News! - 3rd Press Release on Sedar July 15th, 2020 - CSG Concerned Shareholders Urge Karnalyte Resources Inc.
to Call Special Meeting Promptly
Time to Stop the Oppression of Karnalyte Shareholders by
Gujarat State Fertilizers & Chemicals Limited and the Interim CEO
• Concerned Shareholders welcome early expressions of support for their highly qualified and
experienced director nominees • Concerned Shareholders urge the current Karnalyte Board to promptly call and hold a Special
Meeting of shareholders to elect an independent board of directors • Concerned Shareholders urge shareholders to remain focused on the facts and to not be influenced by Karnalyte’s attempts to distract shareholders from the facts Saskatoon, SK, July 15, 2020 — A group of Karnalyte Resources Inc. (TSX: KRN) (“Karnalyte” or the "Company") shareholders (the “Concerned Shareholders”), owning not less than 5% of the issued and outstanding shares of the Company, thank those shareholders who have reached out to express support for the Concerned Shareholders’ four (4) nominees for election to the Karnalyte board of directors (the “Board”).
On July 7, 2020, the Concerned Shareholders requisitioned (the “Requisition”) the Board to call and hold a special meeting (the "Special Meeting") of shareholders for the purpose of replacing the Board with a new independent board capable of pursuing opportunities in the Saskatchewan agricultural and fertilizer industry available to the Company that have the potential to create value for all shareholders.
The Concerned Shareholders requested that the Board be constituted with six (6) members, four (4) of whom are highly qualified nominees to be proposed by the Concerned Shareholders, and two (2) of whom will be nominees of Gujarat State Fertilizers & Chemicals Limited (“GSFC”), in accordance with GSFC’s contractual rights to appoint nominees to the Board.
The Concerned Shareholders have requested that the Special Meeting be called and held promptly, and that it be called no later than July 28, 2020, as required by the Business Corporations Act (Alberta). Shareholder Support
Peter Matson, one of the Concerned Shareholders and amongst the five largest shareholders of Karnalyte, noted that
“We have received tremendous support from shareholders who have reached out to support the
proposed overhaul of the Board and to support our four extremely credible and qualified nominees, in aneffort to end the oppression, entrenchment and conflicts of interest that have plagued the Karnalyte Board over the past 18 months”.
Mr. Matson continued: “Karnalyte Shareholders are reviewing the facts set out by the Concerned
Shareholders and are coming to the same conclusions as the Concerned Shareholders that now is indeed the time to finally stop the oppression of Karnalyte shareholders by GSFC, its nominees on the Board and the Interim CEO.” Concerned Shareholders Urge the Board to promptly call the Special Meeting
and
To not distract Karnalyte Shareholders from the Facts
On July 13, 2020, Karnalyte issued a press release acknowledging receipt of the Requisition delivered by the Concerned Shareholders to Karnalyte on July 7, 2020 and indicated that they will “update shareholders in due course”. The Concerned Shareholders remind the Board that they have 21 days to call the Special Meeting after receipt of the Requisition and hope the Board does not reject the Requisition for spurious reasons merely to further entrench the Board.
Karnalyte goes on to state in the press release that “The Company’s priority continues to be the completion of the previously announced prefeasibility study and the work to engage a strategic consultant.” The Concerned Shareholders are urging the Board: • to determine that Karnalyte’s first priority is good corporate governance; • to call and hold the Special Meeting promptly and to refrain from any actions that would prevent
shareholders from exercising their legal rights and further entrench the Board; and • to not distract Karnalyte shareholders from the facts of the Board’s actions on corporate governance The Concerned Shareholders would like to know why the Board: • is hesitating in calling the Special Meeting? • has, for the past 18 month, refused to nominate an independent board of directors? • has, for the past 18 months, failed to comply with the most basic corporate governance principles?
Accordingly, in a formal letter (the “TSX Letter”) to the Toronto Stock Exchange (the “TSX”), the
Concerned Shareholders have asked the TSX to investigate the facts outlined by the Concerned
Shareholders in order to determine whether Karnalyte is, and has been over the past 18 months, in full compliance with TSX rules and regulations regarding composition of the board of directors and the audit committee. If not, then the Concerned Shareholders have asked the TSX to take appropriate regulatory action to compel Karnalyte to comply with its rules and regulations.
As further protection for shareholders, the Concerned Shareholders have provided a copy of the TSX Letter to the Ontario Securities Commission. Contacts Peter Matson, on behalf of the Concerned Shareholders and the Nominees, welcomes the opportunity to engage with fellow shareholders. Mr. Matson can be reached at peter.matson.bell@gmail.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 delivered the Requisition, there is currently no record or meeting date set for the Special Meeting and shareholders are not being asked at this time to execute a proxy in favor of the Nominees. In connection with the Special Meeting, the Concerned Shareholders may file a dissident information circular in due course in compliance with applicable securities laws.
The Concerned Shareholders are not soliciting proxies in connection with the Special Meeting at this time.The Concerned Shareholders may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of the Concerned Shareholders. Any proxies solicited by or on behalf of the Concerned Shareholders, or by any other agent, may be solicited pursuant to a dissident information circular or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under Canadian corporate and securities laws. Any such proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other
manner permitted by law.
The registered address of Karnalyte is located at 2100 Livingston Place, 222 3 Ave SW Calgary, AB T2P 0B4. A copy of this press release may be obtained on the Company’s SEDAR