The Stockholm IT breach of contract
It is our unfortunate duty to report, that the contract between Stockholm IT and Wyrify stakeholders has been seriously breached by the actions of Stockholm IT, causing Wyrify to lose five months of valuable development time and incur vast reputational risks. After giving up several attempts of trying to fix the contractual relationship, Wyrify stakeholders have placed the Wyrify Assets under management in a new company (Wyrify Ltd UK), awaiting the legal conclusions on the breached contractual relationship, pursued on our behalf by law firms in the US and Sweden.
When the asset purchase of Wyrify was announced in September last year, Stockholm IT was in “reconstruction”, primarily for bankruptcy protection. When we jointly launched the Wyrify contract, the market was informed that the transaction was “closed” and “completed”, and the share price and thereby the company valuation rose sharply following the announcement. The contract stipulated that the Wyrify stakeholders would get a control block of shares and a majority board representation. This was never done, despite continuous attempts from NXChain/Wyrify to get Stockholm IT to comply with the contract provisions. On 18 December 2017, Stockholm IT acted intentionally against the contract in its EGM, despite written assurances from the board leading up to the EGM against doing so. Wyrify has since tried to get Stockholm IT back in compliance with our contract, without any results. Stockholm IT has repeatedly acted against the contract, which we have addressed in legal motions, and the latest EGM again confirms that the company is intent on not upholding its contractual obligations.
Our observations conclude that this is a pattern, based on the fact that none of the previous acquisitions announced by the company have yet been completed. According to the Börse Frankfurt official figures, there are 365 million Stockholm IT shares in issue, but the public records of announced acquisitions show 500 million shares not issued for the purchase of Fantrac, 500 million shares not issued for the acquisition of Block Technology, 450 million shares not issued for the acquisition of Pimboo, and 1090 million shares missing for the acquisition of Wyrify (up to >2 billion with a successful ICO/IBO). This means there will be upwards towards 4 billion shares in the company, around ten times as many as the official number of shares in issue. With the alleged €200 million mining purchase announcement from Stockholm IT in January 2018, contracting a “significant shareholding” to the sellers of yet another acquisition, the pattern continues.
We are aware of Stockholm IT management claiming to be doing a corporate review-process (known as a Due Diligence, “DD”) on Wyrify, stated as late as last week in live webcasts to investors. This is incorrect. The DD room was closed for access on 23 December 2017, subsequent to that first breach of contract on 18 December. Since then, no DD has been done. The DD was waived in the original contract, and the mentioned online DD-room was only set up for simplicity of reviewing the assets transferred. Wyrify is an asset (not a company), thereby necessitating an online checklist of items received.
The decision of taking the Wyrify assets under management and away from Stockholm IT comes after several hindrances, five months of stalling tactics, a lot of surfacing information from shareholders and option/warrant holders, and despite our best intentions and efforts. Unfortunately, our DD of Stockholm IT and ongoing work with shareholders has uncovered a series of events and transactions we conclude would also suspend the acquisition contract, independent of the registered contract breaches. Several are of a serious character, and Wyrify has found it necessary to report these to the German financial inspection for further investigation, which will be done following the transfer of the Wyrify asset to their new management company.
With the repossession of control over the Wyrify assets, we are re-launching Wyrify, the IBO and several lines of business, which we will be announcing details about shortly.