VANCOUVER, British Columbia, Nov. 23, 2018 (GLOBE NEWSWIRE) -- Cryptobloc Technologies Corp. (“Cryptobloc” or the “Company”) (CSE: CRYP, OTC: CRYBF, Frankfurt: GR9).
At the request of the Canadian Securities Exchange (the “CSE”) and in furtherance of the Company’s effort to have its shares reinstated for trading, Cryptobloc provides the following update in respect of the imposition of a trading halt by the CSE on securities of the Company and a general corporate update.
The Company’s current management team of Mr. Rob Abenante (Chief Executive Officer) and Kent McParland (Chief Financial Officer) were not involved with and had no relationship with the Company prior to their respective appointments on June 29 and July 4, 2018, and as such disclaim responsibility for any of the Company’s activities prior to those dates. The information provided in this news release has been garnered from trading information and a review of available corporate documentation but not on any personal knowledge of Messrs. Abenante and McParland.
On May 18, 2018, the Company announced a non brokered private placement (the “Placement”) of 30 million units at $0.15 per unit for gross proceeds of up to $4.5 million. Each unit was comprised of one common share and one share purchase warrant, with each warrant entitling the holder thereof to acquire an additional common share for a period of two years at an exercise price of $0.25 per share. The Company announced that the proceeds of the Placement were to be used for general working capital and towards new acquisitions.
The Company closed the Placement and announced same on June 6, 2018. Shortly after the close of the Placement there was a sharp increase in trading activity and a resulting price decrease from approximately the $0.20 level to below $0.10. The trading activity and volume was not typical of the Company’s normal trading range. As a result, the Company was contacted by the Investment Industry Regulatory Organization of Canada (“IIROC”) and requested to issue a news release clarifying whether or not there was a material change in the Company’s operations that would account for the substantial increase in market activity.
On June 14, 2018, the Company issued a news release advising that is was unaware of any such material change in the Company’s operations that would account for the substantial increase in market activity. On the same date, Cryptobloc received an Order to Provide Information or Produce Records (a “Production Order”) from the British Columbia Securities Commission (“BCSC”) focused on options granted for the period November 1, 2017 to December 31, 2017. This was followed by additional Production Orders dated June 28 and 29, 2018 that focused on the Placement and specifically investments made in the Placement by persons who had entered into consulting agreements with the Company. The Company entered into nine consulting agreements with a variety of service providers who collectively invested $3,440,000 in the Placement, representing 22,933,335 units. The Company relied on the “Employee, Executive Officer, Director and Consultant” exemption contained in section 2.24 (the “Exemption”) of NI 45-106 Prospectus Exemptions (“NI 45-106”), to issue the securities to the consultants. NI 45-106 provides that issuers may issue securities to employees, directors, executive officers and consultants if the participation in the distribution is voluntary. While securities issued under this Exemption are subject to a seasoning period, they are not subject to a 4 month and 1 day resale restriction. Accordingly in the Company’s case, the securities were issued to the consultants on a free trading basis. Under NI 45-106, “consultant” is defined as “ a person…that: (a) is engaged to provide services to the issuer ..other than services provided in relation to a distribution; (b) provides the services under a written contract with the issuer…(c) spends or will spend a significant amount of time and attention on the affairs and business of the issuer. It is the CSE’s position that the Exemption was used inappropriately. Consequently, at the behest of the CSE, the Company has made a best efforts endeavour to contact the consultants in order to have any unsold shares and warrants returned to treasury for cancellation. There is no obligation for the consultants to do so, and to date the Company has received no response from any of the consultants to its request. The Company’s new management has cooperated (to the extent it is able) with the BCSC and provided comprehensive responses to the Production Orders.
On June 18, 2018, Cryptobloc announced that it had retained JCN Capital Corp. to lead an investor relations and marketing awareness program for the Company for a 3 month period, advised that the services were anticipated to consist of editorial write-ups, social media, video, email marketing and search engine optimization marketing and that the Company would pay JCN Capital Corp. $60,000 plus expenses for such services. On June 28, 2018, The CSE imposed a trading halt on the Company’s securities pending clarification of news.
Shortly after this on June 29, 2018, the Company’s former Chief Executive Officer Mr. Neil Stevenson-Moore resigned his position and was replaced by Mr. Rob Abenante and Messrs. Anthony Gordon Richards and Vic Shroff resigned as directors of the Company. On July 4, 2018 the Company’s former Chief Financial Officer Mr. Kenneth Clifford Phillipe resigned from his officer position and as a director of the Company and was replaced by Mr. Kent McParland. On that same date, Mr. Cameron Paddock was appointed a director. On September 21, 2018 Mr. Brian Biles resigned as a director followed by the resignation of Mr. Cameron Paddock on September 28, 2018. On November 22, 2018, Mr. Cedric (Ric) Wilson was appointed to the Board. Therefore the current directors of the Company are Messrs. Abenante, McParland and Cedric (Ric) Wilson.
Finally, in August 2018, the Company received correspondence from the Financial Industry Regulatory Authority (“FINRA”) requesting information regarding Cryptobloc’s business and corporate activities. The Company has responded to FINRA’s request.
New management is working diligently to seek reinstatement of the Company’s shares for trading on the CSE and further details on the Company’s plans going forward will be announced once this occurs. As part of the Company’s go forward plan, the Company is considering other business opportunities.
On Behalf of the Board of Directors
Robert Abenante, Chief Executive Officer.
The Canadian Securities Exchange (operated by CNSX Markets Inc.) has neither approved nor disapproved of the contents of this press release.