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- Barron's: Insider Selling Accelerates at Northern Oil & Gas
- Benzinga: Will Growth Spurt Last for Northern Oil & Gas?
- Benzinga: More Trouble for Northern Oil and Gas
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PDFLIqiudmetal: Keeping Mum about Apple and Far More
by Melissa Davis - 8/24/2010 11:09:15 AM
This year, Liquidmetal Technologies (OTC: LQMT.PK) has kept some telling – and arguably material – secrets from its investors.
Take LQMT’s recent deal with Apple (Nasdaq: AAPL) as an obvious example. In a cryptic 8-K filing on Aug. 9, LQMT suddenly announced a contract with Apple that – on the surface – seemed to warrant a full-blown press release. Specifically, LQMT revealed that it had signed a “master transaction agreement” that would allow Apple to commercialize its technology for future use in its consumer electronics products.
LQMT never disclosed the terms of that licensing contract, however, allowing hopeful speculation to fuel the company’s shares instead. LQMT’s stock, which fetched just 13 cents a share a month ago, rocketed to a multiyear high of $1.76 last week before swiftly crashing on the lack of details associated with that high-profile deal. The stock, down another 10.6% on Wednesday, has now lost most of its Apple-related gains and currently trades for just 76 cents a share.
This spring, in the months leading up to that dramatic deal, LQMT kept quiet about another important development as well. In an even shorter 8-K filing on March 8, LQMT quietly disclosed that longtime Chairman John Kang had left the company without giving any reason for his departure. One week earlier, Kang was convicted at trial on fraud charges – carrying a potential five-year prison sentence – for inflating the financial results of another company he had previously led.
A federal judge has since overturned that conviction on a technicality, the St. Petersburg Times noted, ruling that the statute of limitations had already expired on the fraud case. Still, Internet records indicate, LQMT never revealed that its recent chairman – who spent more than 15 years with the company – had ever been tried or convicted at all.
LQMT is no stranger to government heat itself. The company became the target of a criminal investigation, with prosecutors scrutinizing its accounting practices and insider sales, several years ago. The company’s stock, once a Nasdaq highflier commanding $20 a share, had already fallen below $2 on the OTC Bulletin Board by that time.
The shares bottomed out at 8 cents in late April, when LQMT failed to file a past-due annual report that would have detailed the company’s current financial condition, and remained under pressure until news surfaced about the celebrated Apple deal.
Apple did not return a phone call seeking comments for this story. LQMT received a list of questions covering multiple issues – including the Apple deal, the company’s former chairman, its major stockholders and its current share count – but failed to supply any information about those matters.
“Questions regarding Apple we cannot answer, given their policy regarding new business ventures and relationships and the dissemination of information,” LQMT stated in a brief email reply. “The remainder of the financial questions will have to be addressed after we file our 10Q later this month.”
Toxic Waste
According to its last 10Q, LQMT clearly needed some funds.
In that Nov. 23 report, LQMT revealed that it had spent the past three years losing money and lacked the financing necessary to continue operations beyond the 2009 fiscal year. By then, LQMT had already fielded a formal default notice from one of its creditors and faced liens placed on its assets by others. The company had issued loads of convertible stock – with conversion prices ranging from just 10 cents to 22 cents a share – to satisfy its obligations in the meantime.
On May 28, LQMT followed up by inking a new $2 million loan agreement with an outfit called Norden that would deliver sizable short-term gains to the firm. Under the terms of that deal, Norden could begin purchasing up to 7.7 million shares of LQMT stock at 26 cents a share on the day the company satisfied that loan. LQMT paid the loan off in full on Aug. 5, the same day it inked the Apple deal, and Norden promptly exercised its right to purchase all of those cheap shares.
LQMT rocketed 72.5% to 88 cents – on massive volume of 8.24 million shares – that same day. The stock would continue to surge past $1.70 a share, with another 45 million shares changing hands, over the course of the next two days. It then collapsed with similar force, losing more than half of its newfound value, during the next two trading sessions.
History of Failure
LQMT fell even harder as a young Nasdaq company about eight years ago.
In May of 2002, with Kang serving as its CEO, LQMT went public at $15 a share. The stock rocketed to $22.50 a share the following month, the Tampa Tribune reported, but soon began losing serious ground after that time. By August of 2002, the newspaper observed, LQMT had cooled off completely and tumbled to just $4 a share.
A year later, the St. Petersburg Times reported, the only analyst following LQMT had lost his faith in the company – citing its inability to capitalize on a promising cell phone deal with Motorola (NYSE: MOT) – and slapped the equivalent of a “sell” rating on the shares.
“Liquidmetal recently disclosed that a potential application it was working on for Motorola, a casing for a cellular phone, had been delayed indefinitely,” MarketWatch explained when covering the downgrade. “For another application, Liquidmetal said it was unable to meet Motorola’s price point … The companies have worked together for more than a year, but this interest has yet to result in an order.”
