Mr. Turki AlRajhi reports

MITHAQ FILES PROXY CIRCULAR AND SENDS LETTER TO AIMIA SHAREHOLDERS

Mithaq Capital SPC, the largest shareholder of Aimia Inc., has filed a dissident proxy circular (the Mithaq circular) in connection with the future annual meeting of Aimia shareholders to be held on June 26, 2024. Aimia shareholders are urged to read the Mithaq circular in its entirety. A copy of the Mithaq circular has been mailed to Aimia shareholders and can also be found under Aimia's profile on SEDAR+.

Mithaq has ownership of, or control or direction over, a total of 26,893,588 common shares of Aimia, representing approximately 26.98 per cent of the issued and outstanding common shares. Mithaq is taking action because of its continuing concerns with the strategic direction and corporate governance practice of Aimia's leadership, which continues to engage in entrenching, self-interested behaviour and the pursuit of a strategy that has caused significant destruction of shareholder value. Mithaq announced on May 30, 2024, that it has nominated six highly qualified nominees (the Mithaq nominees) for election to the board of directors of Aimia at the meeting, in accordance with Aimia's advance notice bylaw (bylaw No. 2013-1).

Mithaq encourages Aimia shareholders to vote using the gold form of proxy or gold voting instruction form accompanying the Mithaq circular prior to 5 p.m. (Toronto time) on Friday, June 21, 2024, as follows:

• For the election of all six of the Mithaq nominees:
  • Turki Saleh A. AlRajhi;
  • Muhammad Asif Seemab;
  • Tariq Hamoodi;
  • Max Volsky;
  • Sharon Stern;
  • Naveed Kamran.
• For the election of the following management nominee:
  • Ioannis (Yannis) Skoufalos.
• Withhold in respect of the election of the following six management nominees:
  • Robert Feingold;
  • Thomas Finke;
  • Linda S. Habgood;
  • Thomas (Tom) Little;
  • James Scarlett;
  • Jordan G. Teramo.
• For the reappointment of PricewaterhouseCoopers LLP as auditor of the company and to authorize the board to fix its remuneration;
• Against acceptance of Aimia's approach to executive compensation (say on pay).

Based on Aimia's management proxy circular, Mithaq understands Mr. Skoufalos has been nominated by the group of investors who received common shares pursuant to Aimia's October, 2023, private placement as their nominee for election to the board at the meeting. Mithaq has recommended that Aimia shareholders vote for the election of Mr. Skoufalos to respect the rights of the private placement investors under their investor rights agreement, and to support a smooth transition.

Shareholders who have questions or are willing to express their support for the Mithaq nominees but require assistance in doing so may contact Mithaq's proxy solicitor, Carson Proxy, for more information by North American toll-free phone at 1-800-530-5189, local phone or text at 416-751-2066, or by e-mail at info@carsonproxy.com.

Ensuring a fair and proper vote at the meeting

Mithaq is taking action to protect all shareholders by attempting to ensure the sorts of serious irregularities that took place at the 2023 annual general meeting cannot reoccur. As previously disclosed, Mithaq has obtained evidence that Aimia's then-leadership inappropriately influenced the voting of proxies submitted in connection with the 2023 meeting. Had this conduct not occurred, Mithaq believes that none of the Aimia management nominees would have been elected at the 2023 meeting.

The problematic behaviour uncovered by Mithaq is unacceptable and will not be tolerated at the meeting. Mithaq expects that the meeting be conducted in accordance with applicable corporate and securities laws, and that Aimia will respect the right of shareholders to vote on all matters brought before the meeting, including those shareholders who vote by proxy.

In particular, Mithaq has formally requested Aimia's co-operation and confirmation in advance of the meeting that, among other things: (a) an independent chair, not affiliated with Aimia, will oversee the meeting; (b) an independent organization, not affiliated with Aimia, will scrutineer the meeting; and (c) Mithaq be permitted to conduct a comprehensive proxy review immediately following the meeting, should it request such a review. Without Aimia's co-operation, Mithaq intends to seek assistance from the courts to ensure the conduct of the meeting complies with applicable corporate and securities laws.

Letter to Aimia shareholders

Mithaq also released a letter to Aimia shareholders today, outlining the need for meaningful action and change at the board and management levels at Aimia. The full text of the letter follows.

