Australis dissidents demands meeting to replace board
2020-08-31 10:39 ET - News Release
Mr. Terry Booth reports
CONCERNED AUSTRALIS SHAREHOLDERS TAKE DECISIVE ACTION TO MOVE AUSTRALIS FORWARD BY REQUISITIONING A SHAREHOLDER MEETING
Terry Booth, Lola Ventures Inc., Roger Sykes, 1703469 Alberta Ltd., Duke Fu, Green Therapeutics LLC and Jason Dyck of Australis Capital Inc. have requisitioned a meeting of the shareholders of Australis pursuant to Section 142 of the Business Corporations Act (Alberta) to, among other things, elect new directors to the board of Australis in order to protect and preserve shareholder's interests.
The Requisition demands that a meeting of the shareholders be held as soon as practical and no later than the November 17, 2020, date disclosed by the Board. The Concerned Shareholders now collectively own, direct or control 13,932,321 common shares or approximately 7.9% of Australis' outstanding common shares. Altogether, without having commenced a solicitation for proxies, The Concerned Shareholders already have indications of support from shareholders holding over 35% of Australis' shares.
IMMEDIATE BOARD CHANGE IS NEEDEED
As demonstrated by the Company's poor share price performance since inception, it is clear that an immediate change in leadership is required to protect shareholder value. The Concerned Shareholders, in an attempt to preserve the Company's resources, have made repeated efforts to negotiate with the incumbent Board of Directors (the "Board") to reach a settlement agreement resulting in a refreshed board comprised of individuals capable of leading Australis forward. Unfortunately, the Board has refused to engage in negotiations and has instead resorted to delay tactics in a clear effort to entrench themselves at the expense of serving shareholders' best interests. The Board has postponed, delayed and avoided direct discussions with the Concerned Shareholders, preferring instead backchannel discussions and obfuscation.
FAILURE TO COMMUNICATE WITH SHAREHOLDERS AND PROVIDE A CLEAR STRATEGY FOR AUSTRALIS
The Board has categorically failed in its duty to provide oversight and to effectively communicate with shareholders. We question why the Board continues to use delay tactics. Are the Board members concerned about a new board identifying breaches in fiduciary duties to shareholders which could result in reputational or legal consequences? The Board has also failed to address the numerous corporate governance concerns including the non-arm's length nature of the proposed transaction to acquire Passport Technology Inc. ("Passport"), questionable payments made to Passport, and whether or not the shareholder meeting, originally scheduled for September 22, 2020, was postponed by a properly called meeting of the Board. These governance lapses could not have occurred without the tacit and active involvement of the so-called independent directors of the Board, who continue to steer the ship toward disaster. Accordingly, removal and replacement of the Board is necessary, and the Board should not be trusted with proposing any new transactions or directors to shareholders given their abysmal track record to date. The Board has, time and again, failed to act in Australis shareholders' best interests and simply cannot be entrusted with the responsibility of proposing any new business or leadership to shareholders .
Over their two-year tenure at the helm of Australis, the current Board members have destroyed shareholder value through their failed pursuit of non-arm's length transactions, their inability to develop the Company's core cannabis assets, and their unwillingness to communicate a strategic direction to both shareholders and the market. Instead, the Concerned Shareholders believe a prosperous future for Australis is attainable only under the qualified, independent and motivated leadership of the Concerned Shareholder Nominees (as set forth in the Concerned Shareholders' press release dated August 17, 2020) who are better aligned with the interests of all shareholders. When the date for a meeting of shareholders is confirmed, the Concerned Shareholders will share their advanced and well thought out strategy with Australis shareholders and are excited about the opportunity to present a clear path forward for the Company.
TIME FOR ACTION
The Concerned Shareholders believe it is time to take decisive action. Since announcing the termination of the failed acquisition of Passport four weeks ago, the Board has failed to provide any guidance or direction to shareholders, and has continued their habit of lax governance and the pursuit of their own personal narrow self interest. Furthermore, while the Company announced in its August 20, 2020, press release that it has scheduled its annual general and special meeting of shareholders for November 17, 2020, nearly two weeks later, the Company has not taken the required steps for legally confirming this meeting date. Clearly, moving the Company forward and enabling shareholders to voice their legitimate concerns is not a top priority for the current leadership at Australis.
Further information with respect to the requisitioned meeting will be contained in an information circular to be mailed to Australis shareholders in advance of the meeting.
Additional Information
The information contained in this news release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. In connection with the Meeting, the Concerned Shareholders intend to file a dissident information circular in due course in compliance with applicable corporate and securities laws.
Notwithstanding the foregoing, the Concerned Shareholders are voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations (NI 51-102) and have filed a document (the "Document") containing the disclosure required under section 9.2(6) of NI 51-102 in respect of the Concerned Shareholder Nominees in accordance with corporate and securities laws applicable to public broadcast solicitations. The Document is available under the Company's profile on SEDAR at www.sedar.com..
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