Last week, with LQMT soaring high on news of the Apple contract, industry experts began hinting about similar challenges. Since LQMT failed to provide any details about that deal – including its price tag and its potential for future revenue – experts questioned whether Apple had simply paid a modest fee for access to expensive technology that it may never use at all.
“Apple isn’t saying anything about the deal,” the Associated Press observed. “And it’s far from certain that the material (invented by LQMT) will ever make it into its products. Though it matches the sleek Apple aesthetic, it’s prohibitively expensive” as well.
Patriot Scientific (OTC: PTSC.OB), another microcap technology company, failed to flourish even after multiple electronics giants – including Intel (Nasdaq: INTC), Advanced Micro Devices (NYSE: AMD) and Hewlett-Packard (NYSE: HPQ) – reportedly paid the company millions of dollars in licensing fees. Although PTSC originally soared on news of those deals back in 2006, rocketing from mere pennies toward $2 a share, the stock has lost all of those gains since that time. That once-hot penny stock, still briskly traded to this day, currently fetches just 13 cents a share.
Government Target
Years ago, LQMT followed a similarly disturbing pattern.
LQMT spent less than two months as a young stock market darling, past news reports show, before suddenly reversing course and losing most of its original market value. By 2004, LQMT faced class-action lawsuits for allegedly misleading investors and looming restatements that would soon banish the company’s stock to the lowly Pink Sheets.
LQMT’s independent auditing firm resigned in the meantime, saying that it was “unwilling to rely” on information supplied by Kang when examining the company’s books. Kang temporarily stepped down as CEO a few weeks later,the St. Petersburg Times reported, after becoming the target of an investigation focused on his past stock sales.
His replacement, Ricardo Salas, lasted less than a year before coming under government scrutiny as well.
“Ricardo Salas, our previous president and CEO, has decided to resign from his position in the company,” Kang stated in an October 2006 conference call focused on the management shakeup. “This was unfortunate, but was due to the fact that he was recently named as one of the parties in the Department of Justice investigation.”
“Because he was named as one of the parties,” Kang continued, “he cannot hold an officer position of a public company.”
Fraud Conviction
Kang continued to serve as chairman, however, even though he had surfaced as a target of that investigation as well. By then, corporate filings show, he also faced criminal charges for alleged accounting fraud at yet another company.
While serving as chairman of LQMT, those records show, Kang doubled as a senior executive at a company called Medical Manager Health Systems. Between 1996 and 2000, he filled top posts at Medical Manager – including CEO and president – before the company ultimately sold itself to WebMD. (Interestingly, an executive bio reveals, Sangas helped found Medical Manager and briefly served as a company vice president during that timeframe as well.)
According to federal prosecutors, Medical Manager allegedly engaged in accounting fraud during the entire time that Kang helped lead the company. Together with former Medical Manager COO John Sessions, Kang was convicted at trial of multiple felonies – including conspiracy to commit mail, wire and securities fraud – earlier this year.
“As the president and vice president of their company, these defendants were supposed to lead their company with honor and integrity,” government prosecutors stated when announcing the convictions this March. “Instead, they orchestrated an elaborate accounting scheme meant to defraud investors about the financial success of their company.
“Corporate executives cannot decide to play by their own set of rules. The message is simple: Obey the laws or face prosecution for your crimes.”
Sweetheart Deal
At the time that LQMT filed its latest proxy statement in mid-2009, Kang still owned 5.135 million shares – or 10% of the shares outstanding – in the company. Although Kang has reported no stock sales since that time, regulatory filings indicate, he fails to appear on an (admittedly short) Internet list of major company shareholders.
Thomas Steipp, LQMT’s brand-new CEO, now holds that title instead. Before joining LQMT earlier this month, Steipp spent more than a decade serving as the CEO of a much larger technology firm known as Symmetricom (Nasdaq: SYMM).
The company fared well under Steipp’s leadership at first, with the stock peaking in mid-2000 above $20 a share, but it later began to falter. The stock sank to around $4 by early 2003 and – with the company later restating its financials and slashing its workforce – never fully recovered from that fall. It closed Wednesday at $5.13 a share, near the low end of its 52-week range.
Steipp himself struck it rich, however. He scored more than $4.5 million worth of compensation during his last three years at Symmetricom, regulatory filings show, with almost half of that awarded for his final year on the job.
After a mere 13 months of retirement, Steipp has now reemerged as the chief of LQMT with another sweetheart deal. He collected 6 million shares of LQMT stock – and now controls 10.8% of the shares outstanding – after taking over as CEO on the same day that the company signed its contract with Apple.
The value of Steipp’s stock in LQMT soared from $1.74 million to $10.5 million during his first week at the helm. Today, that stock is still worth $4.56 million – more than double its original value – despite the recent plunge.
