New Article Alert!
Sign up to get notified of new articles.
click here.
| More
        Share     

Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?

by Janice Shell - 6/2/2011 10:30:25 AM

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.

For starters, as the company well knows, JAMN comes complete with a very seductive story. JAMN counts Rohan Marley – one of seven children fathered by iconic Jamaican musician Bob Marley – as both current chairman and original cofounder of the company. Thanks to Marley’s son, JAMN has found itself with an attention-grabbing asset.

Through a private firm known as Marley Coffee LLC, corporate filings show, Rohan Marley has granted JAMN an “exclusive, transferrable, worldwide license” to use the “Marley Coffee” name to market the expensive coffee it apparently began selling just a few months ago. JAMN imports its coffee beans from Africa and Central and South America (rather than Jamaica itself), the company said, and then roasts them right here in North America before ultimately marketing the finished product – retailing for up to $72 (for a variety pack) before discounts -- with help from the beloved Marley name.

Since JAMN was still classified as a “shell” corporation when it filed its latest financial statements in December, reporting no revenue or cash in the bank at all, investors have been bidding up the stock based on mere faith – as opposed to actual evidence – that the company can drum up huge demand for its high-priced coffee. If the multiplesassigned to industry powerhouse Starbucks (Nasdaq: SBUX) serve as any guide, investors are basically treating JAMN like a company that sells almost $150 million worth of coffee a year already and boasts healthy profit margins (approaching 10%) on those sales to boot. 

At this point, in fact, JAMN actually looks more valuable on paper than the past “winner” that stock promoters like to tout when predicting just how successful the company could ultimately become. Through frequent and potentially expensive advertisements on Yahoo Finance (now gone), promoters have teased investors with sexy pitches about the “next Diedrich Coffee” -- which turns out to be none other than JAMN itself. Diedrich wound up bankrupt before recovering and selling itself to Green Mountain Coffee Roasters (Nasdaq: GMCR) for $300 million, records show, fetching a price that’s some $56.7 million LOWER than the market value assigned to JAMN despite its long-established presence in the coffee industry.

Even the powerful Marley name cannot fully explain the astounding market value enjoyed by this fledgling coffee company. As indicated above, JAMN can also be linked to another – less illustrious – name as well. 

Vancouver stock promoter Shane Whittle has been connected to the company for years. He served as a director of JAMN from August 2007 to May 2010, corporate filings show, while filling key executive posts -- including CEO, president, secretary and treasurer -- throughout much of that same time period. Whittle also doubles as CEO of a Canadian version of Marley Coffee, filings indicate, and ranks as a controlling player at U.S.-based Marley Coffee LLC – which provided JAMN with its most valuable asset (the Marley name) – as well. 

Whittle also ranks as a major shareholder of JAMN itself. He owned almost 10 million shares of JAMN stock last fall,records indicate, before selling 2 million shares – at just 2 cents apiece – in October and giving another 4.89 million shares away. Whittle smartly held onto 2.49 million of his JAMN shares, however, which are now worth almost $13 million following an incredible four-month run.

Whittle originally caught the attention of TheStreetSweeper a year ago because of his apparent connection to Big Bear Mining (OTC: BGBR.OB), a heavily promoted penny stock that flew above $1.50 but has long since crashed below 10 cents a share. Despite convincing evidence to the contrary, Whittle angrily denied any ties to BGBR and famouslythreatened TheStreetSweeper, tacking on a memorable curse – “Take your phone call and shove it up your ass!” – before hanging up the phone.

Whittle took the opposite approach, pouring on the charm, when contacted by a different reporter fromTheStreetSweeper this time around. He agreed to at least review questions emailed by TheStreetSweeper and then responded by offering some high-end Marley coffee -- “free of charge, of course” – and pitching coffee service forTheStreetSweeper office as well. (TheStreetSweeper declined that gift.)

Whittle never actually answered any of the softball questions he received, however, so TheStreetSweeper never bothered sending him more pressing questions – like those that had triggered his earlier outburst – after that time.

Waking up from the Dead

The ties between JAMN and Whittle appear to be as old as the company itself.

The company originally went public under the Marley Coffee name through a reverse merger with a recycling outfit, known as Global Electronic Recovery (GERV), about three years ago. GERV actually welcomed Whittle to its board the previous summer, records show, and soon followed up by executing a 23:1 stock split that increased the company’s outstanding shares from 3.66 million to 83.2 million – and its authorized shares to 1.7 billion – ahead of the reverse-merger deal. With that merger complete, the company began trading under the symbol MYCF – soon tapping Whittle as its president -- and became a brand-new coffee stock.

