The January 15, 2004 press release cites an agreement between the Company and Promotional Containers, Inc. of Lexington, Kentucky. Sports Wheels claimed that, since signing that agreement, it had enjoyed "excellent short term results in promoting and providing access to major league sports and college industries." The Company went on to say that it had had "on-going discussions to commence projects oriented toward products which will be produced for its first step into major league sports."
SPORTS WHEELS, INC. (Pink Sheets: SSWH) - THE WHEEL TRUTH
Investigative Reports
April 21 2004
There is virtually nothing to say about Sports Wheels, Inc. (Pink Sheets: SSWH) - and that is precisely the point. The Company does not file regular reports with the Securities and Exchange Commission, its financial condition has not been made public, its operations are a mystery, and there is no handy way for the public to determine the number of outstanding shares or to identify the controlling shareholders.
Considering the absence of meaningful information, it is difficult to understand what would motivate investors to take a chance on Sports Wheels. Just what would they find appealing, the name? That makes the Company's trading history particularly interesting. Sports Wheels stock has languished at between one tenth and two tenths of a cent per share since June 2003. Last week, however, the price spiked to more than one penny, $.016 to be exact - a dramatic increase, even at those minimal prices. Almost 98 million shares changed hands on April 13th, the day Sports Wheels hit $.016, and another 154 million shares changed hands the next day as the stock price dropped to $.008.
The trend continued on Monday, April 19th, as 100 million shares of Sports Wheels changed hands, reaching an intraday high of almost one cent. Interest in the shares diminished suddenly, on April 20th, as volume dipped more than 70%, to 29 million shares
Still, there were buyers for those 29 million shares - even though no meaningful information was available. In fact, Sports Wheels routinely trades millions of shares each day, although at far lower prices than those of the past week. Where are all of the shares coming from, and what is motivating the buyers?
Like Sports Wheels, those matters remain a mystery.
Keep Those (Station) Wagons Rollin'
Sports Wheels may be a public company, but little information about this entity has been made available to the public. It does not file regular reports with the SEC, so potential investors and current shareholders do not know whether it has any assets, revenues, or operations. As best we can determine, the Company plans to produce automobile wheel rims and wheel covers with logos for professional and collegiate sports teams.
The little information that is available comes from a handful of press releases, the most recent of which was a January 15, 2004 press release claiming that "Sports Wheels Business Plan is on a 'Roll.'" But investors can glean very few material details from that announcement.
For instance, where is the Company located? The "dateline" on the press release is Vancouver, Washington, the Pink Sheets (which list Sports Wheels shares) give the Company's address as 101 East Eighth Street, Suite 130, Vancouver, Washington.
The balance of the announcement is decidedly less informative.
The January 15, 2004 press release cites an agreement between the Company and Promotional Containers, Inc. of Lexington, Kentucky. Sports Wheels claimed that, since signing that agreement, it had enjoyed "excellent short term results in promoting and providing access to major league sports and college industries." The Company went on to say that it had had "on-going discussions to commence projects oriented toward products which will be produced for its first step into major league sports."
We suspect that investors would find that description of the Company's business somewhat confusing. We certainly did. Anyway, the press release goes on to suggest that the Sports Wheels business plan remains in the development stage. The Company claimed that "with [its] unique application of colors and designs, the Company means to aggressively pursue a totally new and untapped market of sports logos, company designs and school colors to automobile wheels' rims and covers."
The "roll" to those wheels seemed to be coming from the relationship with Promotional Containers, but the press release did not describe that deal or enumerate its terms. Instead, it insists that the arrangement with Promotional Containers "has been a great step forward," and hopes for a "long-term relationship."
On the surface, however, it is difficult to see how a relationship with Promotional Containers is likely to get anything "rolling." We found a Lexington, Kentucky based company called Promotional Containers Manufacturing, but nothing called simply "Promotional Containers." Promotional Containers Manufacturing, which recently assumed control of an OTC Bulletin Board company called telecoBlue through a reverse-merger, is a professional photo packaging operation, specializing in wedding albums, baby albums and photo mounts.
If this is Sports Wheels' new business partner we cannot help but wonder how the relationship is likely to help promote and provide access to those major league and college sports.
