Alberta Securities Commission issues halt trade order against Vancouver’s Softlab9; and warns against Bitcoin binary financial scams

By Christine Duhaime | June 29th, 2020

The Alberta Securities Commission (“ASC“) issued two notices today. The first was a warning about a company called “Claim Central” which purports to be an asset recovery agency claiming to be capable of recovering funds from the numerous binary financial scams that have targeted Canadians in the past. In order to activate a claim, Claim Central asks claimants to send them $550 in Bitcoin upfront. The ASC says that the scam is using the names of real persons in order to give it legitimacy.

Softlab9 Software Solutions Inc.

The second notice from the ASC was of a temporary halt trade order against a British Columbia issuer named Softlab9 Software Solutions Inc. (“Softlab“). The order prohibits the trading in all the securities of Softlab. No reason is given for the halt trade except that the ASC notice mentioned the ASC’s ability to halt trade when there are unexplained fluctuations in the trading of securities. To that point, Stockwatch noted that the price of its securities went to $1.39 from $0.39, and that it was promoting a disinfectant and alleged facilities being built in Alberta.

The auditor of Softlab is Saturna Group in Vancouver.

Its SEDAR profile says that it is in the business of industrial products. It’s press releases, however, say that it is a Blockchain company. There is no filing on SEDAR regarding a change of business to pivot into the disinfectant manufacturing industry, even though it appears that the existing disclosure record cannot be relied upon by investors to fairly value its securities.

The company appears to have no office in British Columbia, despite being an issuer there.

Despite filings of press releases announcing material events including deals, contracts, acquisitions, debt covenants, joint ventures and allegedly a contract for the manufacturing of disinfectants, including for Covid-19 purposes, there appears to be not one material contract filed on SEDAR from 2018 to the present.

It recently released a press release in respect of Covid-19 and a prospective deal with something called “clean go green go” which it represents creates a “new line of defence against viral and bacterial agents, including the human coronavirus” which allegedly can help “curb the spread of the Covid-19 pandemic,” which then quotes a car wash person in Canada.

There is no known cure for Covid-19 and there is no basis in securities disclosure for a car wash person to opine in respect of Covid-19 for an issuer.

Not too long ago, the Vancouver issuer stated that it was a “FinTech and Blockchain incubator,” and alluded to having a US entity that rented space in South Carolina to focus on Blockchain technology that it said it had created in order to streamline alleged processes for due diligence and compliance using intelligence from 200 global parters.

The issuer also announced something called CatchCoin, which it stated is a Blockchain app, and it alleged that it had entered into agreements for the provision of services to catch coins. It raised $1.9 million to buy the coin-catching app. The app does not appear on the app pages of any app stores as at today’s date. Apparently, it disposed of substantially all of the undertaking of the CatchCoin $1.9 million investment but there are no material contracts in respect thereof on SEDAR. To whom it was disposed of and for what consideration for shareholders has not been disclosed yet.

A website (link here) for different technology that it stated on SEDAR was fully operational and generating revenues does not open.

Subsequently, it announced it was getting into the cannabis space when that was a hot market.

And now the Covid-19 space.

Before the ASC acted, it is likely that the securities of Softlab may have been halt traded by market regulators in any event because of its announced foray into manufacturing of industrial disinfectants, which appears to be a change of business and a fundamental change.

As at December 31, 2019, according to its audited financial statements, Softlab had only approximately $7,000 in cash and had paid over $600,000 in consulting and management fees in the operating year. Its working capital as at that date was – $690,343.

And its accumulated deficit? – $7,474,729.

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