When MYCF adopted its new name in 2008, records show, the company also struck a deal with Whittle’s big-name cofounder that allowed it to enter the coffee business. Specifically, MYCF arranged to lease a small Jamaican coffee farm owned by Rohan Marley -- identified as an old soccer buddy of Whittle’s – for a mere $1,000 a year. The farm did not actually secure a license to sell Jamaican coffee (despite a decade of trying), The Jamaica Observer later revealed, until the year after that transaction took place. 

The very next year, records indicate, the company – now operating as JAMN – transferred that lease to a privately held version of Marley Coffee in exchange for its current license to use the Marley name and sweetened the deal by pledging huge chunks of its publicly traded stock to boot. All told, records show, JAMN agreed to issue Marley Coffee 10 million shares of stock (1 million shares annually over the course of 10 years) in a deal valued at just $640,000 on its books. Based on those figures, JAMN essentially placed the value of its stock at just 6.4 cents a share for the duration of that decade-long agreement.

JAMN inked that deal in March of 2010, with Whittle resigning from his executive and boardroom posts at the company to focus his attention on Marley Coffee – while still holding onto a big pile of JAMN stock – in the months that followed. Whittle oversaw a second stock split before he departed, however, leaving behind a company with almost 100 million shares outstanding and the authorization to issue 5 BILLION more. (The founder of GERV, who resurfaces occasionally to shift around stock, has since canceled and sold a big chunk of stock to bring the share count down to itscurrent level of 69 million shares.)

JAMN clearly had a rich abundance of stock after that second split, but nobody seemed terribly interested in buying it. Six months after that dramatic expansion in its share count, in fact, JAMN found itself bumped to the dreaded Grey Market -- a nightmare of illiquidity -- because market makers had apparently lost total interest in quoting the thinly traded stock.

JAMN finally began to take some action last December, three months into its exile, when the company negotiated a financing deal that promised to deposit some much-needed cash into its barren bank account. Specifically, filings indicate, JAMN inked a “share issuance agreement” with Straight Path Capital – identified as a United Kingdom firm – that would enable JAMN to raise up to $2.5 million (capped at $40,000 a day) by selling its stock to Straight Path for 40 cents a share. The original agreement lasts through Dec. 22 of this year, filings show, but can be extended further – or canceled entirely – under the terms of that deal.

On the surface, at least, Straight Path looks like a valuable financing partner that could transform JAMN into more than a colorful pipe dream. On the record books compiled by Companies House in the U.K. (which oversees corporation registrations), however, Straight Path does not exist

JAMN looks richer regardless. The company promptly returned to the OTC Bulletin Board two weeks after executing that curious deal, records show, with its stock poised to catch on fire. Pulling off a miraculous resurrection, JAMN quickly exploded in popularity to become one of the hottest – and most wildly promoted – stocks in the entire microcap space.

Sounding Alarms along the Way

Based on emails reviewed by TheStreetSweeper, the promotions apparently started in January – just as JAMN began actively trading again -- with a tantalizing teaser.

Around that time, records indicate, a promoter operating under the name “John Bell” through a website called hackthestockmarket.com began promising a hot stock tip to investors lured to his site by flashy ads on Yahoo Finance. Bell came across as far more selective than most stock promoters (generally eager to stuff mailboxes with as many paid touts as they can afford), however, by reserving his advice only for those investors smart enough to pass a mandatory financial quiz first.

“Look, I don’t want to be rude,” Bell stated on his website before it suddenly went dark last week. “But I’m looking for a small group of intelligent investors to be taught my stock market loophole” … and ultimately learn about an incredible stock tip.

The quiz included a total of five remarkably simple questions that, regardless of the responses, always landed investors in that “select” group as long as they provided the real information that Bell seemed to want in the first place: their email addresses. “Chosen” investors then found themselves whisked to a new page with a special “presentation,” records indicate, which proudly announced that – unlike 90% of those who took the quiz – they had managed to get every single question right. Even those who deliberately missed some questions, or changed their answers when taking the quiz again, somehow wound up with perfect scores. 

At that point, records indicate, Bell informed the crowd that they could learn the secret to his “loophole” by paying the cut-rate price of $129 – slashed from $497 originally! – for a 65-page “book” detailing his magical formula. As the author of that booklet, Internet records show, Bell portrayed himself as a rare genius suffering from Asperger’s syndrome – the same obsessive condition that (coincidentally?) afflicted the brilliant fund manager in The Big Short – who feels compelled to share the valuable fruits resulting from his disorder.

