Concerned Shareholders have presided over a movement of shareholders that has climbed from 3% of the outstanding shares in November 2023 to under 40% of the outstanding shares today
Toronto, ON, February 13, 2024 – Six days after the recent annual general and special meeting (the “Meeting”) of Ciscom (“Ciscom” or, the “Company”) (CSE: CISC), (OTCQB: CISCF), the incumbent board of directors of Ciscom (the “Incumbent Board”) finally woke up to their securities law obligations as a reporting issuer in Canada and publicly reported the results of the Meeting.
In a shameful display of board entrenchment, incumbent directors of Ciscom proudly declare victory (six days after shareholder meeting), notwithstanding that approximately four out of five of the shares tendered in their favour belonged to the incumbent directors themselves
Concerned Shareholders have presided over a movement of shareholders that has climbed from 3% of the outstanding shares in November 2023 to under 40% of the outstanding shares today – this movement is just beginning and will continue to agitate every day until its objectives are met and the incumbent directors’ self-serving voting block is destroyed
Unwillingness of incumbent directors to engage (or even to meet) with representatives of approximately 40% of the Ciscom shareholder base simply delays inevitable change, but comes at the expense of shareholders’ time, money and resources
The facts speak for themselves:
Some 40% of the shares of Ciscom (i.e. almost half of the Ciscom shares) were tendered by more than 90 Ciscom shareholders in favour of the slate of directors proposed by Hummingbird Capital Inc., Chen Xi Liao, and Andrew Darbyson (collectively, the “Concerned Shareholders”).
Approximately four out of five of the shares tendered in favour of the Incumbent Board belonged to the incumbent directors themselves.
When you consider disinterested shares only (i.e. the shares belonging to the general body of shareholders other than the incumbent directors themselves), the Meeting in fact evidenced an overwhelming show of support for the slate of directors proposed by the Concerned Shareholders (more than 3/4 of such shares were voted in favour of the Concerned Shareholders, as opposed to less than 1/4 of such shares in favour of the Incumbent Board).
For any ordinary board of directors of a public company, losing the support of almost half of your shareholder base would constitute a crisis and immediately precipitate steps towards reconciliation. But this is no ordinary board of directors. In the minds of the Incumbent Board, they are winners, even when they are losers.
To add insult to injury, Michel Pepin, the President and CFO of Ciscom (himself a member of the Incumbent Board), who acted on behalf of vacationing Chairman, Paul Gaynor who was kind enough to join the AGM by Zoom Meeting (contrary to a request from the Concerned Shareholders that the Chair be independent), presided over the invalidation of proxies representing millions of Ciscom shares, resulting in a three-hour delay to the commencement of the Meeting. Importantly, the Chair acted in this manner with the knowledge that such shares, in aggregate, comprised a resounding vote of no confidence in the Incumbent Board from close to half of Ciscom’s shareholder base. The Concerned Shareholders are exploring various legal remedies in this regard.
The fact of the matter is that the Incumbent Board either: (a) severely underestimated the overwhelming level of support for the Concerned Shareholders (indicating that the Incumbent Board is deeply out of touch with its shareholder base); or (b) was aware of the overwhelming level of support for the Concerned Shareholders and decided not to do anything about it, with the knowledge that the ~47% of shares held by the incumbent directors themselves would be enough to carry the day at the Meeting (indicating that it was more important for the members of the Incumbent Board to retain their directorships than to engage with the other half of the shareholder base which is not themselves).
“One of the most important responsibilities of a board of directors is to engage with shareholders, understand their views, and, while those views may differ from management, encourage a constructive dialogue for the betterment of all stakeholders. It is baffling to us that this needs to be explained, but it is clearer now than ever that the Incumbent Board has failed spectacularly in this regard,” said Gilles Trahan, President and Chief Executive Officer of Hummingbird Capital. “When was the last time you have seen an incumbent board of directors celebrated losing the support of almost half of their shareholder base? This complete lack of self-awareness, good judgment and basic critical thinking on the part of the Incumbent Board is the reason why Ciscom is failing.”
“We believe that, with the right leadership, Ciscom’s best days are yet to come. The leadership at Ciscom needs to return to a founder’s mentality, end wasteful spending and entrenchment and assemble a team that knows what it takes to grow the business,” said Tony Liao, a prominent Toronto business owner and Ciscom shareholder. “We would like to thank the shareholders who have reached out to us since we made our desire for change public. This movement of shareholders has climbed from 3% of the outstanding shares in November 2023 to under 40% of the outstanding shares today.”
Given the Incumbent Board’s track record, Ciscom shareholders are justifiably concerned about what costly entrenchment tactics the Incumbent Board may continue to deploy in an attempt to delay inevitable change supported by the Concerned Shareholders. Any efforts by the Incumbent Board, for example, to consolidate the Ciscom shares (with a view to minimizing the support for the Concerned Shareholders by “rank and file” and Ciscom shareholders) or to take similar measures will be met with swift resistance.
In this regard, and building on the momentum of recent months, the Concerned Shareholders will continue to agitate every day until their objectives are met and the Incumbent Board’s self-serving voting block is destroyed.
The Concerned Shareholders convey this simple message to Ciscom shareholders who are sick and tired of the arrogance and mismanagement of the Incumbent Board: “Stay tuned.”
For further information, please contact:
Hummingbird Capital Inc.
Gilles Trahan
President & CEO
Phone: 416-247-2808
Chen Xi (Tony) Liao
Phone : 647-874-8088
E-mail : chenxiliao@rogers.com