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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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PDFWhy Can't Ecosphere Score a Deal with BP?
by Melissa Davis - 6/30/2010 8:24:50 AM
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.
That technology, known as the Ozonix Deepwater Recovery Process, seems to grow more powerful by the day. Based on a website hosted by ESPH’s investor relations firm, the company’s purification system can filter about 200,000 barrels of contaminated water per day (roughly the same as the Costner-backed machines). Over the course of the past two weeks, however, that number has climbed higher and higher.
During a June 9 press conference hosted by ESPH’s three big-name stars -- world-renowned environmentalist Jean-Michel Cousteau and former pro quarterbacks Drew Bledsoe and Troy Aikman – the company claimed that its machines could actually clean 500,000 gallons of water a day. Five days later, when appearing on Fox News,Ecosphere Chairman and Cousteau sidekick Charles Vinick pegged that number above 1 million gallons instead. Less than a week later, during an interview on the same network, Aikman offered a far higher figure still.
“We believe that we have the technology – and, more importantly, the equipment – to be able to handle 21 million gallons a day,” Aikman stated on the air. “And that’s something that no one else can claim.”
(During a recent interview with TheStreetSweeper, Vinick helped clarify those numbers somewhat by explaining that ESPH has 20 units available that can process about 1.2 million gallons of water apiece.)
The fact remains, however, that ESPH has never actually tried to clean up an offshore oil spill. Until BP’s Deepwater Horizon oil rig exploded this April off the shores of the Gulf Coast, triggering the worst U.S. disaster of its kind, ESPH focused its attention on the natural gas shale projects that had previously dominated energy-related headlines instead.
ESPH recently completed one of those projects for none other than BP itself. That pilot project, carried out in January and February of this year, allowed ESPH to showcase its technology for BP out in the field. When BP suffered its offshore disaster two months later, however, the company – clearly familiar with Ecosphere’s machines – looked elsewhere during its frantic search for powerful remedies.
Devon Energy (NYSE: DVN), another energy giant that tried out ESPH’s technology, failed to become a repeat customer as well.
“We didn’t find the technology to be useful in the work we were doing,” Devon spokesman Chip Minty toldTheStreetSweeper last week. So “it didn’t work out.”
Even so, Vinick told TheStreetSweeper that all of the tests performed by ESPH for big energy companies – including BP – delivered “very positive” results. He also said that ESPH’s recent discussions with BP about a deal in the Gulf Coast have been “going well.”
Still, ESPH insiders have been sending mixed signals to the market about its chances for a big contract. Notably, during the midst of ESPH’s busy media blitz this month, two company executives cashed out cheap stock options that could have theoretically grown more valuable over time.
When speaking with TheStreetSweeper on Thursday, Vinick speculated that the insiders had sold stock to satisfy “tax issues” while insisting that nobody inside the company was voluntarily “dumping” their shares. Even before those transactions, however, one of the sellers – CFO Adrian Goldfarb – had raised some eyebrows already because of histies to a stock-promotion firm owned by a past target of securities regulators.
With its celebrity backers touting ESPH’s technology in numerous television interviews, the company’s stock has actually gained some ground since Goldfarb sold his shares. ESPH currently fetches $1.49 a share, giving the company a market value of nearly $200 million despite its modest revenues and escalating losses.
Expert Opinions
As an early ESPH client, Devon actually tested the company’s technology for use in ESPH’s core business of water treatment for the natural gas industry. If BP places an order, however, the company will be utilizing the machines for a brand-new purpose – illustrated in a crude drawing rushed out by ESPH this month – that has never been proven to work.
“It’s no different than what we’ve been doing,” Vinick told TheStreetSweeper on Thursday. “We have used it with pure crude and with sludge … We are very confident in the process.”
To skeptics, however, ESPH’s oil-cleanup technology looks like nothing more than a glorified water-purification system like those used in saltwater aquariums. Although such systems can effectively remove dirt and minerals from water, skeptics say, they tend to clog up when encountering even small amounts of oil.
Mickey Thompson, who spent 15 years as president of the Oklahoma Independent Petroleum Association, has voiced similar concerns. He, too, says that “relatively minute” quantities of hydrocarbons can “screw up” water-purification systems. He also questions whether ESPH’s own system, originally designed for natural gas projects, can actually address BP’s big mess out in the Gulf Coast.
