E Automotive Inc. Reports on Resolution and Cooperation between US subsidiary and US Department of Justice

TORONTO, Feb. 4, 2026 /CNW/ - E Automotive Inc. ("EINC" or the "Company") announced that its U.S. subsidiary, EBlock Corporation ("EBlock Corp."), entered into a Deferred Prosecution Agreement ("DPA") with the U.S. Department of Justice, Antitrust Division (the "DOJ") on January 22, 2026, to resolve charges related to activities in violation of the Sherman Antitrust Act, 15 U.S.C. § 1, and in violation of 18 U.S.C. § 1343 carried out at a company (the "Target Company") whose California assets EBlock Corp. acquired in a multi-step transaction in November 2020 (the "Acquisition"). The activity in question was unknown by EBlock Corp. when it completed the Acquisition. Upon learning of the anti-competitive practice at the Target Company's business, EBlock denounced it and took measures to stop it. As acknowledged by the DOJ in the DPA, although EBlock did not stop the conduct immediately, the conduct stopped because EBlock's repeated efforts made it stop.

At the time of the Acquisition in 2020, due to COVID-19 travel restrictions, the EBlock Corp.'s executives could not travel to the U.S. to meet the potential new employees, or facilitate integration. Certain former Target Company employees, including its CEO and managers, were kept on after the Acquisition to operate the business acquired from the Target Company. The acquired business continued to host online auctions on its own platform until July 12, 2021, after which it was moved to the Company's own transparent dealer-to-dealer auction platform (the "EBlock Platform.")

The DOJ alleged that, prior to the Acquisition (starting around October 2015), some Target Company employees conspired with the principal of a third-party used auto wholesale company ("Company B") to contravene antitrust laws.

EBlock Corp. executives first learned about coordinated bidding activity between the Target Company and Company B, including an automated shill bidding feature on the Target Company's platform, around January 21, 2021. EBlock Corp. refused to incorporate this feature into the EBlock Platform.

On or about July 23, 2021 the EBlock Corp. received an internal email flagging potentially unethical conduct at the Target Company. EBlock Corp. completed an investigation and sought outside legal counsel who concluded that the matter need not be escalated. After the investigation, EBlock Corp. took additional steps to stop the conduct, including denying Company B's principal special access to the EBlock Platform.

Despite these efforts, legacy Target Company employees continued the misconduct with Company B's principal after the platform migration, keeping their actions hidden from EBlock Corp's management. EBlock Corp.'s continued efforts resulted in a significant and continued drop in the conduct, with the conduct being completely stopped in February 2022.

EBlock Corp. has been fully cooperating with the DOJ's investigation into the Target Company's actions since becoming first aware of it on May 31, 2023. That cooperation led to the entering into of the Deferred Prosecution Agreement.

Under the terms of the Deferred Prosecution Agreement, EBlock Corp. has agreed to pay a penalty of $3.28 million, establish an appropriate compliance program, and continue its full cooperation with the DOJ's ongoing criminal investigation and any resulting prosecutions. If EBlock Corp. successfully meets its obligations under the Deferred Prosecution Agreement for the one-year term of the agreement and makes all payment obligations, the DOJ will dismiss the criminal information against EBlock Corp.

The Company, and all of its subsidiaries, including EBlock Corp., have strengthened their compliance programs, internal monitoring, leadership oversight, and training, and remain committed to maintaining the trust of their customers and partners.

Forward-Looking Information

This news release may contain "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities laws. This forward-looking information in this press release includes statements regarding the Company's commitment to establish an appropriate compliance program, and continue its full cooperation with the DOJ, as well as the DOJ's commitment to dismiss the criminal charges against EBlock Corp.

This forward-looking information is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Assumptions relied upon include those relating to the future effectiveness of our compliance programs, and our ability to comply with the Deferred Prosecution Agreement.

Forward-looking information is also subject to a number of risks that may cause the actual results to be materially different from those expressed or implied by such forward-looking information, including but not limited to, risks that the Company was not aware of all relevant information at the time it entered into the Deferred Prosecution Agreement and that it will be able to comply with the Deferred Prosecution Agreement going forward.

The forward-looking information contained in this press release represents our expectations as of the date specified herein and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

About EINC

EINC's mission is to optimize the online vehicle buying, selling, and management experience for automotive dealers and consumers. EINC has a digital platform (the "EBlock Platform") that provides automotive dealerships with access to an online wholesale auction marketplace where they can purchase or sell vehicles to other dealers, as well as access innovative software solutions to support dealers' digital retailing and inventory management. Access to the EBlock Platform is complemented by ancillary service offerings to assist dealers with supplementary auction-related needs, including driving consumer traffic to their digital properties and optimizing other business processes. EINC.'s digital wholesale marketplace goes to market under the brand EBlock, and EINC's digital retail suite of products goes to market under the brand EDealer.

SOURCE E Automotive Inc.