Global Links, ROBERT C. SIMPSON HAS DIPLOMA MILL DEGREE. ROBERT C. SIMPSON (100% OF THE FLOAT MAN) JOINS FELLOW DIPLOMA MILL DEGREE GRAD PAUL BROWN OF NUCLEAR SOLUTIONS (r.i.p). EUROTECHNICAL WAS RUN OUT OF A GUYS HOUSE IN CALIFORNIA, BUT LATER MOVED TO HILO HAWAII WHEN THE FBI WAS PUTTING THE HEAT ON DIPLOMA MILLS DURING OPERATION DIPSCAM BTW. MAYBE NEXT TIME THAT SENATOR TALKS AGAIN ON THE HILL HE CAN ALSO MENTION THE DIPLOMA MILL DEGREE PROBLEM ALSO.
"Eurotechnical Research University " INDEED LOL
His educational experience includes Michigan State University where he studied Education Systems Development. At Eurotechnical Research University he studied Business Administration and received a Ph.D. He also studied at Central Michigan University and the University of Michigan for Business Administration where he achieved a M.A. and B.B.A, respectively.
The biography does not indicate the location of Eurotechnical Research University or the dates on which SIMPSON received his degrees. In April 2002, an Administrative Law Judge for the U.S. Department of Health and Human Services concluded that Eurotechnical Research University, which had been issuing educational credentials, had been operating from a post office box in Hilo, Hawaii, and was unaccredited. At least one website lists Eurotechnical Research University at a post office box in Palo Alto, California – with no telephone number. Other documents indicate that Hawaii's Eurotechnical Research University offers a doctorate program in martial arts.
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ZannWell, Inc. - A Doctor in the House
Investigative Reports
November 24 2004
The over-the-counter markets are cluttered with "emerging growth companies," entities that have yet to develop meaningful operations, assets or revenues. It is easy for any struggling public company to get lost in that sauce. Lately, however, a growing handful of companies have latched on to a new hook, transforming themselves into "business development companies" and thereby distinguishing themselves from the bulk of their brethren.
A Business Development Company (BDC) enjoys certain advantages, including the ability to issue shares that are exempt from registration. See The Investment Company Act of 1940 – It Was a Very Good Year. In return, 70% of the BDC's assets must consist of qualified securities of other companies. That too can prove advantageous since the BDC's worth may be tied to the stock price of those portfolio companies, even when that market price does not reflect intrinsic value.
One company seeking to enter the ranks of BDC's is ZannWell Inc. (OTCBB). On November 19, 2004, ZannWell filed an Information Statement advising shareholders that the Company's directors would be granted authority to convert the business into a BDC before the end of 2005. It would mark just one more incarnation for an entity that has seemed poised to pursue a series of different businesses – but has yet to produce significant revenues.
Does this mean ZannWell is preparing to abandon its recent foray into real estate and business development, as it did with plans to focus on medical-immune disorders? Or does the Company plan to incorporate these ventures under the BDC umbrella – and if it does, will they qualify as acceptable portfolio companies?
The Company's direction and the means to implement these changes may remain up in the air, but that has not deterred investors. ZannWell recently found itself among the volume leaders on the OTC Bulletin Board, trading 40 MILLion shares on November 5th and 30 MILLion shares on November 8th. Indeed, despite the Company's continued search for direction and glaring absence of revenues, it has consistently traded in excess of one MILLion shares a day since mid-July 2004.
Leading us to wonder, just what are they seeing here?
The Post Vietnam Era
Until mid-2004, the Company now called ZannWell was known as USA Telcom Internationale. The Company's principal goal was to act as an intermediary between buyers in Vietnam and sellers, of goods or services, in the United States. If the business plan proved viable, the Company would receive fees for its services. By the end of 2003, the future of that enterprise seemed shaky and USA Telcom was in precarious financial condition. The Company had no revenues in 2003 and its current assets, as of December 31, 2003, totaled $615 – consisting of $115 in cash and $500 of marketable securities.
Not surprisingly, the Company decided that a change was in order. On March 19, 2004, USA Telcom sold 13 MILLion of its common shares - 70% of its outstanding stock - to Dr. Robert C. SIMPSON for $260,000. Dr. SIMPSON, who now controlled the Company, became its President, Chief Financial Officer and Secretary, as well as a director.
