PesoRama Abandons Costly and Meritless Lawsuit - PesoRama Board, Losing Proxy Contest, Tries to Delay Shareholder Meeting - PesoRama Board has Yet to Present a Plan Because They Have None

• If you have not already done so, submit your GREEN proxy as soon as possible so that it may be deposited prior to the proxy cutoff of December 7, 2020
• Need help voting? Contact Gryphon Advisors for assistance at 1-833-261-9730 or by e-mail at [email protected]

TORONTO, Dec. 4, 2020 /CNW/ - Concerned shareholders (the "Concerned Shareholders") of PesoRama Inc. ("PesoRama"), led by The Ocean View Trust, a family trust of Rahim Bhaloo, the founder, a director and the former Chief Executive Officer of PesoRama, together with 2110958 Alberta Ltd., a company controlled by Mr. Bhaloo, would like to thank shareholders for the overwhelming support they have received from shareholders of PesoRama to date.  

The current Board is making a lot of noise by raising technical issues that have no substance, launching expensive and frivolous lawsuits at shareholder expense which they ultimately abandon and conducting a personal and vindictive illegal smear campaign against Rahim Bhaloo, PesoRama's founder.  Why are they doing this?  Because they have no plan.  They have access to the company's treasury and all of its resources and what are they doing with it?  Spending this money on a wasteful campaign which financially benefits the law firm of one of the company's directors.  What they have not done is present any semblance of a plan to finance the company's business plan.  If they are left in charge, this company is going to zero.

The Concerned Shareholders have a plan which we have presented to all of you. If you get behind this plan, we will rapidly grow this business and also give you the shareholders the liquidity that you have been promised.  We, together with Fundamental Private Markets, who have immeasurable boots on the ground experience in discount retail in Latin America and deep financial resources, have a plan to grow PesoRama at a rapid pace into a dominant discount retail player in Mexico and beyond.

The Concerned Shareholders now have the votes needed to elect their proposed director nominees at the meeting of PesoRama shareholders scheduled for December 9, 2020 (the Meeting").  The Concerned Shareholders' director nominees are committed to effecting much needed change at PesoRama, in the interests of all shareholders.  The current PesoRama Board is lying to shareholders.  They are not leading the vote, rather they are losing. 

Entrenched Board Abandons Meritless Lawsuit Brought at Shareholders' Expense

As previously announced, PesoRama – at the behest of the current directors proposed by PesoRama to be re-elected at the Meeting (the "Incumbents") - brought a costly and meritless court application in Alberta, using PesoRama's funds, to deny shareholders the right to elect a board of their choosing.  The costly lawsuit raised a number of technical objections, all designed to secure the unopposed re-election of the Incumbents.  At PesoRama's request, the hearing of the lawsuit was scheduled for December 4, 2020.

The Concerned Shareholders served detailed evidence in response to the lawsuit.  Upon receiving the evidence, the Incumbents sought to delay the December 4^th court hearing, and the Meeting, on the pretext that cross-examinations were needed.  PesoRama abandoned its court application, immediately before the start of the hearing, when the court would have ruled on PesoRama's adjournment request, and on the merits of PesoRama's claims.

PesoRama Admits Incumbent Director Robb McNaughton is Conflicted

In its December 4, 2020 press release, PesoRama addresses the circumstances in which Mr. Bhaloo ceased to be CEO of PesoRama.  What PesoRama's press release didn't disclose is that the Incumbents acted to remove Mr. Bhaloo as CEO only after he questioned the quantum of legal fees being charged by PesoRama's principal outside legal counsel, which are now in the $2 million range, if not higher.  Robb McNaughton, a director of PesoRama, is a partner in that law firm.  He was instrumental in efforts to remove Mr. Bhaloo, a decision that was, based on the evidence before the court, unlawful as it was authorized by PesoRama's board. 

In the court application commenced by PesoRama, which was abandoned today, PesoRama's law firm acknowledged that it was conflicted, and brought in a second law firm, apparently at PesoRama's expense, to deal with the law firm's conflicts.

The Entrenched Board Seeks to Delay the Meeting

In correspondence with the court on December 3, 2020, PesoRama's entrenched board sought to delay the Meeting to permit cross-examinations.  When efforts to delay the litigation and Meeting were resisted, PesoRama wrote to the court again, claiming that the Meeting might be delayed due to COVID-19.  PesoRama made this claim the day after advising that the Meeting raised no COVID-19 concerns. 