Massive Dilution
LQMT has treated other company insiders with generosity as well.
On July 12, just weeks before finalizing the mysterious Apple deal, LQMT granted several company leaders – including Salas (who resurfaced two years ago as executive vice president) – options to purchase more than 3 million shares of stock at just 13 cents a share. LQMT then followed up by issuing restricted stock to company directors, valued at similarly low prices, on the day that it officially signed the Apple agreement.
Ordinary LQMT investors have suffered untold dilution in the meantime. According to regulatory filings, LQMT’s share count has already jumped by more than a third to 63.8 million shares over the course of this year. According to those same filings, however, warrant and convertible stockholders could more than double – or even triple -- that share count going forward.
Meanwhile, LQMT already sought out permission to triple its authorized share count – from 100 million to 300 million – by issuing a dire warning to investors.
“If this proposal to increase our authorized shares does not pass,” LQMT cautioned last year, “we will be at risk that holders of the preferred stock and convertible notes will put us in default, charge us interest at default interest rates and possibly seize and sell our assets.”
Fuzzy Math
Without an accurate share count, LQMT investors cannot estimate the current market value of their company or determine if that valuation looks fair.
If the share count remains at 63.8 million, LQMT sports a market capitalization of roughly $48.5 million. If the share count has climbed to between 100 million and 300 million, however, then the current stock price suggests a market value of $76 million to $228 million – potentially exceeding that featured by the Nasdaq-traded company Steipp previously oversaw – instead.
For his part, Steipp sounds delighted with his lucrative post at LQMT despite the company’s checkered past. LQMT Chairman Abdi Mahamedi, a huge shareholder who replaced Kang after his conviction this spring, has expressed excitement about Steipp’s arrival as well.
“As an experienced CEO with a track record of success, Tom brings essential depth to the company’s management team at a time when our technology is seeing unprecedented commercial interest,” Mahamedi stated when introducing Steipp to investors last week. “His ability to create value through collaborative relationships, technological innovation and business process is important as the company embarks upon our next stage of growth.”
Mahamedi stands to benefit, quite handsomely, if that rosy outlook boosts the company’s share price. According to past regulatory filings, Mahamedi’s firm – which counts Kang’s brother among its investors -- controls 87.86 million shares of LQMT stock. That stake, including current stock holdings and exercisable warrants for additional shares, exceeds the last reported share count for the entire company.
* Note: No member of TheStreetSweeper's staff or advisory board has ever taken a financial position in LQMT or received any compensation from others who have positions in the stock. As editor of the site, Melissa Davis will never take a position in any of the stocks that she covers. To contact Ms. Davis, the author of this story, please send an email to editor@thestreetsweeper.org.
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Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
JAMN stands out for its powerful connections, the first loudly celebrated by the company and the second – involving a notorious stock promoter – carefully hidden from view.
more...
Powerful Warrior Joins Fight against Fraud
TheStreetSweeper is proud to formally introduce Janice Shell, one of the most experienced – and feared – investigators of penny-stock fraud in the country, as the newest member of its decorated editorial team. Shell most recently worked for StockWatch, where she focused on covering dubious microcap companies with ties to Canada: a notorious haven for shady stock promoters.
Heralded as “the unofficial queen of cybervigilantes” by Fortune magazine more than a decade ago, Shell boasts a long and impressive record of exposing fly-by-night microcap companies – and warning investors away from their stocks – well before their shares ultimately collapse. She has attracted a devoted group of followers, which includes some topnotch financial journalists, along the way.
“It wasn’t called ‘Internet sleuthing’ when Janice and a small band of colleagues at Silicon Investors invented it,” saysRoddy Boyd, a former stock-market reporter for both the New York Post and Fortune who now runs a hard-hittinginvestigative news site of his own. “Yet, starting in the ‘90s, Janice and her cyber-partners did what the SEC, the FBI and frankly the media could not or would not do: They asked questions. They dug into files, found the forgotten postings and buried press releases and, slowly but surely, began to nail one fraud and witless promotion after another.
“In a just society, Janice and her partners would get medals,” Boyd adds. “We don’t live in a just society. But thankfully, Janice has found a roost at TheStreetSweeper to deliver well-reported, crisply written justice upon the sundry sleazebags of the capital markets.”
more...LEXG: The Biggest Snow Job of the Year?
They can still be promoted and played, of course, as veterans of the shady penny-stock world well know. And companies promising to search for lithium, which powers the batteries used in new and increasingly popular electric cars, rank among the clear favorites in this risky space.
Today, LEXG stands out as the biggest star by far. The company generates no revenue, corporate filings show, and will likely need years to do so if it manages to survive that long. It had no cash on hand at the end of 2010, either, and it managed to raise a mere $250,000 through a private placement deal earlier this year. But thanks to a $3.3 millionpublicity campaign – possibly record-breaking in price – LEXG has skyrocketed from 12 cents to almost $4 a share in barely a month and now boasts a market value that’s approaching $200 million.