To the shareholders of Aimia:

Mithaq Capital is committed to ensuring the protection of shareholders' wealth and the creation of value at Aimia through an accountable board and management team with significant equity ownership and shareholder representation. Aimia's past and present board of directors, and management, have left us with no other option than to safeguard our financial interests by taking a more active role in Aimia. In doing so, we believe we will not only protect shareholders from continued value erosion but also create value going forward.

Despite the board's recent attempts to entrench itself through dilutive share issuances, we are still the largest shareholder of Aimia, holding 26,893,588 common shares of Aimia, representing approximately 26.98 per cent of the outstanding shares as of May 27, 2024, the record date for Aimia's annual general meeting to be held on June 26, 2024.

We began acquiring our position in early 2020, and we continue to have faith that we can protect, unlock and create long-term value at the company. In deciding how to vote at the coming meeting, we believe that Aimia's shareholders need to know the facts about the disappointing state of affairs at Aimia.

We hope this letter will help you to understand why we have lost trust in the current board and management, and why we have decided to nominate our own slate of directors for election to the board at the meeting. Further information about the Mithaq nominees can be found in the accompanying information circular.

A disappointing state of affairs

We were initially attracted to Aimia as an investment because of the wide gap between the market price of the shares and what we considered to be the intrinsic value in the company. Our view was that Aimia's cash, underlying portfolio company values, tax losses to be carried forward and deducted against future profits, and the potential of Aimia's investment policy were, together, worth more than what the company was being given credit for in the market. We expected this valuation disconnect would narrow over time.

During 2021, we increased our position and began engaging with Aimia's then management team, highlighting our concerns regarding management compensation, particularly the lack of tangible and/or calculable performance-based key performance indicators, which would bring more transparency to executive compensation and reward management for performance rather than for just showing up. We were told by Aimia's former chief executive officer that he fully agreed with our perspective and was working diligently to address these issues. As would become characteristic of Aimia's board and management, however, these assurances would never materialize into any concrete actions.

In 2022, Aimia sold one of its portfolio companies, PLM Premier SAPI de CV, and received $541-million in cash. At the time, Aimia was trading significantly below the cash on its balance sheet, which represented approximately $6.80 per share compared with the market price at the time of approximately $3.50 per share. We took the opportunity with both hands and had increased our stake in Aimia to 19.9 per cent by April, 2023.

After receiving the PLM proceeds, during the Q2 2022 earnings call, Aimia's then chief executive officer said that "Aimia intends to deploy most of the proceeds towards the acquisition of majority or significant minority stakes in cash-generative businesses operating in either the U.S. or Canada, that will ideally utilize our sizable tax losses." In the company's earnings release for Q4 2021, it also stated that "Aimia also intends to allocate up to $75-million of the net proceeds [from PLM] towards a combination of opportunistic share buybacks and/or a special dividend to common shareholders."

While we were supportive of these initiatives, none of them ever materialized -- Aimia neither declared a special dividend nor fully utilized share buybacks. Aimia instead announced the acquisition of Tufropes (now Cortland International), a rope manufacturer in India. The acquisition was for a hefty price with an untested partner and in a jurisdiction where Aimia's tax losses could not be utilized, which made us question management's competence, whether adequate due diligence had been conducted and, ultimately, the board's oversight of management and its commitment to act in the best interests of Aimia and its shareholders.

As responsible stewards of our capital, we performed due diligence on Tufropes based on publicly available information, including historical financial statements and corporate filings, and export shipment data available through service providers. Upon completing our due diligence, we had serious concerns about the transaction, including that the valuation multiple that Aimia paid for this commoditized business, with its deteriorating growth profile, did not make economic sense. Being Aimia's largest shareholder, we communicated our concerns to Aimia's management and the board, suggesting that Aimia either explore options to terminate the transaction or submit it to shareholders for approval. Instead of discussing our views or providing information to address our concerns, the then chairman of the board threatened us with litigation.

Unfortunately, time proved that our concerns about Tufropes were well founded. Acquiring a 100-per-cent equity stake in a company operating thousands of miles away without a management team that has skin in the game was a gross investment blunder. When acquiring companies, our hero, Warren Buffett, has a rule, "Management in place (we can't supply it)." Aimia exacerbated this blunder with another blunder by sharing a preferred return with an untested partner that came into existence in January, 2022, Paladin Private Equity LLC. Instead of acquiring businesses in the United States and Canada, where most of Aimia's tax losses could be utilized, Aimia followed the Tufropes acquisition with its acquisition of Bozzetto Group in Italy, with the same untested partner to whom Aimia shareholders would pay management fees and carried interest, also in a country where Aimia's tax losses could not be utilized. Over time, we have learned that many other shareholders share our displeasure with Aimia's focus on far-afield private equity transactions.

