SOURCE: CEN Biotech Inc.

May 26, 2016 12:09 ET

CEN Biotech Inc. Shareholder Update

LAKESHORE, ON--(Marketwired - May 26, 2016) - CEN Biotech Inc. (A Canadian Corporation) announces the following update on May 26, 2016.

As a preliminary note, CEN Biotech wishes to thank all of its shareholders for their patience and positive attitude with the company through this very exciting time with the Company heading out on its own. Please know that we are working diligently and tirelessly to bring the most value to each shareholder's investment, and to bring about the success for which the company strives. So, thank you all for your encouragement and patience. There are no words to express the Company's profound appreciation for all of the support from its shareholders. 

As all of the shareholders know, CEN Biotech, Inc. spun off from its prior parent Company Creative Edge Nutrition, Inc. As you also know, the Form 10-12g registration was filed the first week of January, 2016, with the record date for receiving the share dividend was November 30, 2015 and the distribution date occurred on February 29, 2016. The purpose of the Form 10 filing is essentially to qualify for an exemption to the registration filing requirements (of Section 5) for the dividend shares.

In order to qualify for the registration exemption, several requirements must be satisfied. The Securities and Exchange Commission as well as FINRA oversee the process. The SEC's involvement with such a Form 10-12g filing is primarily to ensure that all of the exemption requirements are met. The SEC also ensures that the corporate and financial information is correct, and that all securities laws are complied with. In the course of its scrutiny over such filings, the SEC issues "Comment Letters" to the Company, which identify any questions, concerns or possible securities law violations that could occur based on the circumstances of any particular filing. The Company must file a response to each SEC Comment Letter, addressing each concern and/or question. While the Form 10 filing was pending -- between September 2015 and May 22, 2016 -- the Company received 5 different comment letters to which CEN responded. 

In the final Comment Letter the SEC identified certain questions as to whether the filing satisfied all of the requirements for the registration exemption, which, if not satisfied, could result in liability for the company, as well as for shareholders for selling unregistered securities, among other securities law violations. One violation that is incurable is the fact that, because Creative Edge Nutrition had an extension to file its financials, it filed on March 1, 2016; however, for the purposes of satisfying the registration exemption requirements, those financials were required to have been filed as of February 29, 2016. In addition, the SEC believed that the notice provided to its shareholders was insufficient, because many shareholders did not receive the individual mailing. To its credit, such notice was also provided in a special press release introducing the spin-off, and on the EDGAR filing system, yet did not constitute separate notice to each and every shareholder. In fact, either one of those insufficiencies, if true, would by itself disqualify the CEN shares from the registration exemption; and, again, any subsequent sale of such stock could result in securities law violations.

The possibility that any shareholder may incur liability for securities law violations is unacceptable to the Company. Therefore, in an abundance of caution to protect all of its shareholders, and due to the fact that much of the information and due diligence has been accumulated through the Form 10 filing (including its audits), the Company has determined it necessary to file an actual S-1 registration filing, which when complete, would render all CEN stock under such registration (mainly to the dividend shares) as free trading. The S-1 filing would be necessary to ensure the complete protection of all CEN shareholders, even those whose shares were already considered free trading. 

CEN Biotech asks you to be patient with it in finalizing the S-1 filing. We promise you we are trying to complete the registration process as soon as possible. CEN shall put out another press release in the coming weeks to provide a status update of the filing.

Contact Information