Dealnet Urges Dissidents to Stop Misleading Shareholders
TORONTO, July 13, 2020 (GLOBE NEWSWIRE) — Dealnet Capital Corp. (“Dealnet” or the “Company”) (TSX VENTURE: DLS) warns shareholders about continued misleading statements from a group of dissident shareholders, led by Steven Small (“Small”) of Capital Partners. The Company’s Board and Management team remain focused on operating Dealnet and creating value for all shareholders and have not responded to every misstatement from Small and the dissident shareholders, but feel a responsibility to alert shareholders to not rely on the dissident communications for investment decisions. To cite but a few examples:
Small stated “massive defaults and deferrals loom” in a May 28, 2020 press release. When the Q2 results are released by the Company, they will show that Small’s assertion was inaccurate given that delinquencies as of June 30, 2020 are significantly lower than as of March 31, 2020. The Company’s Prime Plus portfolio continues to stand up well;The July 9, 2020 press release referenced a current heat wave when attacking a press release from the Company regarding its Q2 originations. The dissidents’ comments are misleading and unfair given that the Company’s dealers were closed, except for emergency repairs, for most of Q2 and the heatwave is taking place during Q3;The dissidents falsely state that there are “impending settlement dates in 2021 to repay tens of millions of fixed term ‘Warehouse Debentures’”. As clearly disclosed in the Company’s financial statements, there is only one $10 million warehouse debenture due in 2021 and it is not due until November. Given that the debenture is over-collateralized, the proceeds from securitizing the collateral can be used to pay off the debenture; andThe dissidents inaccurately refer to the $6.25 million bank loan as “urgent and reckless short-term emergency liquidity loan”. In uncertain times, it is prudent for corporations to have an available line of credit. The funds from the bank loan have not been used to fund general operations.The Company believes that the continued and increasing flow of misleading information from Small further demonstrates his inability and incapacity to be involved in the stewardship of Dealnet. The Company previously provided disclosure regarding Small’s track record at the helm of the Company and how the new management team has acted decisively to address the near fatal and disastrous legacy issues that he and his management team created. Shareholders are urged to review the disclosure at www.dealnetcapital.com/2020-news/ and the investor presentation at www.dealnetcapital.com/additional-info/.The Company will issue a management information circular in advance of the meeting date, which will include detailed information regarding the matters to be voted on and voting instructions. Dealnet will provide fulsome details regarding Small and certain of the other dissidents’ involvement with the Company in its circular. The Company’s Board of Directors has engaged Goodmans LLP as its legal advisor and Longview Communications & Public Affairs as its strategic communications advisor in regards to the pending proxy contest.About Dealnet Capital Corp.Dealnet is the parent company of subsidiaries operating in two market segments, consumer finance and call centre. The Company operates in the consumer finance segment in Canada through EcoHome Financial Inc. (“EcoHome”) and its call centre segment under the One Contact banner (“One Contact”).EcoHome is a specialty finance company serving the $20 billion Canadian home improvement finance market. EcoHome develops and supports consumer sales financing programs for approved dealers and distributors under agreements with original equipment manufacturers (OEMs) that supply a wide range of home improvement products to the retail market. Through a dealer network, EcoHome underwrites, originates, funds and services the prime quality loans and leases that homeowners need to finance the acquisition and installation of capital assets that improve the quality, comfort and safety of their homes.One Contact offers customer support services to third-party institutions across Canada and the U.S. and to EcoHome.For additional information please visit www.sedar.com.Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.Forward-looking StatementsThis news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “would”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s Management’s Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.