TORONTO, April 15, 2020 (GLOBE NEWSWIRE) -- On April 8, 2020, Dealnet Capital Corp. (TSX VENTURE: DLS) ("Dealnet" or the "Company") issued a press release (the "Dealnet Release") in response to the nomination by Capital Partners Corporation ("Capital Partners") of four highly qualified nominee directors (the "Nominees") announcing the delay of Dealnet's 2020 Annual General Meeting of Shareholders (the "AGM") and providing no guidance for a new date. Dealnet is well aware that the AGM can be held through virtual technology which is how many other companies have been proceeding.
On April 9, 2020, Capital Partners formally requested that Dealnet provide additional details and confirm its intention to reschedule the AGM forthwith. Dealnet has not responded to this request. By not responding and delaying the AGM, the entrenched directors are continuing their historical trend of misdirection, lack of transparency and refusing to address the fundamental issues the Company is facing. This comes at a time when shareholders are demanding a voice and the entrenched directors are using the global COVID-19 pandemic as an excuse to prolong their egregious compensation and attempting to silence disaffected shareholders. Dealnet's directors must give shareholders a voice and be held to account for their numerous failures.
While the AGM is delayed, the damage continues. Dealnet is a seriously troubled, illiquid and orphaned penny-stock that is running out of time and cash. Immediate changes are needed to reduce director and management compensation and to focus the Company on real growth in order for the business to survive and thrive. Over the past 2 years the directors and management have pillaged cash from the business with "Corporate Salaries, wages and benefits" of approximately $7.7 million at a time when the Company has lost over $10 million and just last month had a 52-week low market capitalization of under $8.5 million ? 3 cents per share. At no time have the directors and management attempted to justify their compensation because there is simply no basis on which to do so based on any analysis of its industry peers.
The entrenched board continues to present misleading and badly skewed information which masks the reality of a finance company in "spiralling run-off mode" while the directors and management drain the business through their unconscionable remuneration. The leadership has a fundamental lack of understanding of this business sector and has continually failed shareholders. Brent Houlden became the Company's permanent CEO in April of 2018 when the board granted him and his daughter high salaried positions. He is a bankruptcy expert seemingly leading the Company toward his expertise. The entrenched directors' terribly flawed "plan forward" is misleading optimism cleverly disguised to distract from the terminal decline of the business. They will continue their mismanagement until shareholders are given a voice at the AGM.
In a blatant effort to deflect scrutiny of their mismanagement, the current Dealnet board has attempted to make unsubstantiated allegations from 2-year old litigation the "main event". Dr. Steven Small vehemently denies the false allegations in the Dealnet Release. The Dealnet Release states that Dr. Small was terminated on April 8, 2018 for cause, however, as set out in the Statement of Claim, his position as Executive Chairman was eliminated "without cause" on March 28, 2018 and at that time Dr. Small was welcomed to continue on as a director of the Company. Only after Dr. Small refused to accept an entirely inadequate termination package, did Dealnet first allege that his termination was for cause. To this day they have not substantiated any of their allegations even though they have had numerous opportunities to do so.
The current board's blatant misdirection about litigation distracts from severe problems at Dealnet. Their comments are unsubstantiated, unfounded and unproven and do not warrant further response until the matter can be put to rest. "My reputation and my decision to lead the Nominees' to build share value are far more important than righteous litigation. I have personally invested over $4.5 million in Dealnet for my approximately 15 million shares and my focus is clearly 100% aligned with all shareholders," said Dr. Small.
In the Dealnet Release, the entrenched directors have misstated Dr. Small's performance while he was a director of the Company. They have also failed to mention the long list of his positive contributions to Dealnet. During his tenure with Dealnet, Dr. Small was credited with raising over $60 million in institutional equity for the business and was instrumental in arranging over $120 million in debt financing, the only facilities still in use by the Company to this day. In addition, Dr. Small attracted research coverage from 7 leading analysts. Since Dr. Small's departure from the Company's board, Dealnet's share price has plummeted by approximately 50%, analysts dropped coverage, and liquidity has dried up. Shareholders are trapped.
The sophisticated Nominees have deep and specific industry experience and have a history of creating billions of dollars of shareholder value. "My high confidence in my Nominees is only increased by the current board's tactics. We will stop the decline of the business and implement a solid plan to grow the Company," shared Dr. Small. "The Nominees understand every aspect of this sector and have a solid plan to swiftly advance the Company's operations with profound industry expertise and connections."
The highly qualified Nominees collectively own more than 25 million shares of Dealnet. "Our collective interests are aligned with shareholders and we are convinced the business could face bankruptcy if change is not urgently made in the boardroom. It is our sole aim to save Dealnet for all disaffected, angry, ignored and exhausted shareholders," said Dr. Small. Capital Partners demand that a meeting date be set immediately and have the power to force a Special Meeting, if necessary. "Call the meeting," concluded Small.
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. Shareholders are not being asked at this time to execute a proxy in favour of the Nominees. In connection with the Company's annual meeting to be held, Capital Partners may file and mail a dissident information circular in due course in compliance with applicable securities laws.
Forward Looking Statement
This news release contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. All statements and information, other than statements of historical fact, included herein are forward-looking statements, including, without limitation, statements regarding activities, events or developments that Capital Partners expects or anticipates may occur in the future. These forward-looking statements can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words and expressions or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur or, even if they do occur, will result in the performance, events or results expected. We caution readers not to place undue reliance on forward-looking statements contained herein, which are not a guarantee of performance, events or results and are subject to a number of risks, uncertainties and other factors that could cause actual performance, events or results to differ materially from those expressed or implied by such forward-looking statements.
Readers are cautioned that all forward-looking statements involve known and unknown risks and uncertainties, including those risks and uncertainties detailed in the continuous disclosure and other filings of DealNet, copies of which are available on the System for Electronic Document Analysis ("SEDAR") at www.sedar.com. We urge you to carefully consider those risks and uncertainties. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Unless expressly stated otherwise, the forward-looking statements included herein are made as of the date of this news release and Capital Partners disclaims any obligation to publicly update such forward-looking statements, except as required by applicable law.
Dr. Steven Small
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