“I have no idea whether their new ‘patented’ process can, in fact, lift oil and chemical dispersant off the ocean floor,” Thompson stated in a recent email to TheStreetSweeper. But “what they are suggesting they can do in the gulf is really only marginally related to the services they have tried to sell in the gas shale plays.”
Meanwhile, ESPH has invested little money in research and development despite its ambitious plans. Last quarter, for example, the company spent less than $27,000 on its R&D efforts. Based on regulatory filings, BP itself – a longtime sponsor of environmental research – spends that much on R&D every three minutes instead.
Nevertheless, ESPH has been confidently promoting its technology as the answer to BP’s problems. On June 1, for example, ESPH announced that Cousteau – “a world-renowned environmentalist and ocean explorer” – had officially endorsed the company’s Ozonix system for use in the Gulf Coast. While the news essentially portrayed Cousteau as an independent expert won over by ESPH’s new technology, however, the big-name environmentalist was actuallyconnected to the company – which started out as a paint-stripping outfit – long before it invented its current device.
Cousteau joined the board at ESPH, when it was still known as Ultrastrip, about a decade ago. By 2001, regulatory filings show, Cousteau had inked a potentially lucrative deal in exchange for his services. He not only collected 200,000 shares of Ultrastrip stock, those filings reveal, but he also convinced the company to give the Oceans Future Society – a non-profit organization that he founded – 2% of its annual revenues.
By then, media reports indicate, Cousteau had already come under fire for allegedly exploiting the family name for commercial purposes. In 1995, The New York Times reported, Cousteau’s own father – the world-famous explorer Jacques Cousteau – sued him after he lent his last name to a South Pacific beach resort.
“I was given this name,” the younger Cousteau declared in the newspaper article. “And I am convinced that I have the right to call myself Cousteau.”
As previously noted, Cousteau is now using his name to aggressively promote ESPH’s business ventures. He has touted the company’s water-cleaning device in at least three different interviews, hosted by major television networks, over the course of the past few weeks alone.
During his recent conversation with TheStreetSweeper, ESPH’s chairman emphasized that Cousteau received no direct payments for that publicity but admitted that both Cousteau and his non-profit firm own stock in the company.
Hail Mary?
Like Cousteau, Bledsoe and Aikman have a financial interest in ESPH as well.
Bledsoe formed a new investment firm, known as Bledsoe Capital Group, shortly after his 2007 retirement from football and soon began hunting for attractive business opportunities. The firm settled on ESPH in the spring of 2008, Spiritmagazine (a monthly publication generated by Southwestern Airlines) reported, after the company convinced Devon to try out its technology.
“Part of what gets my blood pumping is the fact that I could fail miserably,” Bledsoe admitted to Spirit at the time. “But it’s exciting to try to be successful at something because of what I can do with my wits as opposed to what I can do with my arm.”
Originally, past news releases show, Bledsoe Capital planned to buy half of Ecosphere Energy Solutions (the main operating subsidiary of ESPH) for $50 million following the successful completion of a “90-day pilot program with a major energy company in the Barnett Shale.” (That company, while unnamed in the press release, appears to be Devon.) Specifically, Bledsoe pledged $10 million upon closing of the EES acquisition with the option to supply the rest after the big pilot project came to an end.
Devon now says that it used ESPH’s technology for less than three months, however, and soon determined that it “wasn’t a good fit” for the company.
Last July, more than a year after ESPH first announced Bledsoe’s plans, the company revealed that it had secured only $10 million from the investment firm instead. At the time, ESPH was struggling with a weak stock price – of less than 50 cents a share – that showed no real signs of climbing higher.
“Bledsoe Capital continued to believe in us and stayed the course during some very rough times in the capital markets,” ESPH stated with obvious gratitude. “We are pleased to have them now as our partners.”
Even that big cash fusion from a celebrity investor failed to lift ESPH’s stock, however. The shares continued to lose ground instead, hitting their current 52-week low of 31 cents about a month after the Bledsoe deal finally closed.
ESPH never topped the $1 mark until this spring, in fact, when the company began capitalizing on public interest in natural gas shale plays and the environmental hazards they present. ESPH hit the jackpot in late March, when The Wall Street Journal highlighted the company – along with Bledsoe’s gamble on it – in a favorable article about water-cleaning technologies for the natural gas industry.
That day, ESPH hit an all-time high of $1.88 on record volume of 6.22 million shares. The stock soon reversed course, however, ultimately tumbling well below $1 – on soaring volume – the day after ESPH’s CFO formally adopted a trading plan that would allow him to start selling his stock.
