CONCERNED SHAREHOLDERS TO CONTEST DIRECTOR
ELECTIONS AT AGM
VANCOUVER, Aug. 9, 2018 /CNW/ - Further to the news release
issued July 6, 2018 by Kulwant Malhi and BullRun Capital Inc. (the
"Concerned Shareholders"), the Concerned Shareholders
announce that GrowMax Resources Corp. ("GrowMax" or the
"Company") (TSX-V: GRO) has refused to recognise their
requisition of a meeting of the shareholders (the "Requisitioned
Meeting") of GrowMax pursuant to Section 142 of the Business
Corporations Act (Alberta)
(the "ABCA") to elect new directors to the board of GrowMax
(the "Board"), in order to protect and preserve shareholder
interests (the "Requisition").
Entrenched Board Rejects Requisition
Pursuant to Section 142(4) of the Business Corporations
Act (Alberta), the Company had
twenty-one (21) days to call the Requisitioned Meeting. Instead of
responding to shareholder concerns and calling the Requisitioned
Meeting, GrowMax refused to recognize the Requisition and purported
to invalidate it by claiming the Concerned Shareholders had failed
to provide evidence that they were beneficial holders of
GrowMax shares. Under Alberta
corporate and securities law, beneficial shareholders are entitled
to requisition a meeting of shareholders, and no evidentiary
requirement exists and, even if such a requirement did exist, the
Company's own list of beneficial shareholders shows that
Kulwant Malhi, alone, is the
beneficial owner of more than 5% of the issued and outstanding
common shares of GrowMax. The Board, employing dubious legal
analysis, exhibited their clear intent to entrench and refuse to
consider shareholder concerns.
Advance Notice Policy
On July 30, 2018, the Company
announced the adoption of an Advance Notice By-Law. The
Concerned Shareholders view the adoption of this by-law, after
having received a valid requisition with sufficient information
regarding the director nominees of the Concerned Shareholders, as
another entrenchment tool being deployed by the Board. It is
oppressive and self-serving. The intent is clearly to throw
up additional obstacles to shareholders seeking to exercise their
legal rights.
Company Calls Annual and Special Meeting
The Company has given notice that it intends to hold an annual
general and special meeting of shareholders (the "Meeting")
on September 25, 2018. This is the
second time this year that the Company has given notice of an
annual meeting. The first such Meeting was cancelled at the whim of
the Board. Concerned Shareholders will propose a slate
of director nominees at the Meeting. Should the Company cancel or
further adjourn the Meeting, the Concerned Shareholders will
proceed with the Requisitioned Meeting, as they are entitled by law
to do, to prevent the Company's directors from shirking their
responsibilities to shareholders and further entrenching themselves
on the Board.
Although no special business for the Meeting has been announced,
shareholders should view with trepidation the calling of a special
meeting, and be prepared to hold the Board accountable for any ill
advised break fees or other costs while the mandate of the Board is
in question.
Reasons for Requisition and Alternative Slate
The Concerned Shareholders now have beneficial ownership or
control over approximately 23,630,500 common shares of
GrowMax representing more than 11% of the common shares of the
Company.
The Concerned Shareholders requisitioned a meeting, and believe
that removal and replacement of the Board is necessary, to preserve
shareholder value, which has been severely undermined by the
incumbent Board, in particular through their decisions to award
excessive salaries over the past several years, failure to advance
any existing projects of the Company, and inability to seek out new
growth opportunities for the Company. Without immediate
change, shareholders must expect further erosion in the value of
their shares as the Board and management continue to recklessly
deplete the Company's treasury.
Shareholder Questions
The Concerned Shareholders have engaged the services of Laurel
Hill Advisory Group ("Laurel
Hill") as its strategic adviser. Shareholders who have
questions may contact Laurel Hill
toll free at 1 (877) 452-7184, or by email at
assistance@laurelhill.com.
Additional Information
The information contained in this press release does not and is
not meant to constitute a solicitation of a proxy within the
meaning of applicable securities laws. Although the Concerned
Shareholders have requisitioned a meeting, and intend to propose an
alternative slate for election at the Meeting, shareholders are not
being asked at this time to execute a proxy in favour of the
Concerned Shareholder Nominees or any other resolution set forth in
the Requisition. In connection with the Meeting, the Concerned
Shareholders intend to file a proxy circular (the "Information
Circular") in due course in compliance with applicable
securities laws. Any solicitation of proxies by the Concerned
Shareholders will be conducted in accordance with applicable
securities laws.
GrowMax's head office is located at 1900 – 2 Bloor West,
Toronto, Ontario M4W 3E2
SOURCE BullRun Capital Inc.