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DynaMotive Technologies appoints Interim CFO

7 December 1998

DynaMotive Technologies appoints Interim CFO and announces it will not call a shareholder's meeting to approve additional shares

    VANCOUVER, Dec. 4 /CNW-PRN/ - The Board of Directors of DynaMotive
Technologies Corporation has ratified the appointment of
Christopher S. Wallace as Interim Chief Financial Officer with the mandate to
resolve the issues surrounding the convertible debenture. The Board also
determined that the Company will not hold a shareholder's meeting to consider
approving a motion to issue additional shares as requested by holders of the
convertible debentures.
    At the request of the CD holders, the Board had given consideration to
holding a meeting of shareholders to vote on a motion to issue additional
shares pursuant to the conversion of the debenture. NASDAQ rules prevent the
issuance of more than 20% of the issued and outstanding shares at a discount
without the approval of the shareholders. Before calling the shareholder's
meeting, the Board polled the major shareholders to ask how they would vote.
The polled shareholders gave a written response and indicated overwhelmingly
that they would oppose such a motion. Of those responding, 100% representing
more than 51% of the total issued and outstanding shares, were not in favour
of the motion. A meeting will be scheduled for all CD holders prior to
Christmas in an attempt to resolve this issue for the benefit of all parties.
    Chris Wallace is President of Stirling Mercantile Corporation, a company
that structures and arranges mezzanine capital for rapidly growing
entrepreneurial businesses. Stirling Mercantile will assist DynaMotive in its
capital raising activities and the Board has approved obtaining new financing
for generating the cash to effect some form of equitable settlement with
debenture holders and to fund ongoing working capital needs of the Company.
Prior to founding Stirling, Mr. Wallace was C.O.O of a publicly traded
Merchant Bank which specialized in providing convertible debentures,
subordinated debt and equity to a wide variety of businesses. Mr. Wallace's
background in capital raising, public companies and subordinated debt will
benefit all of DynaMotive's stakeholders in resolving the convertible
debenture issue.
    Finally, the Board has selected and retained a consultant to provide an
investigation and report on possible manipulation for the purposes of
artificially depressing the stock price to effect conversions advantageous to
the Convertible Debenture holders and highly dilutive to existing
shareholders. The scope of the investigation is to determine if such behavior
has taken place and to present all affirmative findings to applicable legal
and regulatory authorities.