I will make waste mountains and hills, and dry up all their herbs; and I will make the rivers islands, and I will dry up the pools.
Isaiah 42:15
Liquidix Inc.
symbol: LQDX OTCBB
issued capital: 29.5 Million
market cap: ~ $90 Million (at recent price of $3)
Liquidix Inc. - All Roads Lead to $.10
Liquidix Inc. (LQDX) was recently formed when Learners World (LRNW) acquired a company called
Advanced Fluid Systems Inc.(AFS) from Liquidics Inc. (LIQD). If you are confused it is completely
understandable.
INTRO
Let's review: The saga starts when a pink sheet company called Future Projects IV Inc.(FTPJ)
announced, on March 2, 2000, the acquisition of a private Delaware company called Liquidics Inc.
Future Projects was to change its name and trade on the pink sheets under symbol LIQD.
Liquidics owned a licensing agreement for a process to produce a thinner and lighter silicon chip,
and a line of seals based on magnetic fluid technology acquired from Advanced Fluid Systems
Inc.(AFS), of London, England. Announcements by President Perry E. Barker mentioned new
facilities in Arizona and Texas, new contracts, and a website at www.mcomm.com/liquidics (a paid
investor relations site for a large number of pink sheet and otc bb companies). In spite of all this
promise, the company was not heard from again until March, 2001. At that time, they announced
completion of the AFS (of London) purchase for 3.6 million reg. S shares of LIQD. Last and final
news from LIQD was a press release dated June 5, 2001, announcing that new patents had been
issued to its U.S. subsidiary, AFS.
Based on the drifting stock price (from $2.50 when the AFS acquisition was announced to a recent
$.13), it is questionable whether any sales ever materialized for LIQD. According to the corporate
records, AFS is a "private limited company". Furthermore, patent searches in the U.S. do not list any
patents or patent applications held by AFS in the U.S. A check at the European patent office shows 8
patents registered to AFS, and all 8 were invented by director Douglas Alan Brooks (8% owner of AFS):
gb.espacenet.com
Perry E. Barker, who came to LIQD with the AFS acquisition, and is its President, has had
some problems. He was accused and convicted of "misappropriation of trade secrets, breach of
covenant not to compete or disclose trade secrets, violation of fiduciary duty owed to an employer,
false representations in marketing and sales, and tortious interference with contract and other
advantageous business relationships." (Business Wire, April 24, 1992). Mr. Barker worked
for Ferrofluidics and left to set up his own company (Advanced Vacuum Components Inc.)
with various Ferrofluidics proprietary information. Federal Senior Judge Martin F. Loughlin (U.S. District
Court for the District of New Hampshire) concurred with the Ferrofluidics allegations and restrained
Barker from "engaging in the manufacturing or selling of magnetic fluid rotary seals". It's not clear
whether or not Barker is in breach of the restraint given that AFS is in the identical market.
LIQD was also being promoted on the internet at www.pinksheetsotc.com:
google.com
pinksheetsotc.com is registered to a company who's administrative contact is Ray Carapella, technical
contact is Internet Marketing Solutions, and the phone number belongs to one Robert Esposito.
Enter LRNW: On September 27, 2001, LRNW announced that it would purchase AFS from LIQD and
continue as Liquidix Inc. (LQDX). LRNW had been in the day care business, then tried to morph into an
internet company. It was not the cleanest of vehicles, as on June 14, 2000, the SEC and the FBI charged
a group of stock promoters that included Alan Z. Wolfson, with manipulating trading in the shares of
LRNW, among others:
fbi.gov
sec.gov
Why LIQD would be selling it's newly acquired asset is unclear. In fact, LIQD has yet to issue a
press release to tell investors of this turn of events. The deal has been orchestrated by Robert
Esposito and Ray Carapella, who were already involved via their promotion of LIQD at pinksheetsotc.com.
LRNW is to be continued as a Florida Company registered by Robert Esposito, who is listed in the
8K that describes the transaction, as a "consultant" who is to be given 2.3 Million shares. Another
player mentioned in the S8 as receiving 50,000 shares is lawyer Richard D. Surber, who according
to public records, is the nephew of Alan Wolfson mentioned in the litigation release above.
The deal is a strange one, in that usually an "asset" is vended into a shell for a combination of cash
and shares to the vendor. In this case, the old group (LIQD) is receiving 27 Million shares of LQDX,
but rather than receiving cash, it is paying for its shares with $500,000, or the equivalent of $.019/share.
As LIQD was a non-filing pink sheet company, it is virtually impossible to tell who is receiving those
shares, but we do know that Esposito/Carapella were promoting the company at pinksheetsotc.com.
We also know that another company controlled by Esposito, stocktopics.com, is to recieve 200,000
shares to promote LQDX.
On Oct. 3, 2001, LQDX announced new U.S. patents issued to its subsidiary AFS. There are no
patents issued, as a search here will confirm: uspto.gov
Even stranger, this press release is a carbon copy of the LIQD press release of June 5, 2001.
Esposito/Carapella History of Crime
Robert Esposito, along with his long-time associates the Carapella brothers, are Florida businessman
who have been involved with drug trafficking, pornography, and stock promotion. Their previous stock
market deals appear to have been nothing more than a vehicle for them to sell shares to the public.
