The Future of Your Investment
Will Be Determined by the Outcome of this Vote
Vote Your WHITE and YELLOW Proxies by October 20, 2017
- visit www.ourpayfirma.com -
VANCOUVER, Oct. 10, 2017 /CNW/ - Messrs. Lance Tracey, Marc Levy and Roger Hardy (the "Independent Directors"), independent directors of Payfirma Corporation ("Payfirma" or the "Company"), announce that they have called a special meeting of shareholders of Payfirma to be held at 10:00 a.m. (PDT) on October 24, 2017 (the "Special Meeting"), at the offices of Sangra Moller LLP, Suite 1000, 925 West Georgia Street, Vancouver, British Columbia, to vote on the following matters:
- removing Michael Gokturk, Ryan Holmes and John Rante (the "Paid Directors") as directors of the Company;
- fixing the number of directors of the Company at three directors; and
- reimbursing the Independent Directors for their expenses reasonably incurred in requisitioning, calling and holding the Special Meeting.
The Independent Directors are significant investors in Payfirma who in aggregate have invested approximately $3.5 million in cash, whereas two of the three Paid Directors have not invested significant or any cash into the Company. Ryan Holmes, for example, owns no shares in Payfirma. Further, unlike the Paid Directors, the Independent Directors are not paid for their work at Payfirma and are truly independent and have the best interests of shareholders in mind.
The Independent Directors recommend voting FOR each of the matters listed above. Shareholders have been mailed a WHITE proxy to be used in connection with the Special Meeting. In order to be counted at the Special Meeting, the WHITE proxy must be received by Laurel Hill Advisory Group ("Laurel Hill"), who the Independent Directors have retained as proxy solicitation agent, prior to 10:00 a.m. (PDT) on Friday, October 20, 2017.
Reasons to vote FOR the WHITE proxy:
- Michael Gokturk's so called "Liquidity Pathway Transaction" guarantees NO liquidity to Payfirma's shareholders, which he admitted in his proxy circular
- The "pathway" transaction is not in ALL shareholders' best interest. At least 5 shareholders will benefit from being on both sides of the "Liquidity Pathway Transaction"
- The fate of Payfirma to seek liquidity would be put in the hands of a startup private company launched only in the last year with negative cash-flow and no meaningful revenue
- Michael Gokturk as CEO has squandered $12 million of shareholders' investment over the last 2 years, has been mostly absent from Payfirma's offices since January 2017 and cannot be trusted to lead Payfirma to a successful liquidity event.
A Real Path Forward
Under the stewardship of the Independent Directors, Payfirma would seek consolidation opportunities with other public companies, providing a true liquidity event for all shareholders. The Independent Directors who, combined, have successfully completed more than $1.5 billion in successful divestitures in the past 5 years, will be seeking in short order a true liquidity transaction, not an insider deal with a group of "friends" as Michael Gokturk has orchestrated.
Payfirma is not in financial distress or in need to pursue simply any transaction available, particularly one that devalues the Company and is exceptionally dilutive to shareholders. The Independent Directors cannot support sitting idle and betting on the management team of the potential acquirer under Michael Gokturk's proposed "liquidity pathway transaction", particularly when the Independent Directors are confident that better options more reflective of Payfirma's value are available.
The transaction proposed by Michael Gokturk to the directors of Payfirma IS NOT A LIQUIDITY transaction. Instead, it is a proposed sale to a private company owned by a group of Mr. Gokturk's friends at a significant discount to the fair market value of the Company. There is no basis to suggest that there is a "prospect of a liquidity event" after Payfirma shareholders have lost control of their Company. Mr. Gokturk has attempted to "spin" a story for the shareholders with his proxy circular, using grandiose language and promise of "a path to liquidity".
Shareholders need to know: there is no liquidity contemplated in Michael Gokturk's proposal, other than being acquired by a start-up private company launched only in the last year, with negative cash-flow and no meaningful revenue. Mr. Gokturk, with the support of the other Paid Directors, is attempting to sell shareholders on the hope (not a commitment) that one day this might become a public company, and with no compensation to Payfirma shareholders if this does not occur. It is contemplated that the private company would then be re-sold to a public company, which would not end well for shareholders.
Lack of Performance
Michael Gokturk has demonstrated poor performance as CEO of Payfirma and an inability to grow the Company. He spent $12 million during the past 2 years realizing limited growth and no earnings. His spending spree resulted in a burn rate of approximately $900,000 per month in late 2015. The business has been an enormous disappointment under the leadership of Michael as CEO and John Rante as Chairman, with a mere $3.8 million of revenues for 2016.
Unapproved Excessive Spending
More than $15 million of shareholder funds have now been spent at Payfirma with little to show for it. That is why at the start of this year the Independent Directors, who are also investors and have contributed more than $3.5 million to the Company, sought to hold Michael Gokturk accountable for the lack of progress and shifted operational responsibility for the Company to Kalle Radage, who was named President. Under Mr. Radage's leadership, the Company has achieved break-even cashflow, achieved many major milestones, such as adding new banks and credit unions to its portfolio of partners, and re-positioned the Company for significant upside potential.
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.
Shareholders have also been mailed a YELLOW proxy in respect of the special meeting called by Mr. Gokturk at 2:00 p.m. (Vancouver time) on October 24, 2017 (the "Second Meeting"). The Independent Directors recommend voting AGAINST all matters proposed by Mr. Gokturk to be voted on at the Second Meeting. In order to be counted at the Second Meeting, the YELLOW proxy must be received by Laurel Hill prior to 2:00 p.m. (PDT) on Friday, October 20, 2017.
Further particulars relating to the Special Meeting are provided in an information circular that, together with the notice of meeting and forms of proxies, was sent to shareholders on October 9, 2017. The Independent Directors urge shareholders to read the information circular, which includes an important message from the Independent Directors, in its entirety. Copies of these materials and other information are available at www.ourpayfirma.com.
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
SOURCE Payfirma Independent Directors