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Friday, May 20, 2016
Bankruptcy for Code Rebel: Yet Another Hawaii High Tech Tax Credit Implosion
By Andrew Walden @ 2:22 AM :: 10312 Views :: Tax Credits


Code Rebel files for Chapter 7 bankruptcy

From, May 18, 2016

On May 17, 2016, Aegis Identity Software, Inc., a Delaware corporation provided a letter to Code Rebel Corporation, that terminated the Agreement and Plan of Merger dated March 11, 2016, by and among Aegis, the Company and CR Acquisition Corporation, a Delaware corporation wholly owned by the Company.


  • On May 18, 2016, Code Rebel Corporation commenced a bankruptcy case by filing a voluntary petition for relief under the provisions of chapter 7 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. in the United States Bankruptcy Court for the District of Delaware. As a result of the filing of the Chapter 7 Case, a Chapter 7 trustee will be appointed by the Bankruptcy Court and will assume control of the Company. The assets of the Company will be liquidated in accordance with the Code. The Company's board of directors, after spending considerable time and effort attempting to pursue and complete strategic alternatives to finance, restructure or sell the Company and not being successful, concluded that no viable options remained for continuing operations, and that the Chapter 7 case is the only alternative available
  • Each of the directors of the Company: Arben Kryeziu, Volodymyr Bykov, James Canton, Ph.D. and David Dwelle, are resigning from the Company's board of directors effective after the filing of the Chapter 7 Case and on the date hereof. Each of the officers of the Company, including Reid Dabney, Chief Financial Officer and Secretary, are resigning their officer positions and will cease to be employees of the Company effective after the filing of the Chapter 7 Case and on the date hereof.

  *   *   *   *   *


by Andrew Walden

Citing “questions regarding the accuracy of statements” in the company’s financial reports, the Securities and Exchange Commission Friday suspended trading in the shares of Maui-based ‘Code Rebel’ (CDRB).  Most likely the questionable financial statements were exposed during Code Rebel’s March, 2016 effort to merge with Denver-based Aegis.  

This is the latest in a long list of Hawaii high-tech implosions – while all the time burning a billion dollars worth of Act 215/221 High Tech Tax Credits without any oversight.

Here are the details….

PBN May 6, 2016 reports:

Code Rebel was the first Hawaii-based technology company to IPO since Hoku Corp. went public in August 2005. (And we all know how that ended.)

Code Rebel’s sole product is its iRAPP terminal service software, which allows users of Windows PCs and Apple computers to simultaneously access programs on their PCs and Macs through a single device using a single monitor, mouse and keyboard.  (Lotta litigation over claims of stolen software.)

Previously analysts had raised concerns about the company’s weak fundamentals.

Code Rebel was founded by Arben Kryeziu, a general partner in Maui-based venture capital fund mbloom Ventures LLC, which was embroiled in controversy in 2014 after announcing its investment in two companies founded by the fund’s general partners. One of the companies the venture capital fund invested in was Flikdate, a mobile dating app, whose chief technology officer was also Kryeziu.

Wikipedia points out:

In 2005, the owner of Code Rebel, Arben Kane (he changed his name from Kryeziu), was associated with the controversial Cherry OS project. Critics alleged that CherryOS contained code grafted from PearPC, which would have been a violation of the GNU General Public License.[18] In March of 2011, Code Rebel's competitor Aqua Connect, Inc. filed suit against Code Rebel claiming misappropriation of trade secrets.[19] The Cherry OS controversy was used by Aqua Connect's lawyers in an attempt to discredit Code Rebel and Kane.[20]

A 2004 Slashdot reviewer isn’t fooled:

CherryBS continues "PearPC developers who have seen CherryOS have confirmed it is a fraud, while others remaining anonymous have posted the 'strings' output that CherryOS and PearPC share, showing many function names, warning/informational message strings that exist verbatim in PearPC. Additionally, now-pulled screenshots of CherryOS, mirrored in the long thread at, show CherryOS's boot process revealing variable names and missing or incorrectly emulated hardware in such a way as to be specific to PearPC. Arben Kryeziu, the developer of CherryOS, claims that no code has been taken from PearPC whatsoever, and that he will release a trial version this week. However, with the amount of deception on the part of the company, and considering this wouldn't be the first time he's violated the GPL, it's hard to believe they're telling the truth.

A SEC statement dated May 6, 2016 reads:

The Securities and Exchange Commission (“Commission”) announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the "Exchange Act"), of trading in the securities of Code Rebel Corporation ("CDRB”), of Kahului, Hawaii at 9:30 a.m. on May 6, 2016, and terminating at 11:59 p.m. on May 19, 2016.

The Commission temporarily suspended trading in the securities of Code Rebel Corporation because of questions regarding the accuracy of statements in CDRB’s Forms 10-Q for the quarters ended June 30, 2015 and September 30, 2015, and the Form 10-K for the year ending December 31, 2015, concerning the company’s assets and financial condition. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The text of the SEC Order explains

It appears to the Securities and Exchange Commission that there is a lack of accurate information concerning the securities of Code Rebel Corporation (“CDRB”) because of questions regarding the accuracy of statements in CDRB’s Forms 10-Q for the quarters ended June 30, 2015 and September 30, 2015, and the Form 10-K for the year ending December 31, 2015, concerning the company’s assets and financial condition. CDRB is a Delaware corporation with its principal executive offices in Kahului, Hawaii. Its stock is listed on NASDAQ under the symbol CDRB.

Your tax dollars at work.


SA: SEC freezes trading of isle company’s stock




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