Michael Gokturk continues reiterating his same misleading and baseless claims while the Independent Directors focus on results
Vote Your WHITE and YELLOW Proxies by October 20, 2017
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VANCOUVER, Oct. 13, 2017 /CNW/ - Messrs. Lance Tracey, Marc Levy and Roger Hardy (the "Independent Directors"), independent directors of Payfirma Corporation ("Payfirma" or the "Company"), have released a letter to shareholders announcing their strategic plans for Payfirma and correcting Michael Gokturks' wild and baseless allegations and misleading information. The Independent Directors continue to uncover more and more details relating to Michael Gokturk's so-called "Liquidity Pathway Transaction" and the parties behind it and intend to set the record straight in due course. While the Independent Directors continue to act prudently in communicating the facts to shareholders, Michael Gokturk has decided, with the support of John Rante and Ryan Holmes (collectively with Michael Gokturk, the "Paid Directors"), to pursue a one-dimensional desperate tirade to consummate his ill-conceived "Liquidity Pathway Transaction" for the sole benefit of him and his friends.
There are at least five Payfirma shareholders that are also shareholders of the private or public company (the "Potential Acquiror") on the other side of the proposed "Liquidity Pathway Transaction", and their links with brokerage firms and various finance scandals which Michael Gokturk has conveniently and deceptively omitted from all of his self-salutary shareholder letters, news releases and other shareholder materials will come to light soon enough. Michael's "leadership", exemplified by his gross mismanagement of the Company and squandering of approximately $12 million of investors' money, has diminished Payfirma's value to the point at which this proposed "Liquidity Pathway Transaction" is the only exit strategy he could identify. He has convinced the other Paid Directors that there is no other option available. The Independent Directors disagree, and have put forward their own plan in a letter to shareholders, a full copy of which is set out below.
The Independent Directors were aware of the conflicts and risks associated with Michael's proposed transaction and the Potential Acquiror and attempted to deal with it at the board level. Michael Gokturk, instead, decided to jeopardize Payfirma's future through a public battle, and hide the truth.
The Independent Directors have already been advised by certain of the largest shareholders of Payfirma that they intend to vote in favour of their proposal to remove the Paid Directors. Management of Payfirma has told the Independent Directors that they are "horrified by Gokturk's latest actions" and have indicated that they will vote with the Independent Directors. The Independent Directors will continue to put the truth forward to shareholders and seek their support. Payfirma and its shareholders deserve more than simply enriching Michael Gokturk and his friends.
The Independent Directors therefore recommend that shareholders protect their investment in Payfirma and vote their WHITE and YELLOW proxies today. A vote for the WHITE and YELLOW proxies is a vote to invest alongside the Independent Directors with a long track record of successful divestiture transactions and with no hidden agenda.
Dear Fellow Payfirma Corporation Shareholders,
As you have now seen, we have called a special meeting of shareholders of Payfirma to remove Michael Gokturk, John Rante and Ryan Holmes from Payfirma's board of directors. Some of you may be wondering what our overall plan is and why you should support our plan instead of Michael Gokturk's. Our plan is to remove Michael Gokturk as CEO and to empower the current leadership group led by Kalle Radage in order to continue to drive positive change at Payfirma. Let us be clear – Michael Gokturk does not have a viable plan for shareholders, we do.
A Real Path Forward
We, like you, are shareholders and have invested approximately $3.5 million of cash into Payfirma and own 14.2% of the issued shares. Our ultimate goal, like yours, is a liquidity event that adequately values our investment in Payfirma. We recognize the collective investment that shareholders have made in Payfirma and are committed to strengthening Payfirma's business and bringing you a viable option for an actual liquidity event. It is only with a strong underlying business that Payfirma's shareholders will be able to realize the fair value of their investment in Payfirma.
We believe in the leadership of Payfirma's President, Kalle Radage, and are committed to Payfirma's financial success. It is that belief that has led us to work diligently with Mr. Radage over the past year to improve Payfirma's operations and reduce costs. This will enhance the value of the company in an ultimate liquidity transaction. Alternatively, you could support Michael Gokturk's actions which have diminished the company's value and positioned the company for a dilutive offer. We strongly believe that we can generate a real bid for Payfirma that is accretive to shareholders. In fact, it is no coincidence that we, the Independent Directors, have already been approached by an arm's length mobile payments technology and point of sale solutions company based in New York that is interested in a business combination transaction with Payfirma. This company was established in 2013 and is backed by leading venture capital firms and angel investors. We have not advanced this opportunity as we are awaiting the outcome of the shareholders vote.