The Incumbents appear intent on using any pretext available to delay shareholder choice.  The Concerned Shareholders are committed to pursuing all available avenues, including court proceedings, to require the Incumbents to hold the Meeting on December 9, 2020, to allow shareholders of PesoRama to exercise their right to elect a board of their choosing.

Urgent Need for Change

The Concerned Shareholders believe that a lack of focus and experience and inadequate direction, oversight and leadership on the part of PesoRama's current board of directors and leadership have all contributed materially to the issues now facing PesoRama.  

The Concerned Shareholders believe that inadequate strategic direction and leadership from PesoRama's board of directors and leadership team places PesoRama at very serious risk of being unable to fund future operations, expansion and obtaining a listing of its shares on a Canadian stock exchange.  The Incumbents continue to spend substantial sums on lawyers, including to Mr. McNaughton's law firm, all with a view to avoiding shareholder choice. 

The Incumbents have had every opportunity to prove themselves as worthy stewards of shareholder resources and, at every turn, they have failed to deliver. Do not be fooled by the Incumbents' selective disclosure, designed to purposely mislead shareholders.  Let the facts speak for themselves.  The Incumbents' track record of deal-making and corporate stewardship is fraught with failures.

The Concerned Shareholders stand by our strong belief that the Incumbents lack the execution ability and governance integrity needed to create shareholder value going forward.  We urge all shareholders to read our information circular and go-forward strategy for PesoRama objectively and compare it against the Incumbents' lack of a plan and continued empty promises.  We are eager and optimistic to revive PesoRama and deliver value to shareholders.

PesoRama is at a Critical Juncture - Vote GREEN to Support Change

The resoundingly strong indications of support we have received from fellow shareholders reinforces our conviction that change is necessary and underscores the crucial need for all shareholders to take a stand now and vote.

Regardless of how many shares you own, ALL PesoRama shareholders are urged to read the information circular prepared by the Concerned Shareholders and to seize this opportunity  ̶  vote the GREEN proxy to ensure change for a better future.

Shareholders who have voted the management proxy and who wish to support the Concerned Shareholders have the right to change their vote by simply executing a GREEN proxy, as a later-dated GREEN proxy replaces a previously recorded vote.

TIME IS OF THE ESSENCE. GREEN PROXIES MUST BE RETURNED AS SOON AS POSSIBLE SO THAT THEY MAY BE DELIVERED IN ADVANCE OF THE PROXY CUTOFF ON DECEMBER 7.

If you have any questions or need assistance voting, please contact the Concerned Shareholders' proxy solicitation agent: Gryphon Advisors Inc. toll free at 1-833-261-9730 or by email at [email protected].

The Concerned Shareholders have beneficial ownership or control over 5,275,000 Class A common shares of PesoRama representing more than 11.49% of the Class A common shares of PesoRama.

Forward Looking Statement

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws, including, without limitation, the Concerned Shareholders' and PesoRama's respective priorities, plans and strategies. All statements and information, other than statements of historical fact, included herein are forward-looking statements, including, without limitation, statements regarding activities, events or developments that the Concerned Shareholders expect or anticipate may occur in the future. These forward-looking statements can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words and expressions or the negative thereof. Such statements reflect the Concerned Shareholders' or the Concerned Shareholder nominees' current views and intentions with respect to future events and are subject to certain risks, uncertainties and assumptions. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur or, even if they do occur, will result in the performance, events or results expected. We caution readers not to place undue reliance on forward-looking statements contained herein, which are not a guarantee of performance, events or results and are subject to a number of risks, uncertainties and other factors that could cause actual performance, events or results to differ materially from those expressed or implied by such forward-looking statements. These factors include: changes in PesoRama's and the Concerned Shareholders' strategies, plans or prospects; general economic, industry, business, regulatory and market conditions; actions of PesoRama and its competitors; risks relating to government regulation and changes thereto; and the state of the economy including general economic conditions globally and economic conditions in the jurisdiction in which PesoRama's operates. These factors should not be construed as exhaustive. Readers are cautioned that all forward-looking statements involve known and unknown risks and uncertainties. We urge you to carefully consider those risks and uncertainties. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Unless expressly stated otherwise, the forward-looking statements included herein are made as of the date of this news release and the Concerned Shareholders disclaim any obligation to publicly update such forward-looking statements, except as required by applicable law.

SOURCE Concerned Shareholders of PesoRama Inc.