Looking for the Spokes Persons
The Company's President is Paul Stringer. Since there have been no public filings by Sports Wheels, we have found little information concerning Mr. Stringer's background and qualifications. We did discover that Sports Wheels is a Nevada corporation, formed in 1981. The records of the Nevada Secretary of State list Paul H. Stringer as the Company's President, and gives his address as 1414 East Telegraph Street, Carson City, Nevada. Those records indicate that the Company's Secretary and Treasurer, Jerry Leslie, is located at the same address.
The Nevada corporate records yielded some additional information about individuals named Paul Stringer and Jerry Leslie. The two men are listed as managers or members of Ekospring LLC., a Limited Liability Corporation which was formed in Nevada in March 2001, and whose status already has been revoked. In this instance, both Stringer and Leslie provided addresses in Vancouver, Washington - Stringer at 6707 SE Riverside Lane and Leslie at 8405 NW 12th Avenue.
They also are named as the officers of Veterinary Petcare Network, Inc., which was created on March 1, 2000, and whose status now has been revoked. Stringer (identified here as Stiringer, but with the same Vancouver, Washington address) was the President, while Leslie again served as Secretary and Treasurer.
The records of the Nevada Secretary of State indicate that a man named Paul Stringer has been involved with several other companies:
He is listed as President, Secretary and Treasurer of Supercart International, Inc., this time with an address in Beaverton, Oregon. That Company was incorporated in 1987 and its status has been revoked.
Paul Stringer also is listed as President and Treasurer of Simulator Systems, Inc. Here again, while the Company has an address in Nevada, Stringer gives his location as Vancouver, Washington. Simulator Systems was incorporated in April 1997 and later either merged or dissolved.
Paul H. Stringer was also designated Treasurer of Home Range, Inc., which was incorporated on June 11, 2002 and is presently listed by the Nevada Secretary of State as being in "default." Once again, Mr. Stringer is identified at the Vancouver, Washington address.
Finally, Paul Stringer of Beaverton, Oregon was listed as Treasurer of Music and Entertainment Network, Inc., which was formed in June 1987 and later merged or dissolved.
The name Jerry Leslie also appears elsewhere in the records of the Nevada Secretary of State - as President and Treasurer of Money Planning, Inc. (with a Henderson, Nevada address), and as Treasurer of TDNC Nevada, Inc. (with a Vancouver, Washington address) whose corporate status has been revoked.
Of course, there could be more than one set of individuals named Paul Stringer and Jerry Leslie serving as officers of all of these Nevada corporations.
We were able to gather some additional information on Money Planning, the Nevada corporation headed by one Jerry Leslie. Money Planning is a financial consultant, investment advisor, and health insurance company operating in Henderson, Nevada, far from the Washington State offices of Sports Wheels. An answering machine message at the telephone number listed for "Money Planning" in Henderson said we had reached the office of Jerry Leslie, Certified Financial Planner, and Money Planning.
Does Money Planning or any of its principals or clients hold a position in Sports Wheels stock? Absent publicly filed reports, the Company's controlling shareholders remain anonymous. Is there any chance that Money Planning has been advising clients to buy shares of an obscure company called Sports Wheels - and if so have those clients been advised of Mr. Leslie's past, or present relationship with Sports Wheels?
Who else is on the Sports Wheels management team? Again, investors must rely upon a handful of press releases for information about the Company. A June 6, 2003 press release indicated that an individual named William J. Baron had been named Sports Wheels' Vice President of Engineering and Design. According to the Company, Mr. Baron has extensive contacts in the entertainment industry, and has overseen the design and development of new products for such companies as Ted Turner's Captain Planet, Nintendo, Cabbage Patch Kids, and the former World Wrestling Federation.
Does Mr. Baron have a contract with the Company, and if so, what are its terms? Does he own shares? The press release did not say.
It did, however, attempt to articulate the Company's business strategy. As Paul Stringer explained, "there are nearly 1 billion tires on registered cars at this time and if we can capture even 1% of that market that could mean substantial revenue to the Company."
True, but what is the likelihood that one out of every hundred car owners will want a sports logo for their auto wheel covers?
As best we have been able to determine, the Company has revealed the identity of only one other member of its "team." On July 16, 2003, the Company revealed that Mychal Thompson, who played for the NBA Los Angeles Lakers and Portland Trailblazers from 1978 until 1991, had joined its "advisory team." In making that announcement, Paul Stringer conjectured that Mr. Thompson would "greatly increase" the Company's chance of establishing "a significant foothold within the athletic community." The July 16th press release said that Mychal Thompson would be working with William J. Baron - though it did not explain how the former pro athlete (and more recent radio sportscaster) would be involved with the Vice President for Engineering and Design.