If history serves as any guide, however, LEXG will fail to hold onto even a fraction of those remarkable gains. A year ago, TheStreetSweeper scrutinized three similar companies in a detailed report entitled “Can the Batteries Last on Overcharged Lithium Stocks?” That question has long since been answered, alas, with all three stocks sinking from impressive highs to increasingly miserable lows.
more...HHWW: Another Hyped-Up Stock That's Dressed to Kill?
The corporate headquarters for Horiyoshi Worldwide (OTC: HHWW.OB), located within blocks of several Los Angeles homeless shelters servicing Skid Row, looks rather modest for a high-end fashion company that recently sported a market value approaching $200 million.
Earlier this month, TheStreetSweeper sent some locals to HHWW’s home office after watching the company’s stock rocket from $1 to $3 a share on a blizzard of paid promotions. They found a tiny operation, manned by a single staffer (focused on investor relations), that housed little more than two clothing racks containing about 20 T-shirts apiece.
Based on prices supplied in HHWW’s regulatory filings, those T-shirts represent an estimated $6,000 worth of inventory for the company. While meager, that figure nevertheless eclipses the $912 in total sales reported by HHWWfor the second quarter of this year.
To be fair, HHWW has yet to release third-quarter results that might reflect an uptick in sales following the company’s adoption of an aggressive growth strategy. Still, corporate filings show, HHWW actually saw its quarterly revenue plummet – sinking from $152,175 to less than $1,000 – in the months leading up to that grand plan.
Even so, stock promoters – paid huge sums to tout HHWW – have painted an incredibly rosy picture of the company. Last month, for example, Eric Dickson of Breakaway Stocks predicted that HHWW could soar more than 4,500% by the end of this year. The stock, currently trading at $1.63, must somehow find a way to reach $45.38 a share over the next few days for that wild forecast to come true
more...Regulators Turn up the Heat on Alternate Energy
Two months after TheStreetSweeper began sounding alarms about Alternate Energy (OTC: AEHI.PK), federal regulators have officially filed charges against the company and two of its officers for allegedly fleecing investors through a long-running pump-and-dump scheme.
In a formal complaint this week, issued just days after halting AEHI’s stock, the U.S. Securities and Exchange Commission flatly accused the company and two senior executives – CEO Donald Gillispie and his girlfriend Vice President Jennifer Ransom – of scamming investors while secretly enriching themselves. Since it went public four years ago, the SEC says, AEHI has raised millions of dollars by promising to build a nuclear power plant even though the company has “no realistic possibility” of ever achieving that goal. Meanwhile, the SEC says, AEHI insiders have quietly dumped big chunks of stock while publicly expressing strong confidence in the company.
“The company has made multiple misrepresentations, including claims that its executives had such confidence in AEHI that they had not sold a single share of company stock,” the SEC stated on Thursday. However, “records obtained by the SEC show that Gillispie and Ransom have instead secretly unloaded extensive stock holdings and funneled the money back to Gillispie.”
more...HHWW: Another Hyped-Up Stock That's Dressed to Kill?
The corporate headquarters for Horiyoshi Worldwide (OTC: HHWW.OB), located within blocks of several Los Angeles homeless shelters servicing Skid Row, looks rather modest for a high-end fashion company that recently sported a market value approaching $200 million.
Earlier this month, TheStreetSweeper sent some locals to HHWW’s home office after watching the company’s stock rocket from $1 to $3 a share on a blizzard of paid promotions. They found a tiny operation, manned by a single staffer (focused on investor relations), that housed little more than two clothing racks containing about 20 T-shirts apiece.
Based on prices supplied in HHWW’s regulatory filings, those T-shirts represent an estimated $6,000 worth of inventory for the company. While meager, that figure nevertheless eclipses the $912 in total sales reported by HHWWfor the second quarter of this year.
To be fair, HHWW has yet to release third-quarter results that might reflect an uptick in sales following the company’s adoption of an aggressive growth strategy. Still, corporate filings show, HHWW actually saw its quarterly revenue plummet – sinking from $152,175 to less than $1,000 – in the months leading up to that grand plan.
Even so, stock promoters – paid huge sums to tout HHWW – have painted an incredibly rosy picture of the company. Last month, for example, Eric Dickson of Breakaway Stocks predicted that HHWW could soar more than 4,500% by the end of this year. The stock, currently trading at $1.63, must somehow find a way to reach $45.38 a share over the next few days for that wild forecast to come true.
more...Regulators Pull the Plug on Alternate Energy
Four years after Alternate Energy (OTC: AEHI.PK) went public, courting investors with grand plans to build a multibillion-dollar nuclear power plant, the U.S. Securities and Exchange Commission has finally suspended trading in the controversial penny stock.