Nathan Busch, a Minneapolis-based patent attorney, caught on quickly. He uncovered Bell’s charade months ago and has meticulously documented his experience on his personal blog since that time. 

Busch clicked on the Yahoo Finance ad, passed the simple quiz (of course) and then fielded multiple emails from Bell promising a fantastic stock pick every few months for the modest sum of $97 a year. Busch also received an unintentional clue from Bell, signaling a likely scam, along the way.

At least one of Bell’s emails actually included a specific business name and street address: Stock Market Magic, Inc., 1132 Mercer Street, Green Bay, WI 54303. Busch dutifully did his homework and soon discovered that address does not exist. Quite simply, he found, there is not a Mercer Street located anywhere in the entire state of Wisconsin. According to the Better Business Bureau (BBB), Stock Market Magic is really located at 2818 Main Street in Vancouver – hometown to Whittle and a crowd of other stock promoters – and its address actually corresponds to a UPS store.

Bell may have learned about that BBB report himself, records suggest, because he has since adopted a slightly different name and an equally fictional address (Market Magic at 3473 Bay Street in Toronto) for his company.

Meanwhile, others who took Bell’s quiz (also acing it!) and later stumbled across Busch’s blog have passed along the emails they received. By mid-January, those emails indicate, Bell was already promising a hot pick on a stock that would rapidly triple in price. He continued to tease the crowd of investors who had studiously passed his test, however, by delaying the release of that magical stock on multiple occasions before finally coming through in late March.

On March 3, for example, Bell informed some of his anxious followers that he had decided to postpone his big news for a bit because the secret company had just “partnered with” Amazon – triggering a big jump in its share price – so he was waiting for a pullback to provide investors with a better entry point for the stock. Indeed, just one day earlier, JAMN had announced the appointment of an Amazon sales broker to place its products on the retailer’s popular website. JAMN’s stock ended that day precisely where it started, at 93 cents a share, but went on to hit $1.25 by the time Bell began emailing his pick and $1.50 by the time he actually posted that pick on his now-defunct website.

There, in hyperbolic prose, Bell proclaimed that “the Marley name … is synonymous with coffee” (not reggae, or even weed?) and pegged his discovery of JAMN sometime around the Christmas holidays. But JAMN was still tied up with “all the boring logistical stuff” back then (like resurrecting its stock from the ghostly Grey Market so it could really trade again?), he explained, so he waited through those housekeeping chores to spring his big news. He finally saw his perfect chance, he indicated, with JAMN “pushing a major roll out of (its) product across North America” and its stock still selling at ridiculously dirt-cheap prices.  

Only later did most of Bell’s followers learn that he had sent out email alerts to a select few back in mid-February, recommending JAMN at a much lower entry price – of just 80 cents a share – and thus enabling those early buyers to cash in hefty gains after he finally began touting his hot pick before the masses.

Pulling the Plug on the Power Source

Bell was never some charitable genius, bursting to share his valuable discovery, as his touching “presentation” implied. He is a paid stock promoter, of course. As noted in the tiny fine-print disclaimer at the end of his JAMN report, he received up to $15,000 from a mysterious firm – carrying the vague name Centurion Ventures – for a six-month promotion of the stock.

Bell apparently spawned a twin or two along the way. His report also surfaced on a second website,thelautnerletter.com, complete with the same pointless quiz that had teased his own followers for months. His bullish message showed up on a third website known as bullishbankers.com, dressed up with more sophisticated language and a fancier presentation, as well. Like Bell’s own website, both thelautnerletter.com and bullishbankers.com disclosed payments from an obscure firm carrying some version of the Centurion name.

Centurion Ventures Fund (identified in one disclaimer as the full name of that firm) serves virtually no purpose, Internet records suggest, beyond acting as a funding source for those paid promotions. It almost disappeared entirely last week, when the web-hosting servers for two of those Internet tout sites – hackthestockmarket.com and thelautnerletter.com – abruptly suspended their operations on the day that JAMN hit the peak of its frenetic trading activity.

