apple TV+. • Downey’s Dream Cars, (working title), featuring

Robert Downey Jr.for the Warner Bros. Discovery streaming platform. • Drag me to Dinner, a new cooking series created and executive produced by and featuring

Neil Patrick Harris and David Burtka for Hulu. • Dino Ranch, our pre-school series which airs on

Disney Junior in the US, remains the #1 preschool U.S. cable show for kids aged 2 to 5 in its 7pm time slot and is now available to view in 170 countries worldwide. Online toy sales have performed well so far this year, and we are excited to have the brand featured in Walmart’s upcoming 2022 Holiday Toy Catalog and on shelves across big name stores like Target and

Amazon as well as other global stores. We now have a total of 45 licensees.

We are expecting great things from Dino Ranch not only from a viewership perspective, but also from a merchandise and licensing opportunity perspective. While it takes many years to create a super brand like Peppa Pig or PJ Masks, we are encouraged by the groundwork we continue to lay, and the results to date. Boat Rocker will continue to focus on building our pipeline of IP as we see that as an important part of our growth and future profitability.

For more information about Boat Rocker Media, please visit: www.BoatRocker.com

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