This week, the SEC halted AEHI due to questions about “the accuracy and adequacy of publicly disseminated information” about the company. When cracking down on AEHI, the SEC cited concerns about several issues – including company finances, executive compensation and insider sales – examined by TheStreetSweeper in its recent coverage of the company. (Click on these three links to access those stories and the backup documents used to prepare them.)
AEHI critics, who have been sounding alarms about the company for years, expressed clear relief at the long-awaited news.
“It was a scam from the beginning,” declared Joe Weatherby, a former planning and zoning commissioner in AEHI’s home base of Idaho. “This has been a long time in coming.
“I didn’t think it was ever going to happen,” he added. “So it was a great Christmas present.”
more...Alternate Energy: Another Radioactive Stock Pick?
Alternate Energy (OTC: AEHI.PK) investors might want to take a closer look at some of the outfits that have embraced the company’s stock.
Just last month, two different firms – both known for risky microcap picks -- rushed to defend AEHI with bullishrecommendations after TheStreetSweeper raised legitimate concerns about the company. The first one, Pinnacle Digest, owns AEHI’s stock and admitted in a disclaimer that it plans to “sell every share” for its own profit without advance notice to its followers. The second one, WallStreetCorner.com, regularly collects cash and/or stock from the companies it endorses and has directed investors into some notorious losers along the way.
Years ago, for example, WallStreetCorner’s Larry Oakley touted a company known as Accident Prevention Plus that served as the vehicle for an illegal pump-and-dump scheme. The so-called “mastermind” behind that scam wound up sentenced to 10 years in prison last month – just three days before Oakley issued his ringing endorsement of AEHI – as punishment for his crimes.
Oakley has embraced other ill-fated stocks, such as eMax Holdings (OTC: EMXC.PK) and Hathaway Corporation, as well. In certain ways, AEHI now resembles both of those doomed companies.
more...AEHI: The Story, the Holes and the Secrets They Hide
Alternate Energy (OTC: AEHI.PK) has spent the past four years selling investors an incredible – if incomplete – story.
The basic plotline goes something like this: AEHI will somehow secure the funding and approval necessary to build a multibillion-dollar nuclear power plant in Idaho that’s virtually guaranteed to deliver eye-popping profits for investors. That version of the story contains some gaping holes, however, filled with pesky secrets that threaten to ruin this fairy-tale ending.
Take the first chapter in this ongoing saga, just for starters. Initially, AEHI CEO Donald Gillispie said the company would build its nuclear power plant in Owyhee County – touting a deal inked with “prominent Idaho landowner and businessman” James Hilliard -- and spent the next year portraying that site as a suitable location for such a project. In the spring of 2008, however, AEHI suddenly announced that it had abandoned that site due to troubling fault lines and shifted the project to nearby Elmore County instead.
In a sworn deposition that surfaced last month, however, Gillispie offered far different reasons for that abrupt change of plans.
“There were two things going on,” he states in that document. “First of all, we had not received funding because we lost our silent partner there … The other thing going on was that Hilliard would not – he had been extending the contract whenever it came up, like a six-month contract – and in early ’08, he didn’t extend it.”
more...Alternate Energy: Power Stock or Toxic Waste?
Four years ago, Alternate Energy (OTC: AEHI.PK) CEO Donald Gillispie arrived in one of the poorest counties in Idaho and began selling company stock to local investors impressed by his grand plans.
Although AEHI had spent just $1,000 on research and development during the previous two years, regulatory filings show, the company boasted all sorts of remarkable inventions. AEHI claimed that it had developed a breakthrough fuel additive that could slash the costs of natural gas-powered electricity, for example, and that it was also creating mini reactors that would “revolutionize nuclear power in an urban setting.” Even better, the company said that it was poised to become “the first company to harness the natural energy delivered in a bolt of lightning” – a goal later portrayed as “hopeless” by a national lightning expert interviewed by The New York Times.
While ambitious, however, those projects ranked as mere side shows for the young public company. If possible, AEHI had even bigger plans. Despite its minimal resources, skeptics say, AEHI promised to build a multibillion-dollar nuclear power plant – the first project of its kind for decades -- in a rural Idaho desert that lacked the vast water supply and available transmission lines normally required to make such projects work.
“They have no money; they have no plans,” a county commissioner told the local Owyhee Avalanche newspaper at the time. “Most (locals) think that it’s … a daydream or a fairy tale.”
Since then, records show, AEHI has announced funding deals with at least three obscure financial firms – including one whose leader would later be charged with alleged securities fraud – but still lacks the money required for even the equivalent of a down payment on a nuclear power plant. AEHI also keeps changing the planned location for its proposed plant, local news coverage reveals, currently settling on an Idaho county already ruled out by Warren Buffett’s MidAmerican Nuclear Energy because it made no economic sense.
