impak Coin FAQ
impak Coin – Frequently Asked Questions
Note to readers: Answers written that follow contain additional information, precisions and corrections which prevail over any expressed opinion by any intervenant during the general assembly for impak Finance shareholders on July 21, 2021. These answers represent views, but by no means legal, fiscal opinions nor representation or legal warranty given by the company or any other person. Readers are encouraged to refer to their own legal and tax advisers for any question.
The end of impak Coins
Where is the $ 1.4M that people have invested in the MPK?
The cost of the project greatly exceeded the funds raised by the ICO, even after the injection of additional capital. We were forced to abandon the project.
Specifically, where is my money?
It was invested in: (i) the technological development of the platform, (ii) the recruitment of companies offering impact products and services, (iii) the recruitment of buyers interested in impact consumption, (iv) the development of the qualification methodology for companies and their qualification, (v) administrative support for the company. The project was huge and there were insufficient funds to carry it out, even after injecting additional capital from other investors.
Can I get my money back, even if the project no longer exists?
Unfortunately, it is not possible to get back what you have invested to buy impak Coins. It was an ambitious project that involved several risks, as pointed out several times in the White Paper and the buying process, risks which you freely and explicitly accepted. We appreciate the frustration this can cause, and thank you for taking the chance with us.
Can you tell me how to transfer my impak account to Canadian dollars?
As mentioned above, it is impossible to recover the amounts invested.
I would like to have proof of capital loss for my taxes.
We strongly encourage you to consult an accountant. We cannot and will not advise regarding this topic. However, MPK holders should receive an official email from impak to potentially justify the capital loss.
It seems like you are funneling funds to a new organization. What happens to shareholders in the existing impak organization?
impak’s shareholders are still shareholders in the same way. We managed to find a viable business model, hence as shareholders you continue to be one, where now expectations are way more positive than before.
Why were the tokens never distributed to the owners and why was this coin never listed in the exchanges?
We had insufficient funds to achieve the project and this is the reason why the token was never distributed. We did the ICO to serve a B2C impact project, the token was not the project in itself. Please refer to the ICO White Paper for more information.
What are my options?
We have developed the Impak Coin (MPK) purchasing process in accordance with securities regulatory requirements. We therefore made sure to carry out a KYC (Know Your Customer) process, and to ask the questions necessary to verify the knowledge of buyers regarding cryptocurrencies and investment in general, as well as to their risk tolerance. All in order to ensure that everyone’s investment was suitable for their financial situation. The process also included a very explicit risk recognition clause, common to all private investment contracts, stating that this was a high risk investment and that MPK buyers could lose all sums invested.
Have I fallen into another scam?
No. It often happens that projects led by start-ups like us do not succeed due to a lack of sufficient funding. The Impak team worked in good faith on the project, but failed to complete it. We understand the frustration this outcome can cause and thank you for taking the risk to support the project.
Why can’t I access the impak.eco website?
The app.impak.eco site is now closed due to the cancellation of MPKs and the end of the app project. MPK holders will shortly receive an official email informing them that the market value of their investment is now $ 0.00. As mentioned, unfortunately no refund will be made in any form.
Shares in impak Finance
Does impak Finance still exist? What about my shares?
impak Finance and its team still exists. The project to develop an application promoting responsible consumption has failed due to insufficient funding, but we are continuing our Mission through our activities as an independent rating agency. Your shares are maintained there.
Do my shares go to the new entity you mention in the press release?
The new entity (the spin-off) is running an independent project with its own shareholders, of which impak is part. You remain shareholders of impak Finance, in its new form as an impact rating agency.
impak: the impact rating agency
What are you doing in this agency? I do not understand.
Our methodology for measuring and rating the social and environmental impact of companies is now available to institutional and professional investors. We help them take social and environmental impacts into account in their decision-making processes.
What effect did COVID have on your impact rating solution?
One of the effects was to postpone a B2B funding we had planned. It was hard and it took us 6 months to get back on our feet. What is interesting is that in September, the wind turned and COVID transformed into an accelerator for the demand for our impact rating agency, from both clients and regulators.
There are many companies that already do this at scale. How can you differentiate your offer?
Impact data goes beyond current 1st generation ESG analysis. The market (regulations, government, labels, the investors, etc.) is rapidly making impact data mandatory. That is why we have signed potentially significant contracts in Europe.
