GROWMAX PROVIDES CLARIFICATION OF AUGUST 27, 2019 NEWS RELEASE AND RESIGNATION OF DIRECTOR
At the request of the TSX Venture Exchange, GrowMax Resources Corp. is providing further clarifications to its news release dated Aug. 27, 2019, wherein the company announced a proposed change of business from mineral exploration to an investment issuer under the policies of the TSX-V. The company expects to become a Tier 1 investment issuer, subject to meeting the initial listing requirements of the TSX-V and obtaining all regulatory approvals, including approval of the TSX-V.
Trading in the common shares of the company has been halted and will remain halted pending review of the proposed COB by the TSX-V. Pursuant to the policies of the TSX-V, sponsorship is required for the proposed COB, and the company intends to apply to the TSX-V for a waiver from the sponsorship requirement.
The company wishes to clarify that the investment in Hempfusion Inc. is an arm’s-length investment and the investment in First Responder Technologies Inc., as previously disclosed in the news release dated Aug. 12, 2019, is a non-arm’s-length investment, as Michael Malana, the chief financial officer of the company, is a director and the chief financial officer of First Responder. Kulwant Malhi, chief executive officer and director of the company, is the chairman and director of First Responder.
The company wishes to also clarify that the shareholder approval that the company received with respect to the proposed COB at the annual general and special meeting held on Aug. 7, 2019, was obtained, pursuant to the policies of the Canadian Securities Exchange and not pursuant to the polices of the TSX-V. The company has decided to remain listed on the TSX-V, and, as such, the proposed COB remains subject to the approval of the TSX-V and the TSX-V may require shareholder approval, pursuant to its policies. The company does not believe that shareholder approval is required for the proposed COB under the policies of the TSX-V, based on the following reasons:
- The proposed COB is not considered a related party transaction, as defined in Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions.
- The company currently does not have a qualifying asset to continue to meet the continued listing requirements under TSX-V Policy 2.5 — Continued Listing Requirements and Inter-Tier Movement.
- The company had negative cash flows from operating activities for the years ended Dec. 31, 2018, and Dec. 31, 2017.
- The company will not be subject to a cease trade order and will not otherwise be suspended from trading on completion of the proposed COB.
- Shareholder approval of any aspect of the proposed COB is not required under applicable corporate laws and is not required under applicable securities laws.
The company intends to submit a formal application for approval of the proposed COB to the TSX-V in the next few weeks.
Board and management
Alfred Wong has resigned as a director and the president of the company. The company wishes to thank him for his services.
Upon the completion of the proposed COB, the principals and insider of the company will be the individuals disclosed herein.
Kulwant Malhi, chief executive officer and director, is a Canadian entrepreneur and businessman. He is a retired member of the Royal Canadian Mounted Police, where he completed his duties in the drug enforcement and organized crime divisions. He is the founder and chairman of Bullrun Capital and is deeply involved in the financial markets. Mr. Malhi has been instrumental in raising capital for various projects, totalling in excess of $150-million, since 2008. Mr. Malhi has specialized in working with academia and advances in technology, and has financed academic research that has potential for commercialization through private and public companies. His extensive network of contacts and personal relationships have enabled him to assemble a growing team aimed at unearthing the potential of technological advancements in the biomedical, agricultural and technology sectors.
Michael Malana, chief financial officer and corporate secretary, has over 15 years of experience in the administration, accounting and corporate reporting for public companies, having served as chief financial officer and corporate secretary with several publicly listed companies. Mr. Malana is a chartered professional accountant and holds a bachelor of commerce degree in accounting from Concordia University.
Michael Sadhra, director, is the chief financial officer and director of Breathtec Biomedical Inc. He is also the chief financial officer of Micron Waste Management Technologies Inc. Mr. Sadhra has been tax partner of Sadhra & Chow LLP since May, 2009. Mr. Sadhra served as the chief financial officer of several public companies, including Cairo Resources Inc. Reservoir Capital Corp. and Lara Exploration Ltd. He has been a self-employed tax consultant since January, 2007. He was employed at KPMG LLP from September, 1999, and served as senior tax manager from October, 2003, to December, 2006, specializing in Canadian and international taxation for mining companies. Mr. Sadhra earned a bachelor of commerce degree from the University of British Columbia in 1991 and is a chartered professional accountant.
Bala Reddy Udumala, director, is a strategic consultant for International Zeolite Corp., a public company listed on the TSX-V, as well as chief executive officer of Ichaana Indo-Can Zeolite Private Ltd.
Kisan International Trading FZE, body corporate registered under the Jebel Ali Free Zone Authority, United Arab Emirates, is an insider of the company (holding 10.8 per cent of the issued and outstanding common shares as of July 2, 2019) and a subsidiary of Indian Farmers Fertiliser Co-operative Ltd.
Completion of the proposed COB is subject to a number of conditions, including, but not limited to, exchange acceptance and, if applicable, disinterested shareholder approval. Where applicable, the proposed COB cannot close until the required shareholder approval is obtained.
There can be no assurance that the proposed COB will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the company should be considered highly speculative.
We seek Safe Harbor.