News Release - Nov 04, 2013
Boss Power Files Letter to Shareholders: Why Beruschi Should Not Be Trusted
Vancouver, B.C. - Monday, November 4, 2013: Boss Power Corp. (TSX-V: BPU) ("Boss Power" or the "Company") today announced that it has filed and is mailing a letter to shareholders regarding the proxy contest initiated by dissident shareholder Morning Star Resources Ltd., owned by Anthony Beruschi ("Beruschi"). The letter warns shareholders not to trust Beruschi.
A vote for Boss Power's Board of Directors will take place at the Company's Annual General and Special Meeting on November 14, 2013. Boss Power urges shareholders to vote the YELLOW proxy AGAINST Beruschi and FOR the five new Boss Power nominees, who have:
- A deep background in geology, mineral exploration, accounting, venture capital and resource investment
- A track record of success in negotiations, value-creation and mineral exploration
- A commitment to move the Company forward in the best interests of all shareholders
In the letter, which is reproduced below, Boss Power details some of the ways Beruschi is attempting to mislead shareholders and misrepresent the facts. Among other things, Beruschi's dissident information circular failed to disclose, even though it was required to disclose, damaging financial history about his nominee Kirk Shaw and Shaw's eligibility to serve on the Boss Power Board.
Boss Power urges shareholders to read the letter and vote the YELLOW proxy and ensure Boss Power receives it prior to the voting deadline of 11:00 PM (Pacific Time) on Tuesday, November 12, 2013. Boss Power's Letters to Shareholders, Management Information Circular and other proxy materials can be found on Boss Power's website: www.bosspower.ca, as well as under its SEDAR profile. For assistance voting, shareholders should contact Boss Power's Proxy Solicitor, Laurel Hill Advisory Group, at 1-877-452-7184 (Toll-Free in North America) or Collect at 1-416-304-0211, or by email at assistance@laurelhill.com.
Letter to Shareholders:
Dear fellow shareholder,
Don't Trust Beruschi and his four nominees
Your Board is more convinced than ever that dissident Anthony Beruschi and his four nominees should not be trusted. Beruschi has, among other things:
- Misleadingly presented his dissident nominees as independent of Beruschi. In fact, two dissident nominees�Kirk Shaw and Ray Roland-have business histories that are so pervasively intertwined with Beruschi's that it is impossible for shareholders to know with confidence whose interests they are really serving.
- Mailed a misleading information circular to the Boss shareholders that fails to disclose damaging financial history about his nominee Shaw and Shaw's eligibility to serve on the Boss Board.
- Misrepresented his negotiating position on B Claims.
- Remained silent on an array of key monetary issues, because he doesn't want you to understand the full extent to which his interests are not aligned with yours.
- Misrepresented Boss' position on Court neutrality and vote buying.
In this letter we will correct the record. After you read it, we urge you to vote the YELLOW proxy for a new group of five experienced directors. They have the unanimous support of the current Boss board that is stepping down, as well as the support of Institutional Shareholder Services Inc. ("ISS"), a leading independent international corporate governance analysis and proxy advisory firm.
Don't trust Beruschi - he is joined at the hip to Shaw and Roland
Boss cautions shareholders not to trust the biographies of Shaw and Roland that Beruschi provided in his dissident circular and news releases. These biographies don't show how closely connected Shaw, Roland and Beruschi are. Beruschi doesn't want you to know about the full extent of these relationships because it casts doubt on his assertion that his nominees are independent of him. Boss believes that Beruschi, Roland and Shaw are, in effect, a team of related parties.
Boss invites shareholders to review the illustration below, which shows more than 30 relationships between Beruschi, Roland and Shaw in five publicly-traded companies. This illustration was prepared from public data disclosed by the five companies. It is intended as a sampling of their connections to each other, not a complete record.
These relationships will have a strong impact on John Skinner, the dissident nominee that Beruschi has just anointed as CEO of Beruschi's Boss. Skinner, a winery owner and former stockbroker, has no experience running either a publicly-traded company or a mineral exploration company. Skinner won't likely be able to fend off Beruschi's plan to "work with" his nominees, as Beruschi deftly describes it.
For Beruschi "work with" likely means entering into a spectrum of contracts with him for management, rent, accounting and other services. For an example, look at Beruschi's Goldbank Mining Corp., where shareholders were burdened with a 99.9% stock price plunge while Beruschi harvested millions of dollars in compensation under related party transactions.
Don't trust Beruschi - he mailed a misleading circular on a bankruptcy involving Shaw
In his dissident circular Beruschi fails to provide required disclosure about his nominee Shaw. Here is what Beruschi omitted: until January 10, 2012 Shaw was a director of a company that filed for bankruptcy nine days later. Under Canadian securities regulations, Shaw was required to disclose the bankruptcy because he served as a director of the company within a year of its bankruptcy filing.
That is not all. Beruschi fails to mention that Shaw requires, and does not have, the written consent of the TSX Venture Exchange to serve as a director of Boss. He needs consent because securities regulators in British Columbia suspended trading in a company of which Shaw was a director.
Boss believes these omissions are critical pieces of shareholder information regarding Shaw's eligibility as a dissident nominee and call into question Beruschi's trustworthiness as the dissident leader who nominated Shaw.
Don't trust Beruschi - his offers for the value of the B Claims are not fair to Boss shareholders
One of the monetary issues between Boss and Beruschi is a dispute over the value of Beruschi's B Claims. Shareholders should not trust Beruschi's assertion in the dissident circular that he "privately presented numerous fair offers" to settle the matter.
