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Subject: AVO

Todd Bonner corrects record in respect of misleading press release from Axion Ventures Inc.


VANCOUVER, BC, Sept. 22, 2020 /CNW/ - Todd Bonner issues this press release to correct the record in response to the misleading press release issued by Grant Kim, Interim CEO of Axion Ventures Inc. (Axion), on September 19, 2020.

In that press release, Axion announced that it had received a petition on behalf of Mr. Bonner and his wife Jess alleging, among other things, oppression in respect of his termination as Axion's CEO. Axion also announced that it had received a claim requiring Axion to repay various debts to Mr. Bonner, his wife and entities under their control. Axion's September 19, 2020 release states that the debt documentation detailing the debts owed to these entities as containing "irregularities", with no further detail or support for that allegation.

Axion's September 19, 2020 release is misleading insofar as it suggests that any of the debts claimed by Mr. Bonner and his affiliates are not repayable due to "irregularities". There are no irregularities. Axion's allegation is baseless. To the contrary, Axion's debts to Mr. Bonner have been disclosed in Axion's regular financial filings for years. Those loans were made to invest in Axion on favourable terms without diluting the interests of shareholders, and were meant to be repaid in the short-term. Mr. Bonner has provided Axion with loan documentation in support of each loan and proof of each loan being received in Axion's accounts in correspondence seeking repayment. Axion specifically requested support for the loans, but has declined to respond to Mr. Bonner's correspondence now that Axion has received such support. Accordingly, Mr. Bonner and his affiliates had no choice but to commence their repayment claim as Axion appears to have no interest in honouring its debt obligations.

Bonner's oppression claim

As noted in Axion's press release, Mr. Bonner and his wife have commenced an oppression petition in the BC Supreme Court in respect of various issues.

Earlier this year, Mr. Bonner, an Axion board member, attempted to raise with his fellow board members the possibility of converting debts owed to him personally or to affiliates to equity. Mr. Bonner was concerned that having significant debts on Axion's balance sheet would make it difficult to secure investment to finance the company's current objectives. Mr. Bonner and his affiliates were willing to convert net debt worth USD $9,132,023.52 to Axion common shares at market or below market rates in order to make the company more attractive to investment or transaction partners and to make sure its debt commitments did not hinder its ability to meet its current obligations.

Axion's other board members, and in particular Grant Kim, Yasuo Yamazaki and Steven Willey, declined these proposals, without meaningful explanation.

Further, at a July 14, 2020 board meeting, with no prior notice, they raised for the first time an anonymous email complaint in respect of Mr. Bonner. On the basis of the anonymous email  complaint, which was not investigated prior to the July 14, 2020 meeting, they purported to terminate Mr. Bonner as Axion's CEO and replace him with Kim, who has no experience for such a role. Mr. Bonner was not given an opportunity to address the allegations in the email, which are baseless.

The primary allegation raised in the email was the existence of various transactions involving Mr. Bonner's family's Axion shareholdings and debtholdings being vended into Monaker Group, all of which were publicly announced through official securities filings on July 23, 2020. Nothing about those transactions, which Mr. Bonner had taken steps to raise with the Axion board in advance, gives rise to any grounds for his dismissal. The balance of the allegations in the email are simply false.

Mr. Bonner anticipates that most of Axion's shareholders would expect, as he and his wife did, that his employment as Axion's CEO would not be terminated summarily without (a) advance notice of the complaint against him; (b) the appointment of a special committee; and (c) a proper investigation in which he would be given the opportunity to address the allegations leveled against him directly. The conduct of Messrs. Kim, Yamazaki and Willey left him no choice but to commence his petition to seek relief in the Courts to address their misconduct.

Yamazaki taking steps to entrench control

On July 30, 2020, Axion issued a press release announcing that the Company intends to complete a non-brokered private placement of up to 35,000,000 units at a price of $0.20 per unit for gross proceeds to the Company of up to $7 million. The release states that the entire placement was fully subscribed by Kuni Umi Asset Management, which is an investment vehicle controlled by Mr. Yamazaki.

To be clear, this private placement has not been approved by Axion's board of directors. Mr. Bonner has written to the TSX Venture Exchange to advise that the private placement has not been approved by Axion's board and therefore should not receive TSX Venture Exchange approval.

On July 27, 2020, Mr. Kim attempted to call a board meeting, ostensibly to discuss the issuance of a private placement. The notice for the meeting did not disclose the terms of any proposed private placement. Mr. Kim sent notice of that meeting to Mr. Bonner at 3:42am for a meeting to take place at 5:30am where Mr. Bonner lives. The clear intent of providing inappropriately short notice at that late hour was to prevent Mr. Bonner from attending the meeting. Mr. Kim also purported to send notice to another Axion board member to an email address that is not in use.

Mr. Bonner has requested minutes of any such meeting; none have been provided to him to date. If any board meeting was held on or around July 27, 2020, such meeting was invalid for lack of proper notice to the board.

Note that Mr. Bonner has also offered to extend financing to Axion on better terms than Mr. Yamazaki. The board has ignored all such offers to date.

Bonner commences debt claim

As noted above, Axion owes Mr. Bonner and his affiliates debts of USD $9,132,023.52. Mr. Bonner caused his family and companies under their control to loan significant sums of money to Axion over the past several years in order to allow Axion to meet its obligations and continue to make progress on game development. He did so on the expectation that he would carry on as Axion's CEO to see those development projects through.

Now that three of Axion's board members have purported to terminate him on fabricated grounds no investigation, Mr. Bonner is no longer prepared to allow this debt to remain outstanding. Mr. Kim has no qualification to be running a publicly-traded video game development company and Mr. Bonner has no faith that Axion will honour its debt commitments to him given the misconduct of Messrs. Kim, Yamazaki and Willey since July 14.

Mr. Bonner has maintained his offer to convert these debts to equity. Axion has asserted through counsel that Messrs. Kim, Yamazaki and Willey are considering this offer, but they have refused Mr. Bonner's repeated requests for a board meeting to discuss the proposal. Mr. Bonner believes they are simply not acting in good faith.

Setting the record straight

Mr. Bonner can no longer allow his reputation to be slandered by Messrs. Kim, Yamazaki and Willey as they act to entrench their control over Axion.

Axion's shareholders should be concerned by the company's current governance given that a majority of Axion's board has shown that it is prepared to disregard fairness, proper process and the corporate law in order to achieve its objectives. Shareholders should demand better from Axion's board. Mr. Bonner intends to do so in court.

SOURCE Todd Bonner


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