Boss Power Corp.
TSX VENTURE : BPU

Boss Power Corp.

November 21, 2014 18:26 ET

Boss Power Corp., Morning Star Resources Ltd., Magic Dragon Ventures Ltd. and Anthony Beruschi Complete the Arrangement Agreement Detailing the Divisive Reorganization

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 21, 2014) - Boss Power Corp. (TSX VENTURE:BPU) ("Boss Power"), along with Morning Star Resources Ltd., Magic Dragon Ventures Ltd. and Anthony Beruschi (collectively, the "Beruschi Parties"), jointly announce they have entered into an arrangement agreement (the "Arrangement Agreement") providing for the divisive reorganization of Boss Power by way of plan of arrangement (the "Arrangement") as contemplated in the binding letter agreement (the "Letter Agreement") announced April 1, 2014. Also party to the Arrangement Agreement is Blizzard Finance Corp. ("Newco"), a British Columbia Corporation incorporated in order to facilitate and participate in the Arrangement. The Arrangement Agreement includes customary terms and conditions, including representations and warranties, covenants, conditions and completion mechanics. For additional information respecting the terms of the Letter Agreement see the Boss Power press release dated April 1, 2014.

The Arrangement, if approved, will result in the Beruschi Parties, and any other holders of common shares of Boss Power ("Boss Shares") that validly elect (collectively, the "Electing Boss Shareholders"), holding shares of Newco that will have as its primary asset cash in the amount equal to $0.322 per Boss Share held by the Electing Boss Shareholders immediately prior to the completion of the Arrangement. The Boss Power shareholders that do not elect to become shareholders of Newco will continue to be shareholders of Boss Power, which will have as its primary asset the balance of the net proceeds of the settlement of Boss Power v. Her Majesty the Queen in Right of British Columbia, BCSC Action No. S087266 (the "Blizzard Settlement") less the settlements paid to Anthem Resources Incorporated and Cazador Resources Ltd. and Adam Travis as well as restructuring and legal expenses incurred. Following the Arrangement, both Boss Power and Newco will have over $0.32 per share in working capital based on preliminary estimates.

Boss Power's board of directors has approved the Arrangement and recommends that the holders of Boss Shares vote their shares in favour of the Arrangement. In making this recommendation the board of directors considered a number of benefits of the Arrangement and the Letter Agreement as a whole, including the transactions which allowed the Blizzard Settlement to close, ensuring the $30,000,000, plus costs, compensation amount was not revoked by the Province. Furthermore, the transactions extract Boss Power from what would otherwise be years of litigation, and allows the contingent of dissenting Boss Power shareholders to be spun-out into Newco, paving the way for Boss Power to move forward free of the debilitating conflict that has racked the company for years.

The Arrangement is to be implemented by way of a statutory plan of arrangement and will be subject to the approval of 66 2/3% of the votes cast by the holders of Boss Shares at a special meeting, which is currently anticipated to take place in January, 2015. The Arrangement will also require court approval and regulatory approvals including the approval of the TSX Venture Exchange. If the holders of the Boss Shares approve the Arrangement and the requisite court and regulatory approvals are obtained, the closing is expected to take place later in January, 2015. The information circular for the Arrangement is expected to be mailed to Boss Power shareholders by December 22, 2014.

The Beruschi Parties and Anthem Resources Incorporated have entered into lock up agreements with Boss Power under which, amongst other things, ensures they will irrevocably vote their Boss Shares, representing approximately 67.3% of outstanding Boss Shares, in favour of the Arrangement. Boss Power has no securities outstanding other than the Boss Shares.

During the proxy dispute leading up to the November 14, 2013 AGM the Beruschi Parties had claimed Mr. Ron Netolitzky and other former directors of Boss Power were working in concert with Anthem Resources Inc. The Beruschi Parties hereby retract such statements and any suggestion that the current and former board of directors of Boss Power acted improperly or in breach of their duties during their tenure as directors.

During the proxy dispute leading up to the November 14, 2013 AGM Boss suggested that Mr. Beruschi acted as legal counsel for Boss in connection with the drafting of the trust agreements related to the B Claims. Boss hereby retracts such statements and any suggestion that Mr. Beruschi acted improperly or in breach of his duties in connection with the transfer of the B claims or otherwise.

Perseverance, tenacity, stamina and skill through difficult legal challenges are important assets for participants in mineral exploration. Boss's prior management, including Anthony Beruschi, successfully challenged the Province's expropriation of its B.C. uranium assets securing a $30 million settlement for Boss shareholders. When further challenges arose both Boss's board of directors and Anthony Beruschi applied their respective skills to preserve the settlement while finding a unique and financially reasonable and effective resolution which is scheduled to close in January, 2015.

"We are very pleased to have finally resolved all matters with Anthony Beruschi" said Ron Netolitzky. "Boss Power and Mr. Beruschi's spin out, Blizzard Finance, will each soon have significant treasuries during a period of extraordinary market weakness that is now offering excellent business opportunities in resource markets".

Forward-Looking Information: This release contains forward-looking information within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein including, without limitation the completion of the Arrangement, are forward-looking statements. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Boss Power's expectations include uncertainty as to the completion of the Arrangement; and the accuracy of management's assessment of the effects of the successful completion of the Arrangement. Boss Power's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. Boss Power assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Boss Power Corp.
    Ron Netolitzky
    Acting CEO
    (604) 688-8115

    Morning Star Resources Ltd.,
    Magic Dragon Ventures Ltd. and Anthony Beruschi
    Anthony Beruschi
    (604) 669-3116