Payfirma Corporation CEO Calls on Shareholders to Break Board Impasse and Move Payfirma Towards Liquidity

• Michael Gokturk, CEO, Co-Founder, and director at Payfirma Corporation advises shareholders Payfirma is unable to move forward with a divided Board created by three obstructing directors
• Mr. Gokturk has released an information circular and launched a website www.YourPayfirma.com and Twitter account @YourPayfirma to keep shareholders up to date with latest news, developments, and all relevant information

VANCOUVER, Sept. 26, 2017 /CNW/ - Michael Gokturk, CEO, Co-Founder and director at Payfirma Corporation ("Payfirma"), and owner of 9.29% of its outstanding shares, has released an information circular in respect to the special meeting of shareholders of Payfirma scheduled for Tuesday, October 24, 2017 (the "Meeting"), outlining the steps required to ensure shareholders are able to participate in a potential liquidity event.

Shareholders are urged to read Mr. Gokturk's circular and then vote the BLUE form of proxy to remove the three obstructing directors, Roger Hardy, Marc Levy, and Lance Tracey, from the Board; elect Paul Pathak as director; and to fix the number of Directors at four. Mr. Gokturk is appreciative of the significant unsolicited support he has received from Payfirma shareholders to date. Shareholders are urged to vote before the deadline of Friday, October 20, 2017 at 2:00 p.m. (Pacific time) / 5:00 p.m. (Toronto time). A copy of the proxy circular can be found at www.YourPayfirma.com.

Payfirma's circular makes it abundantly clear that the three obstructing directors, Mr. Hardy, Mr. Levy, and Mr. Tracey, are trying to seize control of Payfirma and advance a dilutive financing. They have drawn a line in the sand and obstructed Mr. Gokturk's efforts to advance a transaction that would move Payfirma towards liquidity and that would also enhance Payfirma's value and provide shareholders with the option of continued ownership. 

Shareholders with questions or who need help voting should contact Kingsdale Advisors at 1-855-682-2031 or 1-416-867-2272 outside North America or by email at [email protected]. For the latest news and updates, follow @YourPayfirma on Twitter.

A full copy of Mr. Gokturk's letter to shareholders from the circular is below:

Dear Shareholder:

You are receiving this circular because, as a shareholder of Payfirma Corporation ("Payfirma" or the "Corporation"), you have a very important decision to make regarding our future.

My name is Michael Gokturk and I am the CEO, Co-Founder and a director of Payfirma. Payfirma is a unique and innovative company and I own 9.29% of its outstanding shares. Payfirma has achieved incredible results thanks to shareholders like you who believed in our vision and supported us for the past seven years.

I have requisitioned  a special meeting of shareholders of Payfirma to be held on October 24, 2017 at 2:00 p.m. (PDT) / 5:00 p.m. (EDT) at the offices of Borden Ladner Gervais LLP, 1200 Waterfront Center, 200 Burrard Street, Vancouver, British Columbia (the "Meeting").

This is an important Meeting for shareholders of Payfirma because your investment in Payfirma is at risk. 

Liquidity – the best alternative for Payfirma

I have personally spoken with many of you over the years. And I know that the majority of you have invested your time and money in Payfirma with the reasonable expectation that Payfirma would undertake a liquidity transaction in the medium term. This would provide you with the opportunity to recoup your investment or hold shares in a larger entity that trade on a stock market. The good news is that Payfirma is closer than ever to a potential liquidity event that I believe is a great strategic fit for our Corporation and in the best interest of shareholders! The bad news is that just as this potential pathway to liquidity was in our grasp, the board became deadlocked over this fundamental issue. Three of our six directors, Roger Hardy, Marc Levy and Lance Tracey (the "Obstructing Directors"), have drawn a line in the sand and obstructed efforts to move Payfirma towards liquidity.

Dilutive Financing – the best alternative for the Obstructing Directors 

Instead of taking a liquidity option to shareholders for a vote, the Obstructing Directors have tried to seize control of the board and institute a self‑serving agenda. In particular the Obstructing Directors insist that the Corporation should: carry on with its current business model, despite its modest and constrained growth prospects; forego any near-term liquidity; and undertake one or more rights offerings, backstopped by Mr. Tracey – one of the Obstructing Directors.  Such a program would increase Mr. Tracey's ownership in the Corporation and dilute the shareholdings of those existing shareholders who for their own personal reasons may presently be unable to (or otherwise choose not to) participate in these offerings.