Nevertheless, AEHI has still managed to sell its own investors on the massive project. The company’s volatile stock, which once fetched mere pennies, currently trades for 87 cents a share. With a share count of 320 million, up from about 40 million a few years ago, AEHI now boasts a market value of $280 million.
more...RMCP: The Tiny Syringe Maker Stings Investors Again
Less than four years after changing its name in an effort to put its checkered past behind it, Revolutions Medical (OTC:RMCP.OB) is suspected of engaging in the same sort of stock-boosting activities that led regulators to crack down on the company in the first place.
Ever since RMCP filed the paperwork last month to clear the way for massive sales of its stock, the company has been issuing a flurry of press releases containing increasingly upbeat news. RMCP kicked things off with a couple of announcements about its MRI technology in mid-August, which proved effective enough to push the company’s stockfrom 28 cents to 40 cents a share. When RMCP shifted its attention to the company’s new “safety syringes,” however, the stock really started to fly. By Sept. 13 – less than a month after RMCP began churning out its steady stream of good news – the briskly trading stock had soared to an all-time high of $1.74 a share.
Three announcements, issued over a one-week span this month, fueled most of that surge.
The first two celebrated a manufacturing deal, calling for the production of 5 million safety syringes, inked with an obscure firm led by an apparent insider of the company itself. (As noted in more detail below, that firm does not seem to exist.) The third, even more powerful, announcement hinted at a looming syringe order from none other than the federal government.
more...Clicker 'Body-Slammed' after Tout by Pro Wrestler
Shawn Ambrosino may have retired from professional wrestling, but as a penny stock promoter – touting the likes of Clicker (OTC: CLKZ.OB), Clenergen (OTC: CRGE.OB) and Enhance Skin Products (OTC: EHSK.OB) – he can still inflict an awful lot of pain.
This month, Ambrosino delivered his latest knockout blow with a powerful recommendation of CLKZ that has since left investors reeling. With CLKZ sitting at $1 a share, Ambrosino urged investors to buy the stock before it surged past $20 as the company – a cash-poor outfit with just a handful of employees – conquered Craigslist to become the new heavyweight leader of the online classified advertising world. CLKZ did march higher on that paid tout, ultimately reaching $1.37 a share on Wednesday, but never approached even Ambrosino’s $5 short-term target before staging a remarkable collapse.
The stock, hammered by a sudden selling spree that began the same day it peaked, now fetches just 53 cents a share. Even at that lower price, however, CLKZ still boasts a market value of $31.2 million that looks rather lofty for a company that – just six weeks ago – cautioned that it lacked the funds necessary to finance its operations for more than 30 days.
more...Tradeshow, Skymark Kicked off the Stage
Canadian regulators aren’t buying the story that Tradeshow Marketing (OTC: TSHO.PK) and Skymark Research – a paid promoter led by the son of TSHO’s founder – tried so hard to sell.
The Alberta Securities Commission has issued a cease-trading order for TSHO’s stock, while banning Skymark from trading or recommending any securities, after uncovering tell-tale signs of a classic pump-and-dump scheme. When explaining its move on Monday, the ASC cited concerns originally raised by TheStreetSweeper in a detailed investigative report almost six months ago. (Click here for the original story, complete with links to backup documents.)
Specifically, the ASC claimed that TSHO had soared on bullish Skymark forecasts secretly generated by relatives connected to the company. The ASC also noted that John Kirk, the sole director of Skymark and the son of TSHO’s founder, “held a significant number of shares” in the company – as did TSHO founder Bruce Kirk himself – at the time of the stock-boosting promotions. It pointed out that Ben Kirk, another son of the founder, worked for Skymark during the publicity campaign as well.
more...Ecosphere: A Clean Energy Company with a Dirty CEO?
Either Ecosphere Technology (OTC: ESPH.OB) CEO Dennis E. McGuire simply shares a lot in common with a twice-convicted drug felon – a coincidence of remarkable proportions – or he is the former jailbird himself.
Based on public records and news stories gathered by TheStreetSweeper, supplemented with a 63-page personal background report, the CEO and the ex-con look very much the same. The names and birth dates match. The names of multiple relatives come up as matches, too. Other key identifying traits – including addresses, business ties and even partial social security numbers – correspond as well.
McGuire’s original corporate bio, published in regulatory filings, hints at further parallels. That bio begins when McGuire graduated from community college in 1974 and, following a long and unexplained hole, picks up in detail when he invented his first cleaning technology (armed with a mere associate’s degree) more than 15 years later. The mysterious gap in between corresponds with the very period when the convicted McGuire operated a drug business, news reports show, and twice served time in jail.
more...Why Can't Ecosphere Score a Deal with BP?
Maybe Ecosphere Technologies (OTC: ESPH.OB) should have added Kevin Costner, the celebrity backer of a competing water-treatment device, to its star-studded team.