At the time, Dr. SIMPSON already was serving as President and director of another obscure OTC Bulletin Board Company, ATNG, Inc. (OTCBB: ATNG). He continued his affiliation with ATNG after assuming control of USA Telcom. His biography, which appears in ATNG's Form 10-K for the year ended December 31, 2003, states that Dr. SIMPSON's previous positions included stints as CEO of Pathobiotek Diagnostics, Inc. (Texas) and as president and director of Pathobiotek Diagnostics, Inc. (Nevada), which was engaged in bio tech research.
That particular biographical summary does not indicate the nature or source of SIMPSON's doctorate credentials. An earlier summary of his background, which was included in ATNG's Form 10-K for the year ended December 31, 2000 (at which time, by the way, ATNG was called Pathobiotek Diagnostics, Inc. (Texas), offers the following insight into Dr. SIMPSON's educational credentials:
His educational experience includes Michigan State University where he studied Education Systems Development. At Eurotechnical Research University he studied Business Administration and received a Ph.D. He also studied at Central Michigan University and the University of Michigan for Business Administration where he achieved a M.A. and B.B.A, respectively.
The biography does not indicate the location of Eurotechnical Research University or the dates on which SIMPSON received his degrees. In April 2002, an Administrative Law Judge for the U.S. Department of Health and Human Services concluded that Eurotechnical Research University, which had been issuing educational credentials, had been operating from a post office box in Hilo, Hawaii, and was unaccredited. At least one website lists Eurotechnical Research University at a post office box in Palo Alto, California – with no telephone number. Other documents indicate that Hawaii's Eurotechnical Research University offers a doctorate program in martial arts.
Did Dr. SIMPSON receive his doctorate from the Eurotechnical Research University whose campus seems to be centered in a Hilo post office box, from the Eurotechnical Research University that resides in a post office box in California, or from another, possibly accredited Eurotechnical Research University that we have been unable to identify or locate? His biography does not say - although a subsequent filing by ATNG indicated that he received his PhD in Business Administration from Eurotechnical Research University in 1992 and a PhD in Education from Michigan State University in 1998..
The infusion of $260,000 that resulted from Dr. SIMPSON's investment did not necessarily mean that USA Telcom's financial concerns were in the past. Unless the Company suddenly began to generate revenues, a significant portion of the money paid by Dr. SIMPSON for his shares seemed destined for the coffers of AMVI First Corporation, a company owned and controlled by USA Telcom's departing Chief Executive Officer, Allen Jones. On March 19, 2004, the Company agreed to pay $141,516 to AMVI in exchange for "business strategy consulting services." Less than a week later, on March 23, 2004, AMVI purchased all of the Company's existing assets, totaling $301,069 (including a $300,000 note) for $10,300 in cash.
That left Dr. SIMPSON with a shell company to mold and transform. He seemed prepared to do that, by acquiring another business in which he had an interest, a company called Blue Kiwi, Inc. A Form 8-K was filed by USA Telcom on April 5, 2004 announcing Dr. SIMPSON's ascension and noting the possible acquisition of Blue Kiwi. That filing provided no further information about Blue Kiwi, its business, its financial status, its plans, or its precise affiliation with Dr. SIMPSON.
There were other changes on the horizon. On June 7, 2004, the Company notified shareholders that it would change its name to ZannWell, increase its authorized common stock from 25 MILLion shares to 900 MILLion shares, and authorize the issuance of 50 MILLion shares of preferred stock. The notification, through a Form 14C Information Statement, was a formality. The changes already had been approved by Dr. SIMPSON, who continued to control more than 75% of the Company's outstanding shares. As a Nevada corporation, USA Telecom could make such changes at the direction of its controlling shareholder.
The Information Statement included one other item of interest to public shareholders who awaited the Company's transformation into a revenue producing, potentially profitable entity. Details of the Blue Kiwi business no longer were relevant since plans to acquire Blue Kiwi had been abandoned. The Company offered no explanation, saying only that it would either "commence operation or acquire another business with operations in which Dr. SIMPSON may have an equity interest."
And while ZannWell had given up on Blue Kiwi – and its unidentified operations - SIMPSON had not. Blue Kiwi resurfaced at SIMPSON's other public company, ATNG.
But first, commencing operations could prove a formidable task since Zannwell had no remaining operations – having sold its few assets to Allen Jones. In any event, the Company did not describe the operations it contemplated commencing.
Nor did it identify the operating business it might acquire – or the nature of its business, the state of its finances, or the terms of a potential acquisition. It did. However, indicate that Dr. SIMPSON might receive additional capital stock of Zannwell as a result of the acquisition.
