Spriza, Inc. (“Spriza” or the “Company”) (OTCBB:SPRZ). Spriza is
in the business of building and managing a social network platform
for companies and advertising agencies to build their brand and
market share by offering group prizes and incentives to the public.
Spriza is issuing this news release in response to and at the
request of the Alberta Securities Commission (the “ASC”) in
connection with the temporary halt trade order (the “Halt Trade
Order”) issued by the ASC and the United States Securities and
Exchange Commission.
Unauthorized Third Party Campaigns
On or about February 9, 2015, the Company became aware of two
unauthorized third parties that had initiated two promotional
campaigns touting the growth of Spriza and its common stock. An
unauthorized third promotional campaign was initiated on February
18, 2015. Spriza has had no communication with any of these
unauthorized third party promotional campaigns and at the guidance
of its US counsel has initiated Cease and Desist orders where
possible, including to Financial Times Publishing Corp, Ltd., which
owns StreetReview.com, and Black Lotus, which hosts
StreetReview.com.
Prior to the initiation of the unauthorized promotional
campaigns, the shares of Spriza traded in small volumes in an
orderly fashion. The unauthorized promotional campaigns coincided
with, and may have effected, a significant increase in Spriza’s
trading volume and share price volatility between January 28, 2015
and February 24, 2015.
There are three unauthorized third party promotional campaigns
that the Company is aware of:
- A report dated January 28, 2015 by
StreetReview which states it is owned and operated by Financial
Times Publishing Corp. Ltd with an address in New York, NY, USA.
StreetReview states “Financial times Publishing Corp. Ltd. has been
compensated sixteen thousand dollars for the production of Spriza
Inc. company report by an unaffiliated third party.” The website
also states “StreetReview and its affiliates have received or
expects to receive and manage a total advertising budget of one
hundred and seventy five thousand dollars for publishing this
advertisement”;
- An undated report by Trading Digest
Magazine (www.tradingdigest.com) which states an address in New
York, NY, USA and that they are funded by Speedwell Corporation,
Ltd. and promote The Moskowitz Report and Charles Moskowitz who
“…has been paid seventy five hundred dollars for his
contributions”. Trading Digest states “Speedwell Corporation, Ltd.,
located in Hong Kong, has made available an advertising budget of
up to two million five hundred thousand dollars”; and
- A report dated February 18, 2015 by
Advent Financial Advisors Inc. (“Advent”) which issued an
Initiation Report dated February 18, 2015. Advent does not list any
address or contact information on their Initiation Report on
Spriza. Advent states it “…received $12,000 from an unaffiliated
third party to write this report on Spriza, Inc.”
Neither Spriza nor any of its officers and directors are aware
of who beneficially owns or controls the entities funding the above
promotional campaigns, or what interest they may have in promoting
Spriza’s common stock. Furthermore the unauthorized third party
promotional campaigns have had a negative effect on Spriza’s brand
as some of the statements made in the third party reports are
extremely promotional and could mislead clients and investors as to
Spriza’s short and long term potential.
There are a number of statements in the unauthorized third party
promotional campaigns materials, including but not limited to
comparisons to large cap social media companies. While Spriza’s
platform for contest management has an operational similarity to
these well known brands, it is not to be construed that Spriza is
or will be their market equivalents. Spriza has been operational
for less than a year and while it has some success with well known
brands and agencies signing on as clients, it is still in the early
stages of growing and building its own brand and business.
Some of the third party reports imply that a variety of big
brand companies are using Spriza, when in fact these companies may
have active contests that are only hosted by Spriza on its website
as a benefit to Spriza’s subscribers. While Spriza may have
introduced itself to some of these companies and is striving to
build a client relationship, it does not mean that the brands are
aware of Spriza. These and other companies simply have open
contests available to the public and these contests are available
through Spriza’s website and Spriza has not received any fees to
aggregate and post these contests on its website.
Some of the third party reports may also quote numbers on the
digital advertising and marketing budgets available globally but do
not quote the sources for the values. There is a statement on
Spriza being “revenue positive”. While Spriza is generating
revenues, it is currently operating at a loss. Spriza is focused on
attracting new clients through its recently completed operating
system, the Android and iOS Mobile Applications, the Do It Yourself
Kit and the Agency Kit.
For clarification, Spriza launched its enhanced platform in May
of 2014 and to date has run and managed contests for seven clients
of which five paid a fee to Spriza, while two were implemented as
good will gesture to build its brand and case studies. Spriza is
also aggregating and posting a large volume of premium contests on
its website to provide a wider variety of contests and prizes to
its subscriber base, but Spriza does not receive any compensation
to post these contests on its website.