By then, JAMN had finally awakened itself (with help from its high-end coffee?) and decided to officially distance itself from the powerful publicity campaign. On May 9, with its stock already pushed above $3 a share on paid touts, JAMNfiled an 8-K crammed with entire paragraphs denying any connection to the promotions. Taking a decidedly responsible tone, JAMN then urged the public to rely only on its press releases and regulatory filings – which last described the company as a shell corporation with no revenue or cash – when weighing investments in its stock instead.

That report, while more gripping than many regulatory filings, seemed to carry less punch than the flashy ads on Yahoo Finance promising riches to fellow masters of the financial markets. JAMN’s stock went on to double, hitting an all-time high of $6.35 a share, before the week came to an end.

That pattern – the aggressive publicity campaign first, the delayed company response second, the radical stock chartthroughout – bears an eerie resemblance to the jarring path blazed by another penny stock, Lithium Exploration Group (OTC: LEXG.OB), right before JAMN took its place as the favored microcap name. Fueled by one of the most expensive (if not the most expensive) stock promotions on record, LEXG flew from 12 cents to an astounding $10.68 a share – peaking one day after the company officially distanced itself from the promoters – before finally losing steam and collapsing

TheStreetSweeper published a detailed investigative report on LEXG, warning investors of a potential crash, during the midst of that wild ride. While LEXG boldly pushed the limits in the days that followed, soaring from $4 past $10 a share, the stock cracked soon after that and – just three weeks later -- now fetches less than half the price it commanded when TheStreetSweeper first sounded its alarm.

To longtime followers of overhyped penny stocks, JAMN looks like it has neared (or even reached) its tipping point as well. On a tear for the past month, interrupted by only a handful of down days along the way, JAMN finally started totake some meaningful hits late last week. The stock gyrated wildly on Thursday, swinging from an all-time high of $6.34 to an intraday low of $4.14 before closing above the midpoint of that wide spread. In that case, at least, JAMN still managed to trade above its previous closing price throughout the session and ultimately closed with a handsome 35% gain.

JAMN fared worse on Friday, however. Although the stock hit $6 once again that day, it soon reversed course and found itself closer to the $5 mark – actually down for a change – by the time that the closing bell rang.

To some, JAMN looks a lot like a movie that just hit the screens a month or two ago. If they’re right – with LEXG ranking as the original blockbuster and JAMN following as the popular sequel – then investors better like horror stories with bloody endings. Bluntly put, critics feel, this hot little stock could soon deliver a wake-up call with the fire-power of coffee – even the smoothest of brews – at full boil.

* Important Disclosure: Prior to the publication of this article, TheStreetSweeper (through its members) effected a “short sale” of 30,000 shares of the stock of JAMN, beginning on May 4, 2011, at an average price of $2.98 a share, with the intent of profiting from decreases in the price of the stock. TheStreetSweeper covered its entire position on May 18 at $1.51 a share.

* Update: TheStreetSweeper established a new short position in JAMN on May 20, when it sold 10,000 shares of the company's stock short at $2.58 a share. It increased its short position to 40,500 shares, at an average price of $2.13 a share, on May 23. It may choose to further adjust the size of this investment -- increasing, decreasing or covering its short position in the stock -- and will fully disclose the details of those trades as they occur.

* Update:  Due to the threat of a "forced buy-in," TheStreetSweeper covered its short position of 40,500 shares at an average price of 2.08.

* Update: TheStreetSweeper established a new position in JAMN on June 7, when it sold 55,825 shares of the company's stock short at $1.98 a share. It increased its short position by 5,000 shares on June 8 and has now sold a total of 60,825 shares short at an average price of $2 a share. TheStreetSweeper covered that short position, under a "forced buy-in," on June 13 at $1.99 a share.

As a matter of policy, TheStreetSweeper prohibits its editors and reporters from taking financial positions in any stocks that they cover. To contact Janice Shell, the author of this story, please send an email to editor@thestreetsweeper.org or directly to janiceshell@hotmail.com.

Share

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?

With oil prices on the rise worldwide, and nuclear reactors leaking in Japan, alternative energy stocks continue to soar, especially in Pennyland. Green may be good, but many of the “green” companies trading in the microcap arena – particularly highflying Lithium Exploration Group (OTC: LEXG.OB) – could burn investors if they run out of fuel and crash.


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.PKCEO 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 penniescurrently 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.OBCEO 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?

* Click here to start/join a discussion of this article or send tips for future news stories.

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

* Click here to start/join a discussion of this article or send tips for future news stories.

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

* Click here to start/join a discussion of this article or send tips for future news stories.

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

* Click here to start/join a discussion on this article or supply tips for future news stories.

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...