With Aimia's investment strategy seemingly going off the rails, we increased our ownership position in Aimia to 30.96 per cent, with the aim of taking a more active role in Aimia's strategic direction, and to stop the board and management from further destroying value. Since then, the board has completely lost sight of its fiduciary duty to act in the best interests of Aimia and its shareholders, and has instead engaged in a scorched-earth campaign of entrenchment at the expense of shareholders, both in terms of the value destruction caused by distraction and the astronomical fees paid to Aimia's external legal, financial and other advisers.

In the last nine months alone, Aimia's entrenched board has issued 10,475,000 shares to board-friendly investors and 5.04 million shares to Paladin, a related party of Aimia, despite promises from the board and management to return capital to shareholders through share buybacks. Aimia's management engaged in improper conduct at the 2023 annual general meeting and we believe that, had that conduct not occurred, none of the Aimia management nominees would have been elected at that meeting. In 2023 alone, the board spent $50-million on fees and other costs (including $8.7-million in fees to external advisers).

"You can't make a good deal with a bad person," said Mr. Buffett.

The board's increasingly worrying tactics are nothing more than an attempt to intimidate, divide and silence its shareholders. The board as currently constituted is both unwilling and incapable of acting in the best interests of Aimia and its shareholders for many reasons, including:

• A lack of ownership and the resulting lack of alignment with shareholder interests;
• A record of weak capital allocation decisions and acquisitions;
• A compensation structure that rewards management for failure; and
• A misaligned and value-destructive investment strategy.

Mistake after mistake after mistake

Aimia's management, with the approval of the board, has made a long series of mistakes during our time as shareholders, and it has become clear over time that the board members are concerned more with retaining control and enriching themselves than generating value for shareholders. The following mistakes stand out to us as particularly egregious, though this list is by no means exhaustive:

• Aimia acquired Mittleman Investment Management (MIM) in April, 2020. According to Aimia's public filings, Aimia paid $16.4-million in cash and shares for MIM. The result? In 2023, MIM was shut down and the investment, representing 6 per cent of Aimia's current market capitalization, was written off. Before it was written off, however, Aimia was able to use the shares held by MIM to vote in favour of the incumbent board at the 2023 AGM, ensuring that control was maintained at the expense of shareholders.
• Between July and December, 2021, the board agreed to invest $75.6-million into TradeX. In December, 2023, TradeX entered receivership, rendering Aimia's investment in TradeX worthless. The $75.6-million investment represents approximately 27 per cent of Aimia's market capitalization today.
• In 2023, the board initiated legal proceedings against significant shareholders, including Mithaq. The current board maintains its legal action against us in its bid to retain control at all costs, including at the direct expense of shareholders. Aimia spent over $8-million in 2023 pursuing shareholders who had the best interests of the company at heart.
• Aimia acquired Tufropes, an Indian ropes manufacturer and exporter in March, 2023. As noted above, we warned at the time that Aimia was paying full price or even overpaying for this asset, and believed better value could be found in North American companies, both public and private. Aimia then acquired Cortland International, another ropes business. Results have proved our concerns were valid. At the investor day in September, 2023, management indicated expected EBITDA (earnings before interest, taxes, depreciation and amortization) from Tufropes of between $16-million and $17-million. When Aimia finally released its 2023 annual results, the combined Tufropes and Cortland International businesses' actual EBITDA was $11-million. This means that the board agreed to acquire a rope manufacturer in India for over 20 times 2023 EBITDA, double the 10.7 times they estimated at the time of the acquisition.
• Aimia acquired both Tufropes and Bozzetto Group through seeding Paladin. One of the partners of Paladin, until his recent departure, was the son of one of the investors in the 2023 private placement described further below. Under normal circumstances, Aimia would have augmented its return by taking a stake in Paladin and yet Aimia received nothing. It seems from publicly available information about Paladin that Aimia's transactions are its only deals. Why did Aimia need Paladin and how much did it cost shareholders?
• Aimia spent $40-million on fees in 2023 (14 per cent of its current market capitalization) and a further $8.7-million on costs to entrench itself in opposition to its largest shareholders, including Mithaq. Combined, that is nearly $50-million of costs, representing over 17 per cent of Aimia's market capitalization, in one year.
• Aimia raised $32.4-million through an unnecessary, dilutive private placement. At the time, we had made an offer to shareholders to acquire all of their Shares for $3.66 per share and yet the board decided to raise capital in a private placement open to only an exclusive few investors at a price of $3.10 per share, a price that represented a significant discount to the trading price at the time, particularly when the value of warrants issued as part of the private placement described below are taken into account. Who benefited from this discounted price? Among others, the current executive chairman subscribed for part of the issuance, which represented approximately 10 per cent of the currently outstanding shares.
• On top of the private placement shares issued at $3.10, Aimia further diluted the interests of current shareholders by issuing five-year warrants at an exercise price of $3.70, at no cost to subscribers. Again, the current executive chairman and parties close to him stand to benefit from these warrants. While the value of the warrants is difficult to calculate, our financial expert concluded that the implied consideration received by Aimia per share in the private placement, after taking into account the issuance of the warrants, was between $1.76 and $2.12, depending on the valuation date, representing a discount to the offer price of between 42 per cent and 52 per cent. These warrants give the holders the right to buy shares representing approximately 10 per cent of the currently outstanding shares.
• Aimia issued over five million shares to Paladin at a price of $2.50 per share, representing a discount of approximately 57 per cent to reported net asset value (NAV) at the time and being only 6 per cent above the three-year trading low. These shares were issued shortly before the record date for the meeting and, only two weeks later, Aimia announced a normal course issuer bid to repurchase up to seven million shares. While the board has sought to justify these two actions independently, the net result will be an increase in outstanding shares held by board-friendly parties for the exact period required to vote them at the meeting at the expense of shareholders, who will once again lose value through both dilution and fees.
• The recent circular filed by Aimia's management includes a promise to launch a share buyback. Of course, we support that strategy. However, this is not the first time that the Aimia has promised a buyback. On Sept. 27, 2023, one of the two priorities put forward by Aimia was to implement share buybacks. Have they delivered on that priority? At the time, Aimia had approximately 84 million shares outstanding and the promised share buybacks should have reduced that number. Today, almost nine months later, Aimia has 99 million shares outstanding. Instead of delivering on its promises, the board members have, as usual, sought to entrench themselves in seats they do not deserve to hold by issuing 15 million additional shares to friendly parties.

