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Ciscom Corp
Symbol CISC
Shares Issued 53,563,831
Close 2024-05-02 C$ 0.09
Market Cap C$ 4,820,745
Recent Sedar Documents

Ciscom investor DLT reverses share exchanges

2024-05-03 16:07 ET - News Release

Mr. Drew Reid reports

DLT RESOLUTION INC. PROVIDES SHAREHOLDER UPDATE

DLT Resolution Inc. has provided an update with respect to its previously announced share exchange transactions with certain shareholders of Toronto-based Ciscom Corp.

DLT's objective in pursuing the share exchanges was to consolidate a meaningful ownership position in Ciscom with a view to championing the interests of a group of 116 concerned shareholders of Ciscom who comprised approximately 42 per cent of the issued and outstanding shares of Ciscom prior to the recent dilution resulting from additional Ciscom shares issued to certain members of the Ciscom management team over the past two months. Following a series of discussions with Ciscom's principal regulator, the Ontario Securities Commission, relating to applicable Canadian securities law requirements in connection with the share exchanges, DLT has elected to unwind in full the share exchanges with the concerned shareholders, with the effect that, as at the date hereof, and subject to the new share exchanges set out below, DLT no longer owns any shares of Ciscom and has re-entered into agreements as outlined herein. An early warning exit report and updated insider reporting will be filed by DLT in accordance with the requirements of Canadian securities laws. As consideration for the unwinding of the share exchanges, DLT will issue 2,500 common shares of DLT (being an aggregate of 290,000 DLT common shares) to each of the concerned shareholders who do not enter into new share exchange agreements with DLT, pursuant to applicable U.S. and Canadian prospectus exemptions, which DLT shares shall be subject to the standard trade restrictions under the provisions of Regulation S of the U.S. Securities Act of 1933.

The corrective unwinding is primarily designed to resolve an unintended overacquisition of Ciscom shares arising from Canadian securities laws that, among other things, deemed DLT's nil holdings in Ciscom to nevertheless include Drew Reid's then approximate 9-per-cent interest in Ciscom (inclusive of escrowed Ciscom shares of Mr. Reid) when DLT first acquired its 19.9-per-cent interest in Ciscom.

New ownership in Ciscom

In place and substitution of the share exchanges, DLT is pleased to announce that it has entered into share exchange agreements with four Ciscom shareholders, being Mr. Reid (former director, executive chair and chief executive officer of Ciscom and current director, executive chair and CEO of DLT), Shaun Power (former director of Ciscom and current executive vice-president finance of DLT), Mark Irwin (former special adviser to Ciscom and current special adviser to DLT) and Tony Liao (current director of DLT) (collectively, the subject shareholders), to acquire an aggregate of 3.02 million shares of Ciscom (representing approximately 5.6 per cent of the issued and outstanding Ciscom shares) in exchange for the issuance of 1.51 million shares of DLT (being a 1:2 share exchange ratio). Each of Mr. Reid, Mr. Irwin and Mr. Power also holds an aggregate of 5,025,000 Ciscom shares (currently representing 9.4 per cent of the issued and outstanding Ciscom shares) that remain subject to a Canadian Securities Exchange escrow agreement dated June 8, 2023, and which shall be released from escrow in tranches until June 8, 2026 (15 per cent released every six months, with the next release occurring on June 8, 2024). DLT currently anticipates that it will enter into similar share exchange agreements with such Ciscom shareholders and as and when such shares are released from escrow.

Mr. Reid, executive chairman of DLT, commenting on the foregoing, expressed gratitude to the Ontario Securities Commission for its support and commitment to maintaining robust capital markets. Mr. Reid emphasized the importance of refocusing DLT's efforts on its continuing growth initiatives while remaining hopeful for future opportunities for disenfranchised shareholders within Ciscom: "The unwinding of the share exchanges and the subsequent arrangements with the subject shareholders of Ciscom allow us to control share dilution and sharpen our focus on the many growth opportunities we are pursuing. While the Ciscom shares held by the concerned shareholders cannot be consolidated at this stage without great expense and regulatory burdens, the voice of the concerned shareholders has consolidated and is growing. DLT will continue to keep a watchful eye on Ciscom-related developments and will not hesitate to advance the interests and objectives of the concerned shareholders."

Additional information -- The Early Warning System and Related Take-Over Bid and Insider Reporting Issues

The following is provided pursuant to National Instrument 62-103 -- The Early Warning System and Related Take-Over Bid and Insider Reporting Issues in connection with the filing of an early warning report regarding the unwinding of the share exchanges described above, DLT Resolution, of 5940 S Rainbow Blvd, Ste. 400, Las Vegas, Nev., 89118, United States. Immediately prior to the unwinding, DLT beneficially owned and/or exercised control or direction over 21,682,615 (42.05 per cent) common shares of Ciscom, of 20 Bay St., suite 1110, Toronto, Ont., M5J 2N8, Canada. Immediately after the unwinding, DLT beneficially owned and/or exercised control or direction over nil common shares of Ciscom, representing 0 per cent of the issued and outstanding common shares on a non-diluted basis. The closing price per Ciscom common share on the Canadian Securities Exchange on May 2, 2024, was nine cents.

A copy of the early warning report disclosing the unwinding transaction described herein will be filed on Ciscom's SEDAR+ profile and can be obtained from DLT at 5940 S Rainbow Blvd, Ste. 400, Las Vegas, Nev., 89118, United States, or phone: 1-800-463-5465.

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