Despite ringing endorsements from its own superstars – including a big-name environmentalist and two retired professional athletes – ESPH has so far failed to secure an order from BP (NYSE: BP) for machines that, it says, can effectively address the company’s massive oil spill. Costner’s company, Ocean Therapy Solutions, fielded an order from BP for 32 of its machines almost two full weeks ago. ESPH is still waiting on an order, however, even though the company claims that it offers a superior device.
more...Junior Mining Companies and the 'Temple of Doom'
Ever since AmeriLithium (OTC: AMEL.OB) purchased some mining assets from GeoXplor -- a Vancouver outfit led by the so-called “Indiana Jones” of the lithium trade -- the company has taken investors on a wild and, at times, thrilling ride. If history repeats itself, however, AMEL investors better not count on a happy ending to their journey.
After all, GeoXplor has sold mineral claims to several other microcap companies that met with rather ugly fates. Even worse, government records show, GeoXplor founder Clive Ashworth has been previously banned from the securities industry for an alleged scam – which resulted in criminal convictions for two stock promoters – involving yet another resource company.
Nevertheless, Ashworth continues to win over junior mining companies and those who promote their risky stocks alike
more...Putting Together the Puzzle at Big Bear Mining
If Big Bear Mining (OTC: BGBR.OB) would risk hiring a bankrupt CEO with a checkered past to serve as the “public face” of the company – and essentially give him $30 million worth of stock for the favor – then investors might want to search for even darker secrets that the junior gold miner is still trying to keep.
They could start by examining BGBR’s original address. That address, listed in past BGBR regulatory filings as 1728 Yew St. in Vancouver, shows up in filings for several other penny stock outfits as well. Those companies share at least one glaring trait: They count Shane Whittle, a busy Vancouver stock promoter, among their top executives.
Armed with credible outside leads about Whittle’s connection to BGBR, TheStreetSweeper decided to call him and politely ask about his ties to the company. Whittle’s response came across as nothing short of violent.
He immediately claimed “no involvement” with BGBR and then warned of possible legal action for the “harassing” phone call. Specifically asked if he was making a threat, he replied with this: “Yeah, 100% … Take your phone call and shove it up your ass.”
more...Fearing Risks, Big Bear Promoter Tells Investors to Flee
Big Bear Mining (OTC: BGBR.OB) has scared off one of its most powerful fans.
James DiGeorgia, editor of the Gold and Energy Advisor newsletter, this week suddenly reversed his “strong buy” recommendation on BGBR and started urging his followers to sell the stock instead. His abrupt about-face came just one day after The Street Sweeper raised serious questions about BGBR’s true value and the paid promoters – including DiGeorgia himself – who have been touting the heavily traded stock.
“Based on new information I received in the last 24 hours that I was not presented with when I initially reviewed and recommended the stock, I believe it would be in the best interest of any investors holding shares in this company to sell them,” DiGeorgia stated in an official press release on Tuesday. “It doesn’t matter if you’ve made money or lost money holding BGBR.OB. Everyone who has based their purchase of shares on my recommendation should sell their shares.”
more...With China Tel, Has Tobin Smith Been 'Outfoxed' Again?
Tobin Smith, co-star of Fox News Channel’s popular “Bulls & Bears” investment show, recently declared a challenging new “mission in life.” In an upbeat message to his 2,700-plus followers on Twitter last week, Smith promised to helpChina Tel Group (OTC: CHTL.OB) – a penny stock company he has been touting for months – secure the financing it needs in order to survive.
To be sure, CHTL could use some assistance. More than a year ago, CHTL agreed to pay $195 million for a 49% stake in Chinacomm – an Asian broadband wireless company that ranks as its primary asset – but it still lacks the money required to actually pay for that deal. Although CHTL has inked plenty of financing agreements in the meantime, most recently with two mysterious firms known as Excel Era and the Isaac Organization, the company never seems to collect promised cash from those backers in the end.
more...Does the NanoLogix Rally Make Any Sense?
The NanoLogix (OTC: NNLX.PK) stock chart featured on a YouTube video – set to the catchy “Money Song” tune from Monty Python – looks rather outdated following this spring’s incredible, if inexplicable, spike in the company’s share price.
When that video first surfaced in the fall of 2007, NNLX was still focused on increasing hydrogen production with the help of grape juice while allowing Nutra Pharma (OTC: NPHC.OB) – the company’s former partner – to pursuebreakthroughs in its current business of diagnostic technology. (NPHC’s own volatile rally, staged late last year, has already come to an end.) Back then, NNLX’s stock had almost doubled in a month but still fetched only 15 cents a share. Since moving into the medical arena and converting a barn-like structure into a “clean room” for producing diagnostic testing kits (with the construction project captured in yet another YouTube video), however, NNLX has seen its stock rocket more than 200% in recent weeks to pass $1 a share.