Do you plan to create independent investment funds or only through partnerships?
We do not create investment funds. We are a rating agency and hence, work along those who want to create them. We provide financial institutions with information so they can make more sustainable and responsible investment decisions.
Return on investment
Will the announcement of the MPK ending have an influence on the initial amount invested to buy shares?
No. Though it should be noted that the recent round was completed before the announcement of the MPK write off, and the full potential adverse consequences resulting thereof cannot be fully assessed at this time.
How does this new direction impact my investment ?
Future prospects appear better than they were a few years ago. Be assured that the shift has been made to ensure success and that so far, it has kept the corporation ongoing.
Do you think you will be able to offer dividends in the short or medium term? If so, when?
No. Because we are in a growth and investment mode in order to succeed and be competitive. Furthermore, it is not the norm for startups to offer dividends, especially in the tech industry. Dividends are mostly paid by blue chips and well-established businesses in a field that has been mature and stable for many years.
Do you plan to become listed?
No. We do not plan to become listed.
Is there a way to resell our shares on the public markets?
Referring to the Voting Trust Agreement, after a December 13, 2019, there is nothing that forbids you to make a private sale if you find a buyer (subject to any contractual agreement that can apply to you and to the purchaser’s intervention regarding to the Voting Trust Agreement, we invite you to contact the company for any validation relative to the matter). However, there is no mechanism to this effect since we are not listed nor do we have an over-the-counter market.
Responsible Financial Management
In regards to the Financial Statements, how executive salaries and “share based compensation” was handled, and have the funds raised through the ICO been used to benefit management when no revenue of substance was created, but the incredible amount of debt that was created?
First of all, the salaries of the whole team are below the market average, which is normal since we haven’t reached a profitability mode yet. Furthermore, it is essential, like the majority of start-ups, to have a stock options plan to attract the best talent.
What is the remuneration of impak’s Board of Directors since 2016 and how has it been allocated?
The Board of impak Finance is given no remuneration other than stock options conditional to their presence. We follow the norm that is applied in most start-ups.
What do you have to say about bonuses?
There was never any question of bonuses. In the financial statements, one can see that stock options have been attributed to every employee, and not only to the management. These options were attributed mostly on the basis of reduced salaries. It was a way of compensating the risks faced by our employees when sacrificing their revenue, but let’s not forget that stock options also present risks.
Can you explain why the AMF imposed a cease trade order in 2018? Why haven’t you deposited your financial statements to the AMF?
We missed the deadline because we hadn’t deposited our 2018 financial statements on time since we struggled to find an auditor willing to audit impak Coins, due to the innovative character of the transaction and uncertainty with regards to its accounting treatment. The moment we realised we would miss the deadline was when we reached out to the AMF to inform them of the situation. The cease trade order (CTO) is a regular measure for any company who has not deposited its financial statements at the prescribed time and, in our case, it was not out of bad faith. When we finally were able to find an auditor, the CTO was lifted by the AMF.
Could you please identify the flow of funds in your financial statements?
All the answers regarding expenses have been addressed in our financial statements. Auditors and an audit committee reviewed these documents every quarter and have not expressed any reservations regarding funds flows redirected towards activities other than the ones relative to the company.
Do you have and can you provide detailed fund flows relative to MPKs since the beginning? Were these funds used for other purposes?
We did not raise enough funds. Developing a B2C project requires many things, technologic development for the app, front-end, back-end as well as campaigns to create a community of responsible consumers, recruit more impact businesses and rate them. Hence, this is highly complex and expensive, and we lacked capital. Furthermore, the market was not interested in financing this kind of project via ICOs anymore after many ICOs winded up.
Why did you decide to create an impact rating agency without consulting your shareholders?
Shareholders are not meant to manage the business. Their power is to appoint the Board of directors, which has been done since it is mostly composed of skilled independants that have had success in a variety of businesses. The Board, which represents shareholders’ interests, was of course consulted and validated the strategy.
Can you tell us more about the spin off and its capital structure?
We created a spin off separated from impak in May 2021. The mandate of the spin off is to take over our B2C project, without the MPKs, and to relaunch it with success.
Is it not mandatory in Quebec to have legal documents in French?
We are of the view that all linguistic requirements have been met at this stage. As it is for private companies, we believe that it is not mandatory to publish in both languages. We made this choice for economic reasons, but also because we are seeking international funding.
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