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

This press release is issued pursuant to Multilateral Instrument 62-104 - Take-Over Bids and Issuer Bids and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues in connection with the filing of an early warning report dated October 8, 2020

EDMONTON, AB, Oct. 8, 2020 /CNW/ - Concerned shareholders (the "Concerned Shareholders") of Rifco Inc. ("Rifco") (TSXV: RFC), led by 933672 Alberta Ltd., Tim Peterson, Ruth Peterson, Sorbrick Capital Corp., 812787 Alberta Ltd., Big Country Holdings Ltd.,  Norman Storch and Jeffrey Newhouse, announced today four director nominees that the Concerned Shareholders intend to propose for election to the board of directors of Rifco at the company's annual general and special meeting of shareholders to be held on Friday, December 11, 2020 (the "Meeting").

Principal Concerns

The Concerned Shareholders, which currently exercise control or direction over an aggregate of 9,132,582 common shares in the capital of Rifco ("Common Shares") (representing approximately 42,29% of the 21,597,483 outstanding Common Shares), believe that the current board of directors and management have underachieved in making strategic decisions that maximize shareholder value and are consistent with the best interests of Rifco. The Concerned Shareholders are confident about the merit, quality and value potential of Rifco's but believe that new leadership is required to bring better decision–making on strategic matters and to oversee management in improved operational efficiencies. As significant shareholders, the Concerned Shareholders have a vested interest in seeing these improvements realized.

The Concerned Shareholders have written to the current board of directors of Rifco Inc. reminding them of their fiduciary duties to all shareholders and warning them against entrenchment tactics in light of the proposed nominees. The Concerned Shareholders strongly cautioned the current board against taking any ill-considered actions including, issuing shares or other dilutive securities that could further entrench the board of directors or undertaking any material transaction that could dilute current shareholders or cause a material effect on the value of Rifco without a vote of shareholders.

The Concerned Shareholders are hopeful that, following the Meeting, a reconstituted board of directors comprised of the Concerned Shareholders' nominees will focus on thoroughly improving operational efficiencies as well as canvassing and evaluating strategic opportunities that are in the best interests of Rifco and its shareholders.

Names of the Concerned Shareholders' Director Nominees

At the Meeting, shareholders will be asked to vote on, among other things, the election of directors. The Concerned Shareholders are proposing a new slate of nominees to the board of directors of Rifco that will bring a fresh perspective and a decisive plan for capitalizing on value-creating opportunities for Rifco and its shareholders.

The Concerned Shareholders' replacement director nominees are Jared Priestner, Tim Peterson, Jeffrey Newhouse and Sean Aylward, each of whom is highly-qualified and well-known in the business community. Their backgrounds and relevant qualifications are set forth below under the heading "Relevant Qualifications of the Concerned Shareholders' Director Nominees".

Relevant Qualifications of the Concerned Shareholders' Director Nominees

Jared Priestner, CEO of Go Auto

Jared is a veteran of the automotive industry; growing up in a family in which the car business ran through their veins. Jared oversees the Go Auto conglomerate of dealerships that started in 1996 at his father's Edmonton Kentwood Ford dealership. Jared took leadership as President in 2007 and CEO in 2015. Jared brings a depth of automotive and leadership experience to the Company, overseeing more than 45 dealerships, that in 2019 generated revenues in excess of $3.0 billion; selling more than 50,000 vehicles. He has driven industry leading initiatives, having been the first to market with many of the customer benefits now seen as standard, including vehicle history reports, free lifetime engine warranties, and the elimination of documentation fees. Under Jared, Go Auto has seen the acquisition and integration of over 30 dealerships as well as expansion into complementary businesses, including automotive finance, insurance brokerage and real estate development.

Mr. Priestner, directly or indirectly, exercises control or direction over 3,909,824 Common Shares.

Tim Peterson, Chairman & CEO, Sorbrick Capital Corporation

Tim is a seasoned entrepreneur, opening his first retail location in 1983. In 2001 Tim successfully merged within The Brick network and continues to be involved to this day. Tim has been a long-time shareholder of Rifco, first acquiring shares of the Company during its inception in 2001. Tim's devotes a significant portion of his time to humanitarian causes, currently serving on the board of directors of Haitian Children's Aid Society.