Having authorized additional common shares, the Company moved quickly to register a bundle of them. On June 15, 2004, the Company filed a Form S-8, registering 7.5 MILLion shares to be issued to employees, directors and consultants under the "USA Telcom Internationale 2004 Employee Stock Incentive Plan" and the "USA Telcom Internationale 2004 Non-Employee Directors and Consultants Retainer Stock Plan." Then, on July 23, 2004, the Company amended the Form S-8, registering 207.5 MILLion shares for the two plans.
The Company did not indicate whether any of the shares had been issued, or identify the individuals to whom they might be awarded. As a practical matter, the shares to be issued under the two plans would represent a dramatic increase in the capitalization of the Company, which had 17,250,000 shares outstanding as of March 31, 2004 – including the 13,000,000 shares held by Dr. SIMPSON.
Shifting Course – Again and Again
Although it now had new ownership and management, and a treasury filled with shares to be handed out to employees, directors, consultants and in connection with potential mergers and acquisitions, the Company still had no business. On July 7, 2004, it took a step toward establishing a new identity, announcing that the Company would now be named ZannWell. The July 7th press release contained one other item of notice. ZannWell now claimed that it was a Business Development Company (BDC) with a primary focus on medical entities.
At the time, ZannWell did not say when it had elected to become a BDC or how that might affect the Company and its shareholders. Business development companies are regulated under provisions of the Investment Company Act of 1940, a relatively esoteric statute when compared with the Securities Act of 1933 and Securities Exchange Act of 1934, both of which are considerably more familiar to investors and securities industry professionals. BDCs enjoy a number of rights not generally shared by other public companies, including the ability to issue unregistered stock without SEC review.
A BDC also has a unique ability to accumulate assets whose actual value could prove quite speculative – including shares of highly volatile over-the-counter stocks.
In order to qualify as a BDC, at least 70% of a company's assets must consist of securities of "eligible portfolio companies" and cash. In short, an eligible portfolio company includes any issuer which is controlled by a BDC or which has less than $4 MILLion in total assets and more than $2 MILLion in capital surplus. The BDC can acquire those securities by several means, including from the issuer or any person affiliated with the issuer.
The BDCs assets are measured, in substantial part, by the market price of these portfolio shares. Consequently, if those prices become inflated, so do the BDC's assets.
Did this mean that ZannWell was planning to acquire medical entities for its portfolio? If so, how did the Company plan to pay for them? And while the acquisitions might enhance ZannWell's balance sheet, how would they translate into revenues? The Company offered no details of its plan and did not name any "medical entities" it wished to target.
On July 15, 2004, ZannWell announced the appointment of a new President and CEO, Dr. Luther E. Linder. The Company said that Dr. Linder also was continuing to serve as President and Chief Medical Officer of a company called Pathobiotek, Inc. and that he had headed twelve years of research for the Blue Kiwi nutraceutical line. The July 15th press release provided no further information about Pathobiotek, but the public records of the Nevada Secretary of State offer a smattering of information. Pathobiotek was formed in June 2001 and identifies its President and Treasurer as Robert C. SIMPSON and its Treasurer as Luther E. Linder.
As noted earlier, ZannWell already had given up efforts to acquire Blue Kiwi – but as we will see, Blue Kiwi continues to have a relationship with another public entity controlled by Dr. SIMPSON.
Dr. Lindner's tenure at the Company was short lived – as, apparently, was ZanWell's focus on the medical field. On August 12, 2004, the Company announced that Pat Liska, a food industry professional whose most recently had served as President of Fleming Foods' Rainbow Store operations, would be taking over at ZannWell and that the Company would shift its focus from "medical-immune disorders" to "real estate and business management." The terms of Mr. Liska's employment were not disclosed.
And, after less than one month at the helm, Dr. Lindner would be departing to become CEO and President at a "strategic partner" Cryptobe, Inc. where he would continue to investigate development of products to treat immune disorders. The Office of the Nevada Secretary State indicates that Cryptobe was formed on April 19, 2004. Robert C. SIMPSON is listed as President, Secretary and Treasurer of Cryptobe. It is not clear how Cryptobe would serve as ZannWell's strategic partner since the Company was no longer pursuing relationships in the "medical-immune disorder" industry.
ZannWell had changed direction, and still had not disclosed any acquisitions, but that did not stop the Company from offering the following description of its business:
ZannWell builds strategic relationships and acquires the companies with superior performance. Their primary focus is on real estate and business development.
Unfortunately, the Company had yet to identify those strategic relationships (other than the reference to Cryptobe), explain how its strategic partners might enhance ZannWell's finances, or identify any of those companies with "superior performance" in the acquisition pipeline.