I cannot support this strategy.  Payfirma is currently operating on a cash-neutral basis and holds approximately $1.43 million in cash.  The proposed financing is not only unnecessary, but is self-dealing and benefits and entrenches a single director at the expense of other investors.  

Shareholders have already contributed enough to Payfirma.  They deserve a liquidity event, not a gun placed to their heads with a demand to cough up additional funds or face dilution.

Requisitioned Meeting - a last resort

As a Co-Founder, I care deeply about Payfirma and have always placed the Corporation's interests above my own.  In August of this year, I reduced my salary to $1.00 to ensure we had the funds to retain the sales/support employees we desperately need. I've asked you to invest in Payfirma and in turn I'm committed to investing in my team to ensure we can meet our demands and grow.

Requisitioning a meeting to remove the Obstructing Directors was certainly not my first preference.  I greatly respect our board members and consider them all to be personal mentors.  For seven years we worked together closely to advance Payfirma's development and many of the board members stepped up personally when the organization needed funding.  They should be applauded for that.

To overcome the board deadlock I suggested a compromise: the transaction which has the best prospect of bringing about a near‑term liquidity event (the "Liquidity Pathway Transaction") would be advanced to the point where it could go to you, our shareholders and the owners of Payfirma, to approve or reject. But the three Obstructing Directors flatly opposed providing shareholders with any say on the future of Payfirma.

With no prospects for a compromise, I was faced with a difficult choice between honouring the Corporation's commitment to you to achieve liquidity and the starkly different and self-interested vision put forward by my friends and mentors, the Obstructing Directors.  In the end, I had no choice but to side with shareholders and fight for your rights. After all, it's because of your support that we've been successful thus far. 

For that reason, I have requisitioned the Meeting to allow you, the Corporation's owners, the opportunity to break the impasse on the board.

Once the three Obstructing Directors are removed by shareholders, I will work assiduously to move the Liquidity Pathway Transaction forward and bring it before shareholders for a vote.

Paul Pathak – a new independent voice for the board

To help Payfirma navigate our course after the Meeting, I have nominated Mr. Paul Pathak to be elected a director. His past experience will be a huge asset as Payfirma moves forward. Mr. Pathak has been a partner with the law firm of Chitiz Pathak LLP since 1996 and is a director of several public companies including Aumento Capital VI Corporation, Jackpotjoy plc and The Intertain Group Limited. As Mr. Pathak holds no shares, options or has any commercial relationship with Payfirma, myself or other board members, he would be an independent director of Payfirma.

Many of our shareholders know Mr. Pathak and he comes highly recommended as a potential board nominee by several of our shareholders who invested in our $13 million financing in June 2015.

Conclusion - the choice for shareholders

The choice before you at the Meeting is clear:  

pursue near-term liquidity for Payfirma's shareholders and
give shareholders a say on the future of their investment

DO NOT

keep Payfirma's shareholders locked into their investment
 and give shareholders no say on future dilutive financings that benefit insiders

I have great confidence that shareholders will make the choice I am recommending and join me on the path to a brighter future for their investment and the Corporation.

I look forward to seeing you at the Meeting and speaking with you about how we can secure the future of Payfirma and your investment together.

Your vote is important no matter how many shares you own.

We need your help now more than ever.

Protect your rights and protect your investment by voting your BLUE Proxy:

Shareholders are urged to vote before the deadline of

Friday, October 20, 2017 at 2:00 p.m. (Pacific time) / 5:00 p.m. (Toronto time).

To keep current with further developments and information about voting your shares, visit www.YourPayfirma.com.

If you have any questions or need assistance in voting your BLUE proxy, please contact my strategic advisory and proxy solicitation agent Kingsdale Advisors at 1-855-682-2031 toll-free in North America or 1-416-867-2272 outside North America, or by email at [email protected].

Yours very truly,

(signed) Michael Gokturk

Michael Gokturk
CEO, Co-Founder and Director

SOURCE Michael Gokturk

Kingsdale Advisors Contact, Ian Robertson, Executive Vice President, Communication Strategy, Kingsdale Advisors, Direct: 416-867-2333, 647-621-2646, [email protected]