Upcoming Annual Meeting and Reminder to Vote
September 13, 2019
Vancouver, British Columbia, September 13, 2019 – Genesis Metals Corp. ("Genesis" or the "Company") (TSX-V: GIS) Genesis Metals invites all shareholders to the Company's upcoming annual general and special meeting of shareholders (the "Meeting"), which will be held at the offices of Miller Thomson LLP at 400 – 725 Granville Street, Vancouver BC at 10:00 a.m. (Vancouver time) on Monday, September 23, 2019.
Management encourages shareholders to review the proxy materials which have been mailed and all proxy materials pertaining the Meeting have been posted under the Company's profile at www.sedar.com (collectively, the "Meeting Materials").
At the Meeting, shareholders will be asked, in addition to certain routine matters, to consider and, if thought fit, to approve an ordinary resolution of disinterested shareholders approving the amendment of the exercise of certain outstanding stock options granted to certain insiders of the Company (the "Insiders") as set out in the Meeting Materials and below.
Option Exercise Price Amendment
The Issuer currently has an aggregate of 7,950,000 stock options outstanding as follows:
- 2,187,500 stock options with exercise prices of $0.15 to $0.22 per share (the "Insider Options") granted to insiders from August 5, 2014 to July 11, 2017;
- 1,807,500 stock options with exercise prices of $0.20 to $0.22 per share (the "Non-Insider Options") granted to non-insiders from July 27, 2016 to September 11, 2017; and
- 3,955,000 stock options with an exercise price of $0.10 per share (the "Remaining Options").
On July 26, 2019, the Company’s directors, following a recommendation from the Compensation Committee, resolved that it was in the best interests of the Company to approve a proposal to amend the exercise price of the Insider Options and Non-Insider Options to $0.10 (the "Exercise Price Amendment").
The objective of granting stock options is to incentivize directors and officers and to align their interests with that of shareholders. As the Company is still at the mineral exploration stage, its ability to attract and retain key personnel depends in large part on stock-based compensation. The original exercise prices of stock options proposed to be re-priced were based on the market price of the Company’s shares at the time of grant. Market conditions have changed so significantly since the date of grant that such options have lost their intended effect. The quantum of the proposed $0.10 amended exercise price was determined due in large part to the fact that the exercise price of all Remaining Options is $0.10 and is intended to better align the interests of the optionees with that of shareholders and to enhance the stock options' objective of incentivizing and retaining key personnel.
Disinterested Shareholder Approval and Related Party Matters
The Exercise Price Amendment is subject to TSX Venture Exchange (the “Exchange”) approval and, pursuant to Exchange policies, any amendments to the exercise price of stock options issued to Insiders must be approved by disinterested shareholders of the Company, being all shareholders represented at the Meeting excluding votes cast by the Insiders as set out in the table below:
|Name||No. of Options||Exercise price||Grant Date||Expiry Date|
The Company is therefore seeking disinterested shareholder approval at the Meeting of the Exercise Price Amendment and, in the event that such approval is obtained, will apply for Exchange approval shortly thereafter.
The Exercise Price Amendment constitutes a "related party transaction" insofar as it pertains to the Insider Options under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”) since the Insiders are related parties of the Company. All of the independent directors of the Company, acting in good faith, have determined that the Exercise Price Amendment is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of nor the fair market value of the consideration for, the Exercise Price Amendment, insofar as it involves interested parties, exceeds 25% of the Company’s capitalization and the Company’s securities are not listed or quoted on any of the stock exchanges or markets enumerated under Section 5.5(b) of MI 61-101. The Exercise Price Amendment, if implemented, would apply equally to all Insider Options and Non-Insider Options and, accordingly, all insiders and non-insiders will be treated in an identical manner.
Reminder to Vote
Copies of the Meeting Materials, including the Company's information circular dated July 29, 2019, are available on SEDAR at www.sedar.com under the Company's profile. Management of Genesis recommends a vote FOR all proposed resolutions.
ON BEHALF OF THE BOARD OF DIRECTORS
CEO and Director
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain disclosure in this release, including statements regarding the Company's plans to apply for Exchange approvals of the Exercise Amendment, constitute forward-looking information or statements (collectively, "forward-looking statements") for the purpose of applicable securities laws. In making the forward-looking statements, the Company has applied certain factors and assumptions that are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company, including that all requisite approvals, including disinterested shareholder approval and Exchange Approval, will be obtained in a timely manner and on reasonable terms. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such risks include, among others, the risks related to the inability to obtain required shareholder and regulatory approvals on a timely basis or at all; the Company's lack of operating revenues and risks related to dependence on key personnel; and the risk that, in the event it becomes apparent that Exchange approval cannot be obtained without material delay or incurring significant expense, the Company may elect to abandon the Exercise Price Amendment. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.