CALGARY, ALBERTA–(Marketwired – Dec. 30, 2015) –
NOT FOR DISTRIBUTION TO THE U.S.A. NEWS WIRE SERVICES OR FOR DISSEMINATION TO THE U.S.A.
Groundstar Resources Limited (TSX VENTURE:GSA) (the “Company“) is hereby responding to the allegations by Edward Malek Farah contained in the Dissident Information Circular dated December 21, 2015 (the “Dissident Circular“).
The Company’s operating expenses have also fallen by more than half during the same period ($165,076 at October 31, 2015 relative to $398,712 at October 31, 2014). Additionally, the Company has engaged qualified personnel who will be evaluating the numerous acquisition and drilling opportunities being created by the current market. These objective measures are a clear indication of the Company’s sound financial stewardship, which the Dissident Circular falsely called into question.
During the period of time when the former Chairman of the Board and the former Chief Financial Officer were responsible for the day-to-day operations of the Company, the record-keeping fell into a state of disarray. This was discovered after the former Chief Financial Officer was terminated by the Company. In the following months, as the effort to clean up the administrative affairs of the Company continued and the year-end audit process began, it became evident that the financial statements filed by the prior management team had been materially misstated. These extensive misstatements, which have been made public in the most recent Quarterly Financial Statements, are what ultimately led to the General Cease Order.
No members of the current Board were ever involved in either day-to-day administrative duties or preparation of financial statements; to assert otherwise is inaccurate.
The Company has now completed the recovery process with respect to its administrative affairs and expects to meet all future filing requirements in a timely manner.
Mr. Farah, as stated in the Dissident Circular, has no direct experience in oil and gas. This is further evidenced by his lack of meaningful production, relative to the Company’s expectations, while working as a consultant for the Company. Originally brought on by the former Chairman of the Board to assist the Company in developing business, Mr. Farah’s consultancy proved to be costly and ineffective throughout his approximate 11-month tenure with Groundstar. During his brief engagement period, Mr. Farah charged over $140,000.00 in consulting fees and billed nearly $9,000.00 worth of additional expenses to the Company; $7,600.00 of which was for meals and entertainment. In contrast, the current Board has expensed a combined total of $0 for meals and entertainment while still successfully developing new business. To attempt to highlight the current Boards’ lack of financial stewardship while promoting his own fiscal responsibility is confounding.
Mr. Farah was ultimately let go by the Company for the following reasons:
The Dissident Circular also proposes Gerry Talbot as the Company’s Chief Executive Officer. Based on the Company’s prior relationship with Mr. Talbot, the Company finds it inconceivable that any concerned, knowledgeable shareholder would assert his suitability for the Company’s leading role. Mr. Talbot is another former consultant to the Company who was originally brought on, again by the former Chairman of the Board, to assist in securing land deals. Mr. Talbot, like Mr. Farah, showed himself to be completely unable to perform his duties in the view of the Board.
Mr. Talbot was ultimately let go by the Company for the following reasons:
The Company finds it perplexing that Mr. Farah would propose appointing a Chief Executive Officer who he acknowledged, through correspondence with other members of the Company’s team, was performing poorly for the company.
Further, the Dissident Circular proposes Mr. Moe Abdallah as the Company’s Chief Financial Officer. The Board questions his suitability for the following reasons:
Based on the above, the Board is of the view that the proposed team set forth in the Dissident Circular is unqualified and unsuitable to run a public oil and gas company.
Management recommends that shareholders vote the YELLOW proxy and ignore the green proxy provided by the dissident group. Details on how to vote the YELLOW form of proxy are contained in the Management Information Circular being mailed to shareholders and available on SEDAR at www.sedar.com under the Company’s profile. Shareholders needing assistance with voting are encouraged to contact the Company’s transfer agent at (403) 776-3912.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About Groundstar Resources Limited
Incorporated in 1968, Groundstar Resources Limited is a publicly traded oil and gas company actively growing a portfolio targeting producing oil and gas assets with development opportunities and exploration upside. The Company’s current portfolio of resource assets provides both near term and longer term potential. Groundstar is quoted and trades under the ticker symbol “GSA” on the TSX Venture Exchange.
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 press release.
Groundstar Resources Limited
Tyron Pfeifer
(403) 614-9902
tpfeifer@groundstarresources.com
Groundstar Resources Limited
Dale Hammons
(780) 826-0920
dalehammons@hotmail.com