In addition to the continuing value destruction, the board has a history of concerning disclosures and governance practices, including most recently:

• Refusing to provide adequate disclosure to shareholders of the process undertaken by the board and any special committee in negotiating the termination of Aimia's agreements with Paladin, a related party of Aimia.
• Unnecessarily delaying the calling of the meeting, such that the record date fell after the issuance of 5.04 million shares to Paladin, presumably with the objective of increasing the board's likelihood of re-election.
• For the second year in a row, engaging in the highly unusual and undemocratic practice of abridging the usual period between providing notice of and holding an AGM, and failing to provide the amount of notice required under corporate law.
• Failing to timely disclose the departure of Karen Basian, the lead independent director and chair of the audit committee, from the board other than by removing her profile from Aimia's website.

Our view, which we believe is reflected in the current share price, is that shareholders have had enough.

A reliable fiduciary of shareholders' wealth

It is time for a new board with business acumen and ethical standards to clean up the mess that has been created, and realize the full value of Aimia for its shareholders through efficient capital allocation and management. We have nominated the six Mithaq nominees for election to the board at the meeting because we believe they are up to that task. We propose the following 10 steps for the newly reconstituted board to get Aimia back on track:

1. Get to work for all shareholders to achieve the best possible outcomes immediately after the meeting.
2. Choose to maximize returns for shareholders and harvest all excess capital from any low-return businesses to deploy it in high-quality, high-return businesses. Aimia will be opportunistic and, depending on the market environment, will diversify its investments in public equities and private equity.
3. Reclaim and reverse prior transactions where possible. This will involve pursuing those who have disadvantaged other shareholders for their own enrichment. Aimia will conduct a comprehensive review of amounts paid to advisers (thus far undisclosed) who benefited from the millions of dollars paid in fees in 2023.
4. Run Aimia with minimal overhead. Aimia's current overhead is approximately $15-million annually and the company has 18 employees. If Berkshire Hathaway can manage $1-trillion (U.S.) with less than 30 employees, then Aimia can manage its $500-million portfolio with fewer employees.
5. Rationalize assets, allowing shareholders to calculate a reliable NAV. We would also maintain a permanent opportunistic share buyback program to keep the share price closer to NAV.
6. Immediately seek to unlock value by exploring partial and full asset sales where public and private markets provide the opportunity. Nothing will be sacred, as the reconstituted board will act without nostalgia for prior investment decisions that have destroyed value.
7. Seek to optimize investment decisions to utilize Aimia's net operating losses (NOLs) and hunt for operating businesses with first-class management teams that will retain significant equity ownership. The utilization of NOLs will never be the sole driver for an investment decision, but it will be one consideration among many.
8. As available capital allows, the reconstituted board will consider opportunistically buying back Aimia's preferred debt, which currently yields over 9 per cent.
9. Cease wasteful spending on external advisers, reduce the company's audit fee expense (which has grown from $700,000 in 2022 to $2.7-million in 2023), and work rigorously to keep non-core fees and expenses to reasonable levels.
10. Most importantly, the newly reconstituted board will govern Aimia with unshakable reliability and integrity. These two simple yet powerful traits should reward long-suffering Aimia shareholders, including us, who have had to swallow the consequences of the board's mistakes and self-interested behaviour.

