CF Energy Files Management Information Circular and Recommends Re-Election of Existing Directors

TORONTO, Oct. 08, 2020 (GLOBE NEWSWIRE) -- CF Energy Corp. (TSX-V: CFY) ("CF Energy" or the "Company") today filed and mailed a Management Information Circular (the "Circular") to shareholders of the Company in respect of its upcoming annual meeting of shareholders to be held on October 29, 2020 (the "Meeting"). The Board of Directors recommends that shareholders vote for the re-election of the existing directors of the Company.

One of the Company's shareholders, 11882716 Canada Inc. (the "Nominating Shareholder"), which holds 20,000 common shares of the Company, has notified the Company of its nomination of six individuals for election as directors at the Meeting, including five new directors (the "Dissident Nominees") and existing director Hui Cai. In response to the actions of the Nominating Shareholder, the Board of Directors has formed a special committee of independent directors (the "Special Committee") that excludes Hui Cai and members of management, Ann Lin and Frederick Wong, to consider and advise the Board of Directors with respect to matters relating to the Meeting.

The Board of Directors recommends that shareholders vote for the re-election of the existing directors for the following reasons:

• The Nominating Shareholder Has Made a Limited Investment in the Company ? The Nominating Shareholder holds only 20,000 common shares of the Company, representing approximately 0.03% of the 65,463,155 issued and outstanding common shares and having a market value of less than $12,000. Through this limited investment, the Nominating Shareholder seeks to achieve control of the Company through the election of the Dissident Nominees, as well as the appointment of a new interim Chief Executive Officer ("CEO") of the Company.
• The Dissident Nominees Have No Plan ? The Dissident Nominees have not provided any information regarding their plans for the Company, or the continued execution of its strategy. Their election would create uncertainty among the Company's customers and business partners and its long-established government contacts, which would be detrimental to the Company's relationships with these parties.
• The Nominating Shareholder Has Not Previously Raised Any Concerns with the Company ? The Nominating Shareholder has indicated that it has significant concerns regarding transparency and the governance practices of the Company's Board of Directors. The Nominating Shareholder has not previously raised any such concerns with the Company's Board of Directors or senior management, nor provided any information that would substantiate such concerns.
• The Dissident Nominees Lack Relevant Experience ? The Dissident Nominees have limited experience relevant to the business of the Company, or to acting as directors of a public corporation. The Company's long-term vision centers on expanding its capabilities in the smart and green energy sector, which represents the future of the energy industry. The Dissident Nominees do not appear to have any experience in this sector and no evidence has been provided to suggest that the Dissident Nominees would be in a position to maintain the existing transparency and corporate governance practices of the Company, let alone enhance them. For example, the Ontario Securities Commission suspended the personal registration of one of the Dissident Nominees, Jian "Bob" Guo, in connection with the suspension of the exempt market dealer registration of a company that was found to have an inadequate compliance system and for which Mr. Guo acted as chief compliance officer.
• Misrepresentation of One of the Dissident Nominee's Roles with the Company ? The Nominating Shareholder has stated that one of the Dissident Nominees, Zhipei Lin, previously acted as Chairman of Sanya CF NEI, an investment holdings subsidiary of the Company. However, Mr. Lin has never had any material involvement with such company.
• The Nominating Shareholder Has Not Contacted Director Hui Cai ? In addition to nominating the Dissident Nominees, the Nominating Shareholder has also nominated Hui Cai, a current director of the Company. Mr. Cai has advised the Company that he has received no communication from the Nominating Shareholder or the Dissident Nominees, nor any information concerning the Dissident Nominees or their plans for the Company, and does not know the Nominating Shareholder or any of the Dissident Nominees other than Zhipei Lin, the younger brother of Ann Lin. In light of this, and based on Mr. Cai's confidence in the current directors of the Company, the strategy for the Company that they have overseen, and the effectiveness with which they have worked with the long-term management of the Company, Mr. Cai has advised the Company:

"The dissident party did not communicate with me prior to their nomination [and] I believe the existing directors of the Company are best suited for the development of the Company. Therefore, to be recommended by a dissident party who believes another board is a better choice is inconsistent with my views... I must respectfully decline the appointment of the dissident party and will not continue as a director if the dissident nominees are elected as directors of the Company."

• The Nominating Shareholder Has Not Contacted Yan Li ? The Nominating Shareholder has indicated that if the Dissident Nominees are elected, it intends to appoint Yan Li, a current member of management of the Company, as interim CEO. Mr. Li has advised the Company that he has received no communication from the Nominating Shareholder or the Dissident Nominees, and will not consent to becoming interim CEO if the Dissident Nominees are elected, stating:
  

"I was surprised to learn that I was nominated... I did not know previously of this nomination, no one has previously communicated with me regarding this matter, and I reject this appointment [and] fully support our current CEO Ann Lin as well as the current board."

