CEN Biotech Inc (CENBF)

[Greensmeans]

Brian only comes clean when pressed.


14.

As detailed at paragraplis

(a)( Bridging discovered in October 2016 ) that accounts had been opened in Thomas Canning's name at Royal Bank of Canada ("RBC") and that funds had been paid in and out of those accounts. This was a direct violation of the terms of the Borrower's cash management arrangements with Bridging and, at the time, the Toronto-Dominion Bank ("TD"). Thomas Canning's Vice President and Chief Operating Officer at the time, Brian Payne, disclosed the existence of the RBC accounts and the fact that receipts had been diverted thereto and that disbursements had been made therefrom.

(b)

When Bridging was given access to the RBC account statements, it was revealed that a total of US$215,000 and CDN$178,000 had been collected from customers and deposited into the RBC accounts in or about May and June 2016, without any update to the Borrower's accounts receivable ledger. Some funds were used to pay accounts payable directly from the RBC accounts, some were forwarded to the TD blocked accounts, some funds were wired from the RBC USD account to the Borrower's foreign exchange broker to then pay USD accounts payable and US$51,000 to the personal account of John and Shirley Thomas, and $10,000 had been withdrawn in cash.