As detailed below, Beruschi's offers were not fair, nor structured in such a way that the Board could accept them and be true to its fiduciary duties of acting in the best interests of all shareholders.
- In the late summer of 2012, Boss proposed $1.5 million for the B Claims and $0.5 million for certain royalty rights held by Beruschi. He responded with $1.8 million for the B Claims alone. On November 13 2012, Beruschi increased his ask to $3.25 million for the B Claims and royalties. He also tied this to a corporate restructuring that would give him control of a portion of Boss.
- On May 9 2013, Beruschi demanded $5.3 million for the B Claims, the royalties and reimbursement for his legal expenses. He tied this offer to the creation of a "litigation trust", with Beruschi to receive all interests in any potential litigation by Boss related to the B Claims.
- On May 22, 2013, Beruschi demanded at least $6.5 million, for the B Claims, the royalties, reimbursement for legal fees and taxes.
Don't Trust Beruschi - he has been silent on his other monetary disputes with Boss
Beruschi has never mentioned royalty claims against Boss in his 30-page dissident circular or in the nine news releases he has issued since August. Nor has he mentioned his numerous other disputes with Boss, which are detailed on page 14 of Boss' Management Information Circular, and which have a cumulative value in the millions of dollars.
Among other things, Beruschi demands that Boss hand over 2 million shares that were escrowed when Beruschi failed to deliver mineral claims in 2007. In an arbitration process that is currently underway and scheduled for a decision in 2014, Beruschi is arguing that the escrow shares should be released to him even though he failed to deliver the mineral claims.
Allowing Beruschi to have control of Boss would forego the cancellation of those escrow shares, resulting in a 3% benefit to Beruschi. If Boss wins the arbitration, and cancels the 2 million shares, the 3% benefit is spread among all shareholders.
Boss believes Beruschi's silence on these monetary issues is strategic. He doesn't want shareholders to know the extent to which his interests are not aligned with theirs. Who will stand up to these demands if Beruschi's team is elected to the Board?
Don't trust Beruschi - he is misrepresenting Boss' position
Boss believes a Court can be neutral in establishing the value of Beruschi's B Claims if presented with information about the value which is fair. Boss is only concerned that the Court won't hear from anyone truly representing the interests of all shareholders if Beruschi's hand-picked nominees are in control of Boss and are directing the value submissions that Boss makes to the Court.
Beruschi is misleading you about vote-buying. On page 11 of the dissident circular, it clearly says Beruschi may form and pay for a "soliciting dealer group." That is not, as Beruschi asserts in a later news release, the same as a proxy solicitation firm. A soliciting dealer group means paying stockbrokers a fee to get your votes. And it is not "boilerplate," as Beruschi would have you believe. You won't find such language in Boss' Management Information Circular.
Trust Boss' five experienced nominees
The stakes are high and shareholders deserve a trustworthy, experienced and independent Board. The Boss nominees have what it takes. For detailed background on each of the Boss nominees, you are encouraged to read the Management Information Circular dated October 22, 2013 or visit Boss' website at www.bosspower.ca.
Collectively, Boss' nominees have:
- A deep background in geology, mineral exploration, accounting, venture capital and resource investment.
- A track record of success in negotiations, value-creation and mineral exploration.
- A commitment to move the company forward in the best interests of all shareholders.
In contrast, Beruschi has assembled a weak group of nominees. Only half have any experience with publicly-traded mineral explorers and that experience is not impressive. Boss believes there is a risk that the dissident nominees may not be truly independent from Beruschi.
Beruschi styles himself as a "Concerned Shareholder" but it is Beruschi that shareholders should be concerned about. Don't let Beruschi turn Boss into his next source of cash. Boss believes he should not be trusted and must be stopped.
Act now to protect your interest in Boss Power: Vote the YELLOW proxy today.
On Behalf of the Board of Directors of
BOSS POWER CORP.
Ron Netolitzky, Chairman and Acting CEO
THE VOTING DEADLINE IS 11:00 PM (PACIFIC TIME) ON NOVEMBER 12, 2013
Your vote is extremely important to the future of your investment in Boss no matter how many or how few shares you may own. Please discard any proxy or related materials you may have received from the Dissidents and vote using only the enclosed YELLOW voting instruction form FOR each of the Boss director nominees.
Even if you have already voted using the dissident proxy, you have every right to change your vote simply by executing the YELLOW voting instruction form enclosed: it is the later-dated voting instruction form that will be counted. If you have already voted your YELLOW voting instruction form, there is no need to vote again.
To ensure your vote is received in a timely manner, please vote via the internet at www.proxyvote.com or by telephone using the phone number located on your voting instruction form. For assistance voting your YELLOW proxy please contact Boss Power's Proxy Solicitor Laurel Hill Advisory Group. Toll Free at 1-877-452-7184 or collect at 1-416-304-0211 or by e-mail at assistance@laurelhill.com
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
For further information contact: Tony Perri - Investor Relations, Manager
Suite 611, 675 W. Hastings Street Vancouver, British Columbia, Canada V6B 1N2
Tel: (604) 688-8115 Fax: (604) 669-2543
Copyright � 2013 BOSS POWER CORP. (BPU) All rights reserved. For more information visit our website at http://www.bosspower.ca/ or send email to info@bosspower.ca.
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