Mr. Peterson, directly or indirectly, exercises control or direction over 3,500,758 Common Shares.

Jeffrey Newhouse, CPA, CA, MTax, CFP, 310S (Lvl II – Appr) - Chairman & CEO of Canadian Auto Repair Holdings Inc.

Jeffrey is known for his entrepreneurial abilities, innovative financial solutions, proven leadership skills and commitment to enhancing business growth and profitability.  A Chartered Professional Accountant, Certified Financial Planner, and expert on Canadian income tax law, holding a master's degree in this discipline, Jeffrey's true passion lies in Canada's automotive industry. Jeffrey is currently pursuing his Professional Automotive Technician certification with the Ontario College of Trades.  Prior to co-founding Canadian Auto Repair Holdings in 2016, Jeffrey was President & CEO of CTL Corp.  CTL was started in August 2010 out of the accounting office of Newhouse Rusin LLP. Over the next 5 years, CTL would grow into the largest privately-owned auto finance company serving non-prime credit consumers across Canada.  In 2015, CTL was acquired by Industrial Alliance (IAG:TSX) and has grown to become the 3rd largest non-prime auto finance company in Canada operating under the brand iA Auto Finance. Last year they surpassed $1 Billion in their portfolio up from $150,000,000 at the time of sale.

Mr. Newhouse, directly or indirectly, exercises control or direction over 532,000 Common Shares.

Sean Aylward, LL.B, LL.M,  Managing Director, FCT Holdings Inc.

Sean is a seasoned entrepreneur and currently the Managing Director of a privately held company that is involved in early stage investments in enterprises including specialty finance and lending, real estate, agricultural technologies and IPTV. He serves a board member and adviser to numerous private companies. Prior to his business career he was a senior Partner in the Tax Department of Osler Hoskin & Harcourt LLP, primarily focused on commodity taxation, customs and related cross-border matters.  Sean co-owned and served as a Director of Riverfront Medical Services, at the time one of Canada's largest privately owned third party medical assessment companies.  Sean graduated with a B.A. from the University of Ottawa in 1982. He obtained his LL.B. from Osgoode Hall Law School in 1985 and his LL.M. from the London School of Economics in 1988. Sean is a member of the Law Society of Ontario..

Messrs. Priestner and Peterson are long-time shareholders of Rifco and their respective acquisition and dispositions of Common Share have been previously reported on the System for Electronic Disclosure by Insiders (SEDI) at www.sedi.ca.  Mr. Storch is also a long-term shareholder of Rifco and acquired the 1,190,000 Common Shares that he currently holds through participation in previous Rifco financings and various transactions on the secondary market.  Mr. Newhouse previously acquired the 532,000 Common Shares that he currently holds through various transactions on the secondary market.

The Concerned Shareholders believe in the significant potential of Rifco. In order to maximize this potential, however, the leadership of Rifco must, among other things: be more ambitious with its goals and vision for the company; and demonstrate a greater willingness to solicit, procure, consider and explore all proposals and corporate opportunities, with a view towards advancing Rifco's business and maximizing shareholder returns.

This press release does not constitute a solicitation of proxies, and is being issued in accordance with the "early warning" requirements under applicable Canadian securities laws. Each of the Concerned Shareholders may, and reserves the right to, acquire or dispose of securities of Rifco as circumstances warrant; and is carefully considering all legal options and remedies available to it as a shareholder of Rifco.

The Concerned Shareholders are not soliciting proxies in connection with the Meeting at this time. The Concerned Shareholders have retained Shorecrest Group Ltd. ("Shorecrest") as it strategic shareholder communications and proxy advisor. Shorecrest's responsibility will include providing strategic advice and advising the concerned shareholders with respect to the Meeting and proxy protocol. Shorecrest's responsibilities will also include soliciting shareholders should the Concerned Shareholders commence a formal solicitation of proxies.

The above-referenced early warning report relating to this press release has been filed on System for Electronic Document Analysis and Review (SEDAR) at www.sedar.com under Rifco's issuer profile.

SOURCE Concerned Shareholders of RIFCO INC.

If you would like to obtain a copy of the early warning report, or if you have any questions in respect of the contents set forth herein, please contact: Shorecrest Group Ltd., by phone at 1-888-637-5789, collect call outside North America at 1-647-931-7454 or by email at [email protected]