Checkered Past
By the time Goldfarb officially took over as CFO of ESPH in 2008, he had already established an intimate business relationship with the company.
The previous year, ESPH gave Wall Street Resources – a firm connected to Goldfarb – 200,000 shares of stock and $15,000 in cash to provide “investor relations” services for the company. (ESPH continues to pay $8,000 a month for those services.) Wall Street Resources operates a related company, known simply as WSR Consulting, that Goldfarb co-founded with a partner who has a checkered regulatory past.
Gerald Kieft had already come under fire by industry watchdogs before he helped Goldfarb launch that company. While working for Makefield Securities in Stuart, Fla. – ESPH’s home base – Kieft allegedly issued bullish stock reports that misled public investors. The Financial Industry Regulatory Authority (FINRA) cracked down on Kieft in 2004, claiming that he had created a website that distributed research reports that contained “exaggerated and unbalanced statements” and that he had personally generated at least one such report himself.
Kieft was temporarily banned from the industry and ordered to pay a $10,000 fine before he could begin working for a registered financial firm again. According to FINRA records, Kieft never registered with the agency after that time.
As a founder of both Wall Street Resources and WSR Consulting, however, Kieft has remained quite busy. As Kieft’s recent partner, Goldfarb has capitalized on multiple “business opportunities” as well. (Goldfarb also owns yet another firm, known as G3Pra, that has made high-interest loans to ESPH.)
In fact, Internet records show, Goldfarb still doubles as the CFO of both ESPH and GelStat (OTC: GSAC.PK) – another WSR client – to this day. Through WSR, Goldfarb began providing services to GSAC in April of 2008 and officially became the company’s CFO a few months later. Kieft joined him as CEO of GSAC, a position he apparently still holds, at that time.
“We want to send a signal to the financial community that we believe in the future of GelStat,” Goldfarb stated when WSR first began providing consulting services to the company. “To make that message loud and clear, we have agreed to 100% equity compensation.”
Thus, he added, “our incentive is clearly aligned with GelStat’s investors to build long-term shareholder value.”
That strategy has so far failed to pay off, however. Two years later, GSAC still trades on the lowly Pink Sheets for less than a nickel a share.
Mixed Reviews
In comparison, ESPH looks like a real homerun. Still, Wall Street Resources spent years promoting the stock – with relatively meager results – before the shares finally took off.
In a bullish report last fall, for example, Wall Street Resources predicted that ESPH was “on the cusp of triple-digit revenue growth and/or a major liquidity event” that could provide investors with “exceedingly above-average returns.” Although the firm continued to tout ESPH through the end of last year – and ESPH did report a huge jump in revenue – the stock nevertheless continued to hover below the 50-cent mark through most of that span.
By the time that Wall Street Resources issued new recommendations on ESPH this spring, however, the stock had finally begun to rally. Kieft himself sent out an email blast on ESPH in late March, just one day before The Wall Street Journal published the favorable article that pushed the stock to record highs.
More recently, another paid promoter has started touting the shares as well. Earlier this month, MonsterStockPicks.com– which pocketed $20,000 for its services -- predicted that ESPH was “poised for a monster move” after filing a new patent application for technology aimed at assisting BP with cleanup efforts in the Gulf Coast.
Since then, ESPH has gone on to suggest that it could land a BP contract any day. As time keeps passing without a deal, however, investors have begun to ask some difficult questions.
With a respected environmentalist serving as an advisor and a former director of the Federal Emergency Management Association (FEMA) sitting on its board, they wonder, why can’t ESPH seal the deal? Since BP has already used ESPH’s technology in the past, they add, why wouldn’t the company order some machines if it believed they might actually work? Meanwhile, they continue, why haven’t other big ESPH customers offered public endorsements that could help the company’s case?
Since retiring as president of the OIPA in 2005, Thompson has remained an active player in the Oklahoma energy scene. Although ESPH counts Oklahoma among the handful of states where it has conducted water-treatment projects, however, Thompson had never even heard of the company before TheStreetSweeper approached him with questions for this story.
“I’ve asked one of my partners, who runs our company in the field, if he knows whether any of the pilot projects that have been tried in southeastern Oklahoma … have met with any success,” Thompson stated in his recent email. “I assume the answer to that is ‘no.’
“Otherwise,” he concluded, “you would see some incredible testimonials on the Ecosphere website – right?”
* To contact Melissa 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...LIqiudmetal: Keeping Mum about Apple and Far More
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.
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...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...