Spriza’s client list since launch in May, 2014 includes:
Pinoy Great Deals / Digital Marketing
PhilippinesMantaray Creative on behalf of WWMV / Rock n Roll
Fantasy Camp CanadaMembers Canada / on behalf of 8580243 CANADA
INCCowboys / SmithbuiltTLINK GOLF INCDouble Down Interactive,
LLCiProspect & EDEN CHEESE
The aforementioned clients are the only entities that Spriza has
entered into a contract with to date. Any suggestions to the
contrary in third party marketing materials should not be relied
upon.
Alberta Securities Commission Review of Spriza’s Disclosure
Staff at the ASC has determined that, in their view, certain of
the Company’s previous disclosure, including disclosure in a Form
8-K dated January 16, 2015 and filed on SEDAR on January 19, 2015,
where Spriza stated or suggested the following, is misleading:
- Spriza’s ability to attract online
users rivals any other social network, including Facebook;
- Spriza can be placed in the same
valuation category as Pinterest, Facebook LinkedIn and
Twitter;
- Spriza could reach 70 million users in
roughly a year and a half;
- Spriza will be running numerous
contests at any one time; and
- Spriza is the world’s leading social
network for groups and prizes.
At the time the disclosure was made, in the ASC’s view, Spriza
did not have an adequate basis for such disclosure.
Spriza believes it is a viable and commercial business. Spriza
believes it has been forthright and cooperative with the ASC. In
respect of the statements set out above, Spriza advises investors
and potential investors as follows: (i) Spriza has limited
operating history and is in the early stages of growing and
building its own brand and business; (ii) there is no assurance
that Spriza’s business will be profitable or that the Company will
ever generate sufficient revenues to fully meet expenses and
totally support anticipated activities; (iii) Spriza is subject to
the risks generally associated with new product introductions and
applications, including lack of market acceptance, delays in
commercial implementation, and failure of products to perform as
expected; (iv) the results achieved in any prior contest may not be
indicative of results achieved for future contests; (v) the initial
results achieved in any contest may not be indicative of results
achieved throughout the duration of a contest; (vi) Spriza may
never achieve broad market acceptance; (vii) the Company’s
references to “users” includes persons that register with the
Company, visit our website and/or are directed to our website
through client databases; (viii) the financial results and growth
of other well-established social media platforms, should not be
considered indicative of the Company’s expected results and there
is no assurance that the Company will ever achieve profitable
operations or growth; (ix) while Spriza has the ability to run
numerous contests at any one time, Spriza has not yet run multiple
contests; and (x) the Company has a patent pending contest
marketing platform, SPRIZA’s Content Management System, with
hosting, distribution and real time analytic methodologies that
makes Spriza unique in the social media contest, loyalty and
charity programs space. For additional information about the
Company and the risks relating to the Company’s business, see the
Company’s annual reports on Form 10-K and the Company’s other
disclosure documents filed from time to time with the Securities
and Exchange Commission at www.sec.gov and the Company’s interim
and annual filings and other disclosure documents filed from time
to time on SEDAR at www.sedar.com.
The expiration of the Halt Trade Order does not imply that the
ASC has endorsed or otherwise approved the Company’s disclosure and
it does not preclude the ASC from taking any additional regulatory
action where deemed appropriate.
About Spriza, Inc.
Spriza, Inc. business is building a social network for group
prizes and incentives and is an emerging growth public company.
Spriza's intellectual property is a robust and effective
incentive marketing system that builds brand awareness and
generates qualified targeted leads for any size of business through
an online contest marketing solution "SPRIZA™". SPRIZA™ is modular,
scalable, and fully customizable. It taps into the power of shared
interests and personal relationships within targeted markets
producing traceable and quantifiable results at every stage of the
contest.
SPRIZA™ provides deep, real-time analytics and reporting,
through a robust tool that measures marketing and advertising
budgets for real time return on investment analysis and demographic
profiling. SPRIZA™ leverages social strategies based on business
objectives enabling branders to measure results of marketing
efforts. The result is a network of subscribers that participate in
contest promotions centered and shared around their personal
interests. SPRIZA™ produces quantifiable and verifiable participant
data results, which can be used for ongoing marketing purposes with
targeted demographics. SPRIZA™ data results assess how many
consumers responded, whom they shared the campaign with, the level
of engagement, how many other campaign participants were influenced
and sales value generated.
SPRIZA™ is designed to work with Social Media engines and offers
full mobile capability to engage popular mobile applications.
For more information, contact:
Internal
Communicationsinfo@spriza.comwww.spriza.com/investors
Media RelationsChristian Darbyshire,
416-419-9953tinepublic@shaw.ca
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