• Management Does Not Support the Dissident Nominees ? Long-serving senior management of the Company, including CEO Ann Lin, have advised the existing directors of the Company that they support the existing directors and the Company's current strategy, and that they are not prepared to serve in the event that the Dissident Nominees are elected. The absence of Company management would negatively affect the Company's business, including its long-established relationships with Chinese government officials, business partners and customers on which the continued growth of the Company's business is dependent. In a statement to the Board of Directors, senior management indicated:
  

"The management team of CF Energy support Ann Lin and the current Board of Directors. We do not support the actions of the dissident group and we do not believe that their nominated directors can effectively lead and bring any value to the company... For the good of the Company and all shareholders, we implore you to support Ann and the current Board."

• The Existing Directors Are Committed to the Company's Growth Strategy ? The existing directors are committed to continuing the growth of the Company through its diversification into an integrated energy provider. The Company's core business in natural gas distribution has generated a healthy cash flow that has provided a solid platform for the Company to pursue this long-term vision. Despite the pressures of the COVID pandemic, the Company made significant advances toward this strategy in 2019, including:
  

? Further developing its business relationship with the EDF Group and making significant progress in:

? establishing Electric Vehicle (EV) battery swap stations, and

? the construction, customer acquisition and financing (including the successful long-term loan financing of RMB 230 million) for the Haitang Bay Integrated Smart Energy Project, which is the largest scale such project and first of its kind in China.

? Leveraging its strong government relationships in Hainan and Guangdong to begin developing EV battery swap station initiatives in Hainan Island and Zhuhai with another Fortune 500 partner, BAIC Motor, the leading company for the pure electric passenger car business in China.

In summary, the lack of information provided by the Nominating Shareholder's regarding its plans for the Company and its lack of communication with the Company and its shareholders, and even Director Hui Cai as its nominee and Mr. Li who it has proposed as interim CEO, point to a disregard for the interests of the Company and its shareholders, and an opportunistic attempt to seize control of the Company that shareholders should not support.

To the extent that additional information is received regarding the Dissident Nominees and their respective backgrounds, the Special Committee will consider such information and the Company will provide further comments with respect to the Dissident Nominees.

Shareholders are encouraged to read the accompanying Circular and check the Company's website www.cfenergy.com for updates.

Your vote is important, please take the time to vote your proxy in advance of the Meeting. Shareholders are asked to vote in sufficient time for their proxy to be received by Computershare Investor Services Inc. or the Corporate Secretary of the Company not later than October 27, 2020 at 10 a.m. (Toronto time), or in the case of any adjournment of the Meeting, not less than 48 hours, Saturdays, Sundays and holidays excepted, prior to the time of the adjournment.

Shareholders of the Company that have additional questions regarding the information contained in the Circular or would like assistance in voting their shares may contact the Company's proxy solicitation agent, Shorecrest Group Ltd. ("Shorecrest"), by phone at 1-888-637-5789, collect call outside North America at 1-647-931-7454 or by email at [email protected].

Shorecrest will utilize the Broadridge QuickVotetm service to assist NOBOs with voting their shares. NOBOs may be contacted by Shorecrest to conveniently obtain a vote directly over the telephone.

About CF Energy Corp.

CF Energy Corp. is a Canadian public company currently traded on the Toronto Venture Exchange ("TSX-V") under the stock symbol "CFY". It is an integrated energy provider and natural gas distribution company (or natural gas utility) in the PRC. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy to its customer base in the PRC. In 2009, CF Energy was recognized as being one of China's the Top Ten Most Influential Brands in the Natural Gas Industry and in 2019, ranked amongst the 2019 TSX Venture 50 top performers on the TSX-V for the 2018 year. 

Contact Information

Corporate Investment Relations
[email protected]

Charles Wang
Executive Assistant to CEO & Chair of the Board
[email protected]

Frederick Wong
Director of the Board
[email protected]

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively, "Forward-Looking Statements"). All statements, other than statements of historical fact, included or incorporated by reference in this document are Forward-Looking Statements, including statements regarding activities, events or developments that the Company expects or anticipates may occur in the future, including the election of the Dissident Nominees creating uncertainty with respect to the Company's long-established government relationships and among the Company's customers and business partners that would be detrimental to such relationships, the fact that the smart and green energy sector represent the future of the energy industry and the absence of Company management negatively affecting the Company's business and long-standing relationships on which the Company's growth is dependent. These Forward-Looking Statements can be identified by the use of forward-looking words such as "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words or the negative thereof. No assurance can be given that the plans, intentions or expectations or assumptions upon which these Forward-Looking Statements are based will prove to be correct and such Forward-Looking Statements included in this news release should not be unduly relied upon.

Although management believes that the expectations represented in such Forward-Looking Statements are reasonable, there can be no assurance that such expectations will prove to be correct. Such Forward-Looking Statements are not a guarantee of performance and involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such Forward-Looking Statements. These factors include, without limitation, no significant and continuing adverse changes in general economic conditions or conditions in the financial markets. Readers are cautioned that all Forward-Looking Statements involve risks and uncertainties, including those risks and uncertainties detailed in the Company's filings with applicable Canadian securities regulatory authorities, copies of which are available at www.sedar.com. The Company urges readers to carefully consider those factors.

The Forward-Looking Statements included in this news release are made as of the date of this document and the Company disclaims any intention or obligation to update or revise any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation. This news release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein and accordingly undue reliance should not be put on such.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.