Your support is required

Shareholders have a decision to make about the fate of Aimia. Your vote is critical to initiate much-needed change at Aimia, and we encourage you to vote for the Mithaq nominees on the gold form of proxy or gold voting instruction form by 5 p.m. (Toronto time) on Friday, June 21, 2024, or, in the event the meeting is adjourned/postponed, no later than three business days immediately preceding the day of such adjourned/postponed meeting.

Shareholders who have questions or who are willing to express their support for the Mithaq nominees but require assistance in doing so may contact our proxy solicitor, Carson Proxy, for more information at North American toll-free phone at 1-800-530-5189, local phone or text at 416-751-2066, or by e-mail at info@carsonproxy.com.

Cordially,

Mr. AlRajhi

Additional information

The following disclosure is provided pursuant to the Canada Business Corporations Act and Section 9.2(4) of National Instrument 51-102 -- Continuous Disclosure Obligations in accordance with corporate and securities laws applicable to public broadcast solicitations.

This news release and any solicitation made by Mithaq in advance of the meeting is, or will be, as applicable, made by Mithaq, and not by or on behalf of the management of Aimia. All costs incurred for any solicitation will be borne by Mithaq, provided that, subject to applicable law, Mithaq may seek reimbursement from Aimia of Mithaq's out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection therewith.

Proxies may be solicited by Mithaq pursuant to the Mithaq circular sent to Aimia shareholders and by, or on behalf of, Mithaq by mail, telephone, fax, e-mail or other electronic means, as well as by newspaper or other media advertising, and in person by directors, officers and employees of Mithaq who will not be specifically remunerated therefor. Mithaq may also solicit proxies in reliance on applicable exemptions to the solicitation requirements under corporate and securities laws, which may include by way of public broadcast, including through press releases, speeches or publications, and in any other manner permitted under applicable laws. Mithaq may engage the services of one or more agents, and authorize other persons to assist in soliciting proxies on behalf of Mithaq.

Mithaq has retained Carson Proxy to assist Mithaq in soliciting Aimia shareholders. Carson Proxy's responsibilities will principally include providing certain advisory and related services, including proxy solicitation. The anticipated cost of any solicitation is estimated to be up to $175,000, plus disbursements and success fee (if applicable).

Proxies may be revoked by instrument in writing by the shareholder giving the proxy or by its duly authorized officer or attorney, or in any other manner permitted under corporate and securities laws. Except as disclosed in this press release, none of Mithaq or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, (i) in any transaction since the beginning of Aimia's most recently completed financial year, or in any proposed transaction that has materially affected or would materially affect Aimia or any of its subsidiaries; or (ii) by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at the meeting other than the election of directors or the appointment of auditor. On Oct. 3, 2023, Mithaq announced that it intended to commence of a formal offer by Mithaq Canada Inc., a wholly owned subsidiary of Mithaq, to acquire all of the issued and outstanding common shares of Aimia not already owned by Mithaq or its affiliates for cash consideration of $3.66 per common share. The offer formally commenced on Oct. 5, 2023, and subsequently expired and terminated at 11:59 p.m. (Vancouver time) on Feb. 15, 2024, without any shares being taken up and acquired by Mithaq.

Advisers

Mithaq has retained Carson Proxy as its proxy solicitor. Torys LLP is acting as legal counsel.

About Mithaq Capital SPC

Mithaq is a segregated portfolio company and affiliate of Mithaq Holding Company, a decentralized family office headquartered in Saudi Arabia with investments in public equities, private equity, real estate and income-producing assets in local and international markets.

We seek Safe Harbor.