An October 25th press release was hardly more illuminating. The Company claimed that it was "currently working on the acquisition of Real Estate properties and opportunities in the wholesale/retail food operations," and would concentrate on "acquiring and developing businesses that have an opportunity to generate revenue in a three to six month period." ZannWell's latest CEO, Pat Liska, explained that the Company believed its "strategy of focusing on opportunities we have identified in the wholesale/retail food areas are the appropriate paths for the company to take." That sounded logical considering Mr. Liska's background. Still, the press release provided no meaningful information about those potential acquisitions and did not indicate whether any negotiations had advanced toward consummation.
The October 25th press release also promised that ZannWell was creating a new website, which would be available in the near future. While that website remains "under development" it does contain some details that have yet to appear in the Company's skeletal press releases and public filings.
And, in some instances, notable distinctions. For example, the Company's recent press releases and public filings indicate that ZannWell is headquartered in Fenton, Michigan, but the website claims the principal corporate office is in Bloomington, Minnesota.
More importantly, the website discloses an intimate relationship between ZannWell and ATGN, Inc. (OTCBB: ATNG), another aspiring BDC controlled by Dr. Robert SIMPSON. As best we can determine, similar details of that relationship do not appear in ZannWell's press releases or public filings.
According to the ZannWell website, ATNG formed an entity called Danitom Holding Corporation in Nevada on July 15, 2004, to act as a holding company for the acquisition of real estate properties. The publicly available records of the Nevada Secretary of State reveal that Danitom was formed on July 9, 2004 and is already in default with the State of Nevada. Those records do not identify any officers of Danitom or specify a relationship between ATNG, SIMPSON or ZannWell.
ZannWell explains that Danitom was slated to become a "strategic partner" of ATNG, and subsequently to be acquired by ZannWell. The Company indicates that Robert SIMPSON decided to "assign" Danitom as a subsidiary of ZannWell after Pat Liska came aboard, suggesting that Dr. SIMPSON is calling the shots at each of these entities. As best we can determine, ZannWell has not filed any public documents reflecting Danitom's status as a ZannWell subsidiary.
What business does Danitom intend to pursue? The Company's website claims that Danitom plans to invest "mainly in established properties with predictable cash flows or in which a seller agrees to provide certain minimum income levels" and will attempt to "purchase direct ownership interests in properties with triple net leases with credit rated tenants that are income-producing." Danitom also may invest in other income-producing real estate, real estate development projects or real-estate related investments, including real estate investment trusts (REITs).
That pretty much runs the gamut of potential real estate projects, but begs one important question – how does Danitom plan to finance these ambitious projects? As of June 30, 2004, ZannWell had approximately $34,000 in the bank, a considerable drop from the $105,000 in ZannWell's bank account on March 30, 2004. That dip was even more glaring since ZannWell had no revenues and its expenses for the three month period, over $376,000, exceeded its available cash. Adding to that sad financial picture, as of June 30th, ZannWell owed $150,000 to ATNG, another SIMPSON controlled entity, for unspecified "expenses."
The ZannWell website makes no mention of the Company's financial condition. Instead, it focuses on the Danitom relationship, claiming that Danitom already has "begun" purchase agreements on two commercial real estate investment properties – although it does not identify the properties, indicate the status of those agreements or possible obstacles to their completion, provide terms of the acquisitions, or say how Danitom intends to pay for any properties. Instead, it simply asserts that
Zanwell will proceed through its normal process of funding, evaluating, stabilizing and performing ongoing analysis and audit of Danitom with the eventual goal of having Danitom operate independently under the ZannWell umbrella, but also in concert with ATNG as a Strategic Partner to take advantage of the many benefits offered by the ATNG organization.
Investors and observers may be surprised to learn that ZannWell has a "normal" evaluation process since it is not clear that the Company has undertaken, or completed, any other transactions.
The Company's current financial state is reflected in its most recent quarterly report, a Form 10-Q for the quarter ended September 30, 2004. As of September 30th, ZannWell's assets totaled $11,504 – consisting of "cash and equivalents." Liabilities, on the other hand, were slightly more than $86,000.
The Company still has not had any revenues in 2004, although it reported operating expenses of more than $29 MILLion for the first nine months of the year – virtually all of which was attributed to stock that the Company issued for services. That included 73.2 MILLion shares that unidentified ZannWell employees received by exercising options. ZannWell received approximately $130,000 from those option exercises.
