Concerned Shareholders Announce Nominees to Replace the Directors of PesoRama Inc.

Toronto, Ontario–(Newsfile Corp. – November 16, 2020) – Concerned shareholders (the “Concerned Shareholders“) of PesoRama Inc. (“PesoRama“) led by The Ocean View Trust (“Ocean View“), a family trust of Rahim Bhaloo, the founder, a director and the former Chief Executive Officer of PesoRama, together with 2110958 Alberta Ltd., a company controlled by Mr. Bhaloo, announce that the Concerned Shareholders have notified PesoRama of their intention to propose four director nominees for election to the board of directors of PesoRama to replace five of its incumbent directors at PesoRama’s annual general and special meeting of shareholders (the “Meeting“) to be held on December 9, 2020.

Notice of Proposal

On November 10, 2020, in accordance with section 137 of the Canada Business Corporations Act (the “CBCA“), Ocean View submitted to PesoRama notice that it intends to make a proposal (the “Proposal“) at the Meeting that: (i) the following five incumbent directors of PesoRama be removed as directors: Charles Wachsberg, Edward Sivitilli, Allan White, Andrew Taylor and Robb McNaughton (collectively, the “Entrenched Directors“); (ii) the number of directors of PesoRama be fixed at four directors; and (iii) the following four individuals be elected as directors of PesoRama: Stephen Rosenberg, Rahim Bhaloo, Josef Arfin and Eric Lowy (the “Concerned Shareholder Nominees“), all in order to protect and preserve shareholder interests.

Entrenched Directors Ignore Notice of Proposal

The Concerned Shareholders understand that, in connection with the Meeting, management of PesoRama intends to solicit proxies for the election of the Entrenched Directors and to disregard the Concerned Shareholders’ Proposal to re-elect incumbent directors Rahim Bhaloo and Stephen Rosenberg and to elect the two other Concerned Shareholder Nominees. Mr. Bhaloo, the founder of PesoRama and Mr. Rosenberg have been instrumental in PesoRama’s success to date, but have recently been frustrated by the actions and inactions of the Entrenched Directors in their mismanagement of the business of PesoRama. The Entrenched Directors have squandered opportunities to advance PesoRama’s business, failed to properly manage and protect PesoRama’s available funds, have not properly observed expected corporate governance practices, and under their supervision, PesoRama has not achieved its key business objectives to raise additional financing, to complete its planned transaction with Skyscape Capital Inc. to achieve a listing of the resulting entity’s shares on a Canadian stock exchange, and to carry out the rapid expansion of its stores in Mexico. In this context, Ocean View submitted the Proposal and the Concerned Shareholders intend to nominate the Concerned Shareholder Nominees to put an end to the mismanagement of PesoRama’s business and to enable PesoRama to again continue to create value for its shareholders. To this end, on November 15, 2020, 2110958 Alberta Ltd. with the support of SPC Overseas (PTC) Inc. for itself and as trustee for on behalf of The Ocean View Trust, submitted to PesoRama its own notice that, at the Meeting, it intends to propose that shareholders pass a resolution fixing the fixing the number of directors to be elected at the Meeting at four and that it intends to nominate the Concerned Shareholder Nominees for election as directors of PesoRama.

Under the CBCA, a corporation that receives an eligible proposal is required to include it in its management proxy circular for the shareholders’ meeting and can reject a proposal and exclude it from its proxy circular only on the basis of certain specified procedural or substantive grounds, none of which are relevant with respect to the Proposal. However, since receiving notice of the Proposal, PesoRama has ignored repeated written requests by and on behalf of the Concerned Shareholders for confirmation that PesoRama will include the Proposal in its management proxy circular for the Meeting as it is required to do. The Concerned Shareholders are concerned that the Entrenched Directors, who represent five of the seven incumbent directors of PesoRama, plan to improperly reject the Proposal and fail to include it in PesoRama’s proxy circular for the Meeting in an effort to further entrench themselves, and to continue to deny shareholders of PesoRama their right to participate in meetings. Indeed, PesoRama has never held an annual meeting of its shareholders for the proper election of its directors and to place before them its annual financial statements, in each case, in violation of its legal obligations.

PesoRama’s inexcusable failure to respond to Ocean View regarding the Proposal and any refusal to include it in PesoRama’s management proxy circular will continue to be interpreted negatively by the Concerned Shareholders and other shareholders of PesoRama, and can be expected trigger the use of other necessary and more aggressive tactics by PesoRama shareholders. If PesoRama refuses to include the Proposal, Ocean View or another shareholder may apply to court to seek to force PesoRama to include it at a significant cost to PesoRama. Moreover, the Concerned Shareholders are also concerned that the Entrenched Directors may take other illegitimate actions to deny shareholders their right to nominate directors for election at the Meeting, even though there is no legal basis for so doing (in particular, since PesoRama has not notified its shareholders of any changes to its by-laws to provide for any advance notice requirements for director nominations). Any such other actions would also potentially result in legal action being taken to protect shareholders’ basic rights to nominate directors, resulting in significant unnecessary costs to PesoRama.

The Concerned Shareholders have beneficial ownership or control over 5,275,000 Class A common shares of PesoRama representing more than 11.49% of the Class common shares of PesoRama.

The Concerned Shareholders have engaged the services of Gryphon Advisors Inc. as its strategic adviser. Shareholders who have questions may contact Gryphon Advisors Inc. toll free at 1-833-261-9730 or by email at inquiries@gryphonadvisors.ca.

Additional Information

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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 corporate and securities laws. Although the Concerned Shareholders intend to nominate the Concerned Shareholder Nominees 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 any proposal described in this news release. However, the Concerned Shareholders expect to solicit proxies from PesoRama’s shareholders in connection with the Meeting, and in such an event, the Concerned Shareholders will send a dissident’s proxy circular in prescribed form stating the purposes of the solicitation and containing additional information about the Concerned Shareholder Nominees and other relevant proposed actions to each shareholder of PesoRama whose proxy is solicited if and as required under applicable laws.

For further information, please contact Rahim Bhaloo on behalf of the Concerned Shareholders:

By Email at rahim@rahimbhaloo.com
By phone: +1 416-816-3291.

Shareholders may also contact the Concerned Shareholder’s strategic adviser: Gryphon Advisors Inc. Toll Free: 1-833-261-9730 or Email: inquiries@gryphonadvisors.ca.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/68273