Under Kalle Radage leadership, Payfirma achieved many major milestones:
- adding new banks and credit unions to its portfolio of partners in the past year,
- reducing operating expenses by 35%, and
- achieving 30% revenue growth.
- Payfirma is on track to achieve gross profit of approximately $600,000 in fiscal 2017.
Payfirma has made great progress in 2017. The company stopped the cash hemorrhage that prevailed under Mr. Gokturk's reign, which in late 2015 amounted to a burn rate of $900,000 per month. Once we shifted Payfirma's leadership to Kalle Radage, the company saw immediate results and has since achieved many major milestones and is on track to achieve gross profit of approximately $600,000 in fiscal 2017. The Independent Directors would like to continue to work with Payfirma's management to improve financial results and the underlying business while identifying and negotiating a real liquidity transaction for all shareholders.
Can Payfirma Succeed Without Michael Gokturk?
Yes, we strongly believe that Payfirma will thrive without Michael Gokturk impeding the growth and potential of the company. As explained above, Kalle Radage has turned Payfirma around and it is well known within Payfirma that it is Mr. Radage, not Mr. Gokturk, who is in charge and has been leading the company since 2017. Michael Gokturk has been absent from Payfirma's offices for months at a time and is not involved with Payfirma's day to day operations or its strategic direction.
It is our belief that Payfirma will be a stronger and more valuable company without Michael Gokturk's involvement or that of the other two directors who support him and his desire to recklessly find an exit for the company without being fully transparent about his "pathway to liquidity" transaction.
Michael Gokturk's Fictitious "Pathway to Liquidity"
Michael Gokturk mismanaged Payfirma which is evidenced by the lack of progress made with the $13 million that was invested by shareholders in 2015. Rather than focusing on getting Payfirma back on track, Mr. Gokturk has devoted his time, rather unsuccessfully, to finding a "liquidity transaction".
Only after commencing legal proceedings, we became aware on October 3 that at least five shareholders of Payfirma are on both sides of the transaction being proposed by Michael Gokturk. It is these shareholders who will benefit from the proposed transaction, not regular Payfirma shareholders.
The proposal that Michael Gokturk has presented to you is a sale for shares of a private start-up company that will be very dilutive to Payfirma shareholders and requires a follow-on going public transaction that will be even further dilutive. If you do not own shares in the private start-up company, the value of your shares in Payfirma will be severely diminished while certain other shareholders receive an undisclosed ancillary benefit.
Lack of a Plan
Michael Gokturk does not have a viable plan for shareholders of Payfirma and has yet to present anything resembling a commercially reasonable transaction to the Independent Directors. It is evident through his ill-advised pursuit of this transaction, that he has given up on Payfirma and its shareholders and wants only to sell Payfirma at a fire sale price to his friends who do not have your best interests in mind.
Supporting the Independent Directors is Your Best Bet
Payfirma is not in financial distress and is not in need to pursue simply any transaction available, particularly one that devalues the company and is exceptionally dilutive to shareholders. We feel that it is the best course of action to grow Payfirma's business and increase profitability while searching for a liquidity event that fairly values the business. This is a much more reasoned plan to achieve a viable liquidity event than what Mr. Gokturk has proposed, which is a plan to sit idle and sell the company at a deep discount.
We assure you that Payfirma does have a bright future and the right approach is to support the Independent Directors and the management team in their continued turnaround of Payfirma.
It is with this solid footing that Payfirma would be better positioned to seek consolidation opportunities with other public companies, thereby providing a true liquidity event for all shareholders, including ourselves.
You have now received our information circular and the related White and Yellow proxies. We will be reaching out to you directly over the next week. In the meantime, we welcome the opportunity to speak openly about Payfirma with you as a fellow shareholder. Please feel free to contact us at any of the numbers set forth below.
VOTE YOUR WHITE AND YELLOW PROXY TODAY. The deadline to vote is 10:00 am (PDT) on Friday, October 20, 2017.
Your Independent Directors
SOURCE Payfirma Independent Directors
For further information: Questions or requests for assistance with voting may be directed to the Proxy Solicitor for the Independent Directors: Laurel Hill Advisory Group: North America Toll Free: 1-877-452-7184 | Collect Calls Outside North America: 416-304-0211, Email:email@example.com