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Growmax Refuses To Call Requisitioned Shareholder Meeting

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Growmax Refuses To Call Requisitioned Shareholder Meeting

Canada NewsWire

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.

View original content: http://www.newswire.ca/en/releases/archive/August2018/09/c6508.html

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