Even Bret Barnhizer – NanoLogix’s own CEO – cannot explain that move.
more...Has Atlantic Wind and Solar Been Fueled by Hot Air?
Atlantic Wind and Solar (OTC: AWSL.PK) is suspected of blowing a lot of hot air in an effort to inflate the company’s stock price.
A year ago, AWSL supposedly acquired a 47.5% stake in Hybridyne Power Systems – later touting Hybridyne’s “best-in-class” technology and its access to an expansive research team – for $2 million worth of its own stock. After publicizing a string of stock-boosting projects secured by Hybridyne, however, AWSL suddenly announced this month that it had canceled its acquisition of the company due to an “unfortunate default by the vendor” that rendered the transaction “null and void.”
Notably, Hybridyne itself now claims that the acquisition never took place at all.
more...Can the Batteries Last on Overcharged Lithium Stocks?
Lithium Corporation (OTC: LTUM.OB) sure looks a whole lot prettier in paid tout sheets than it does in its regulatory filings.
In recent months, stock promoters have treated LTUM – a company with no revenue and just $855 in the bank – like a surefire winner that’s poised to supply giant automakers with the lithium they will need to power tomorrow’s battery-operated cars. The promoters offer similar reasons for their incredible confidence, led by soaring demand for lithium and LTUM’s ready access to lithium mines, while carefully excluding their compensation for touting the stock from its list of key attractions.
To some, however, even LTUM’s most “legitimate” selling points look suspect. They point to a recent article in The New York Times, entitled “The Lithium Chase,” as evidence.
more...Is IMGG's CEO Pulling the Plug on His Company?
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To some, Imaging3 (OTC: IMGG.OB) CEO Dean Janes appears to be giving up on his own company.
On Feb. 11, exactly one month after IMGG announced the latest in a series of regulatory setbacks, Janes reportedly began pitching a new investment opportunity to his 1,000-plus “friends” on Facebook. In his biggest insider transaction on record, Janes then sold 2.6 million shares of IMGG stock the very next day. more...
Tradeshow Marketing Knows How to Sell Its Stock
Give Tradeshow Marketing (OTC: TSHO.PK) some credit. For a company riddled with so many ugly conflicts, TSHO sure knows how to put on a pretty face for investors.
TSHO can thank SkyMark Research – a promotional firm operated by the apparent son of TSHO’s own founder – for reshaping its public image. For years, TSHO looked like a failed business with limited appeal to even speculative investors willing to place bets on high-risk penny stocks. After SkyMark launched favorable coverage of TSHO late last year, however, the company saw interest in its long-overlooked stock suddenly skyrocket. more...
AENY: Look What's Hiding beneath that Former Shell
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Americas Energy Company (AENY.OB) exposed some ugly flaws when it emerged from its corporate shell.
Following its heavily hyped reverse merger, AENY now counts CEO Christopher Headrick – a longtime dealmaker with a history of failure – as its sole officer, director and member of its staff. Although AENY has announced plans to expand its senior management team, the company aims to do so by hiring leaders who have benefited handsomely from a series of generous related-party deals. One of those potential executives, already identified as a company vice president in the past, has agreed to plead guilty to felony tax evasion charges and could face up to five years in prison for his crime. more...
IMGG Fails to Paint a Pretty Picture for Investors
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The picture at Imaging3 (IMGG.OB) just got a whole lot uglier.
IMGG dropped a bombshell on investors this week, when it revealed a major setback in its lengthy battle to secure regulatory approval of its Dominion 3-D scanning device. For months, IMGG has indicated that the company simply needed to resolve one minor issue – involving the Dominion’s label – in order to satisfy reviewers at the U.S. Food and Drug Administration. During a conference call with shareholders on Tuesday, however, IMGG reported that it has now fielded more than a dozen questions from FDA staffers who are evaluating the company’s device. more...
PennyStockChaser Hides Profits, Secrets from Investors
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This June, shortly after PennyStockChaser announced that it had become the most popular website for “hot penny stock tips” in the business, the Internet-based tout sheet began dropping a familiar name that once carried considerable weight on Wall Street.
It listed Mike Schonberg – a name formerly attached to such legendary investment firms as Dreyfus and UBS – as its official contact person. Keeping with its secretive nature, however, the website stopped well short of offering any details about Schonberg’s professional background. more...
Convicted Swindler Touts Risky Penny Stocks
Rich Roon had already served time in prison for swindling investors when he decided to reenter the securities business as a penny stock promoter.
In 2003, just 16 months after his release from jail, Roon quietly established a consulting business that targets obscure microcap companies desperate for publicity. Roon’s firm, known as Oceanic Consulting, aggressively promotes penny stocks on its OTC Reporter website in exchange for shares of the companies being touted. Over the years, Oceanic Consulting has collected – and promptly sold – billions of free shares of penny stocks that have lost money for average investors. more...