The Form 10-Q also reveals a new acquisition for ZannWell, courtesy of Dr. SIMPSON's other company, ATNG. According to the Form 10-Q, ZannWell has entered into an agreement to acquire a business called Future Beverages, Inc. from an "affiliate" of ATNG. ZannWell provided no details of that agreement and no financial statements for Future Beverages, but predicted that the new venture would be profitable in early 2005. The Company indicated that its new facility is located in Tempe, and that Future Beverages "has a patented 'Cold Fill Process' for enhanced healthy beverage production like tasteless water with glucosamine and several other products.
There is no indication, however, that Future Beverages' products are presently in the marketplace or, if they are available, whether they have generated material revenues to date.
We discovered one other interesting item of information posted on the ZannWell website. The Company is represented by Equitilink, an investor relations firm which represents a number of other obscure, struggling companies, including several which have been featured in reports on StockPatrol.com – most, notably, Diamond Discoveries International, Inc. (OTCBB: DMDD); Signature Leisure (OTCBB: SGLI); and Cal-Bay International, Inc. (Pink Sheets: CBYI). The Company does not indicate the terms of its arrangement with Equitilink, or whether the investor relation firm is receiving cash, stock, or options in exchange for its services.
Equity Links Of Another Sort
Since acquiring control of ZannWell, Dr. SIMPSON has consolidated and improved his position. On July 12, 2004, the Company issued him 1,000,000 shares of Series A preferred stock and 10,000,000 shares of Series C preferred stock. Each share of Series A preferred stock may be converted into 10 shares of ZannWell common stock. Series C preferred shares are not convertible into preferred stock, but each share is entitled to 100 votes.
In other words, SIMPSON may obtain an additional 10 MILLion shares of ZannWell common stock by converting his Series A preferred shares, and he is entitled to 1 billion votes on all company matters by virtue of his Series C preferred stock holdings.
There is no doubt about who controls the Company.
Nor does this necessarily reflect the full extent of his share ownership. The June 30, 2004 Form 10-Q notes that, on June 25, 2004, ZannWell employees exercised options to purchase 2 MILLion shares of common stock at 3 cents a share. The Company did not indicate which employees participated in the option exercise, or whether Dr. SIMPSON was included. It is not clear, however, that the Company had any employees other than Dr. SIMPSON on June 25, 2004.
The Form 10-Q also disclosed that ZannWell issued 13.5 MILLion shares in July and August for "services" - although it does not describe the nature of those services or the individuals by whom they were rendered.
The Company also issued options to purchase 54 MILLion shares of common stock, at prices ranging from one cent to eight cents a share, for a total of $142,000 – but, here again, did not say who purchased the options. As a result of these various stock sales, over 86.75 MILLion shares of ZannWell common stock were outstanding on August 15, 2004 – compared to a mere 19.25 MILLion shares outstanding less than two months earlier on June 30th.
Some individual or individuals were receiving significant parcels of ZannWell shares, but whom?
Enter the BDC
Although ZannWell has referred to itself as a BDC since at least July 7th, only recently has the Company moved toward formalizing that status. On November 5, 2004 the Company filed a Preliminary Information Statement informing shareholders of plans to
• change its name to Danitom Corp.;
• increase the authorized common stock from 900 MILLion to 2 billion shares;
• increase the authorized preferred stock from 50 MILLion to 235 MILLion shares;
• authorize the board of directors to implement a 1 for 800 reverse split of outstanding common shares (or some lesser reverse-split at the board's discretion);
and finally,
• authorize the board of directors to convert ZannWell into a BDC.
Once again, the Information Statement is little more than a formality advising public shareholders of action approved by the two controlling shareholders, SIMPSON and Liska. According to the Information Statement, holders of Series A preferred stock have one vote for each share held, while holders of Series C preferred stock have 250 votes for each share owned – based upon an amendment to the Certificate of Designation of Rights for Preferred Shares, which initially granted Series A preferred shares and Series C preferred shares zero and 100 votes, respectively.
The Information Statement did not discuss, or even acknowledge, the status of the existing Danitom, or explain any relationship between that entity, ATNG, and ZannWell. None of the details of the Danitom operation, which offered on the ZannWell website, appear in the Preliminary Information Statement.
And what of the plan to become a BDC? The Company claims that, if the Board of Directors – apparently consisting of SIMPSON and Liska – decide to opt for BDC treatment, the Company would be able to raise additional funds for operations and develop a larger investor base. But if the Company is not yet a BDC – and may opt not to become one – why has it been calling itself a business development company in each of its recent press releases?
This is only one of many questions surrounding ZannWell, its operations and its plans. A host of other questions relate to the Company's relationship with ATNG, as we shall see when we look at that entity as we continue our series on business development companies.
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