Sports Wheels did not name any other members of its "advisory team" or offer details of its role. Nor did it explain how Thompson would be assisting Baron with the efforts to obtain rights to use sports logos.
Some Fuzz and a Buzz
While these press releases provided little material information about the Company's employees and advisors, they did offer a few tidbits about Sports Wheels - even if the details were somewhat fuzzy. For example, the June 6th press release stated that Sports Wheels had signed a licensing agreement with Eko Thermal Coatings to use a patented process that "bonds and fuses glass to metal" that it intended to utilize to obtain logo rights from universities and professional sports teams. It did not explain how this fusing process might enhance the chances for obtaining those "logo rights" and no terms of the licensing agreement for the fusing technology were disclosed. It did, however, reiterate the existence of this licensing agreement in the July 16th press release.
Both the June 6th and July 16th press releases also claimed that Sports Wheels "is currently working to achieving a full listing on the Over-The-Counter market." Presumably, that means the Company has plans to become listed on the OTC Bulletin Board. Before that can happen, however, it will have to file current reports, including audited financial statements, with the SEC. At least then, investors would have some verifiable information about Sports Wheels and its operations.
We found one other press release of note issued by the Company. On June 10, 2003, Sports Wheels announced that it had entered into a five year financial consulting agreement with Strata Associates, Inc., under which Strata would use its "best efforts" to raise up to $5 million in funding for the Company. The press release provided no material information about Strata. It did not identify a single individual associated with Strata, say where Strata was located, or offer any information regarding Strata's experience, credentials, or ability to raise funds.
Despite the paucity of information, several promoters have been priming the market for Sports Wheels stock. On January 27, 2004 TheSubway.com sent out a press release giving a "Market Perform" rating to Sports Wheels. That same press release rated Verizon Communications as a "Market Underperform."
TheSubway.com has run off of the rails in the past. In August 2003 the SEC filed a civil action charging several promoters, including Capital Research Group, which owns and controls TheSubway.com, with participating in a complex scheme designed to deceive investors through baseless financial projections and myriad misrepresentations. See, This Subway is Stalled. The press release that offered a "Market Perform" rating for Sports Wheels was prepared by Capital Research Group.
And TheSubway.com is not alone. On April 15, 2004, an outfit called "Wall Street News Alert," which identifies itself as a division of "Wall Street Capital Funding LLC," named Sports Wheels as one of its "stocks to watch." "Wall Street News Alert" cited the 153.5 million Sports Wheels shares traded the previous day, and the 23% decline in the Company's stock value on April 14th.
Is all of this sudden interest in Sports Wheels being fueled by the availability of shares? To make that calculation, stockholders would have to know how many shares have been issued, and when - and that information has not been publicly available.
The Company has, however, filed one document reflecting the sale of shares - although it is not available electronically through the SEC's Edgar system. We obtained a copy of that document this week - a Form D, filed on or about October 15, 2003 reflecting Sports Wheels' plan to sell shares in a private offering. That Form D reiterated the Company's intention to sell wheels bearing the logos of sports teams, affinity groups, and other organizations. But while it claimed that the Company "is in negotiation with several groups and wheel makers and/or distributors for the sale and distribution of its products," there was no indication that any products are actually in production or ready for sale.
The Form D lists Paul Stringer and Jerry Leslie as officers and directors of Sports Wheels, and indicates that each of them owned or controlled more than 10% of the outstanding stock - although it does not specify the number of shares owned or controlled by either man. It also states that the Company wanted to raise $1 million through the private offering, but so far had managed to secure only $78,000, from three "accredited investors" - meaning investors who could demonstrate sufficient assets or income. This seemed to indicate an appendix to the filing which suggested that the Company raised $68,000 by selling common stock to eight accredited investors in Colorado.
The Form D omits one key fact. How many shares was the Company selling? That information was not available. We did learn, however, that Sports Wheels effected a 10 for 1 split of its common stock on November 5, 2003, benefiting those individuals who owned shares as of October 20, 2003.
How many shares did that leave outstanding? Like virtually everything else about Sports Wheels, that information remains elusive.
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