Drugs
According to information available at:
hcso.tampa.fl.us
Esposito was arrested on April 3, 1996, and charged with trafficking in cocaine. He was found in
possession of 1 Kilo of cocaine, and was released on $50,000 bail. Raymond Carapella was arrested
on drug charges Nov. 21, 1998 in a raid of home that was being used for prostitution (St. Petersburg Times).
Pornography
Esposito and Carapella are both officers/directors of Connexxxions.com, a company which operates
an adult web site self-described as "adult material of an extreme nature". They also own Cybernet
Financial (uses Espositos address, Carapella registered the co.), which operates another adult web
site ( privatemoments.com CAUTION ADVISED, VERY EXPLICIT IMAGES). As you
scroll down that page, there are ads for both connexxxions.com and a hot link called "Want some
hot stock tips? Click Here". That link takes you to stocktopics.com, a stock tout site
that features various companies that Esposito and/or Carapella are involved with, typically as
"consultants".
Diet Pill Fraud
On July 13, 1990, according to an article in the St. Petersburg Times, Raymond Carapella
was arrested by the Hillsborough Sheriff's Office and charged with fraud in connection
with a fake diet pill scam that netted over $30 Million in profits. Ray and his brother George
(a consultant in ASCS) operated Overeaters Inc. which authorities said was selling diet pills
that were loaded with guar gum, a bulk laxative that has no weight-loss properties. The
company was also know as Richfield Pharmaceuticals Inc, and Fat Busters Inc. They ran
ads which claimed that people could "stuff" themselves and still lose weight.
Based on this article from the St. Petersburg Times, they also ran a company called Firm-X:
pqasb.pqarchiver.com
It appears they learned their "trade" from their father Raymond, who was charged and pleaded
guilty in Brooklyn, New York in 1974 with running 8 companies that were selling fraudulent weight-
reducing pills and two companies selling fraudulent bust-developing products. While not
100% confirmed that it is the same Raymond Carapella, it is verified that the Carapella family did
move from Brooklyn to Florida (in 1989), and that the father of Raymond, George, and Albert
was named Raymond.
from the Tampa Tribune, Nov. 2, 1997:
"RAYMOND LUKE CARAPELLA, 66, of Valrico died Thursday at Columbia Brandon Regional
Medical Center. A native of Brooklyn, N.Y., he moved to Valrico eight years ago. He was a
shoe repair shop owner and member of Nativity Catholic Church. He is survived by his wife,
Christa; three sons, George, Albert and Raymond Jr., all of Valrico."
There is no evidence that Robert Esposito was involved in the diet pill scam.
Internet Stock Tout Stocktopics.com
Stocktopics.com is a tout site that is registered to Robert Hainey, another associate of Robert
Esposito's. (Hainey was the beneficial owner of a British Columbia, Canada company called
Allmon Mangement, which was vended into Esposito's WLDI in 2000).
The Florida Corporations web site lists the registrant of stocktopics.com as Internet Marketing
Solutions, who's principal address is Esposito's Brandon, Florida address (710 Oakfield Drive,
Suite 202). Robert Hainey is its President, Raymond Carapella is Vice Pres. Internet Marketing
also distributes faxes to investors under the name "The Wall Street Alert"(WSA). Typically, the faxes
are sent out, which direct investors to the website for more info.
Featured companies inlcude TBX Resources (TBXR), Diamond International Group (DMDI) where
they rec'd 400,000 and 735,000 respectively.
More importantly, WSA/Stocktopics is used to promote Esposito/Carapella stocks in which these
individuals or related parties are insiders! The following examples will shed some light:
World-Am Communications (WLDI)
WLDI started life as a restaurant owned by Esposito and brothers Albert and Raymond
Carapella. By 1998, after a couple of incarnations, the restaurant closed, and the company
went dormant. It then jumped into the the cellular/pager market, via a purchase of a company
called Florida Wireless. One year later, it was again a shell with well over 100 million shares out.
In February, 2000, after a 1 for 4 reverse split, the company purchased Isotec, Inc., a manufacturer
of "Access Control Systems". Of the 30 million shares that were issued for this acquistion,
12 million went to Esposito-controlled W.C. Entertainment and Promotions. By the end
of 2000 the stock price had collapsed, and was reverse split again (on a 1 for 30 basis).
Despite the fact that Isotec appeared to have credible management with some expertise,
the company has generated limited revenues, and the share price lingers in the $.10 area.
An investor who might have invested $40,000 by purchasing 10,000 shares of World-Am in 1998
when it merged with Florida Wireless and paid $4.00 (symbol was WACI), would now have 83
shares of WLDI worth ~ $6.64. If they had bought 10,000 World-Am when it merged with
Isotec and paid $2.50 (symbol was WDLC), they would now own 333 shares worth ~ $26.60.
As well as the large share position held by Esposito, WSA/Stocktopics was paid 4 million shares
to promote the company (from web site disclaimer).
One of several mergers that was announced but not completed in 1999 was a deal to acquire
Cybernet Financial Inc., host to adult website privatemoments.com. This is particularly interesting
as Cybernet was registered by Raymond Carapella, and the company uses Esposito's address and
phone number for Administration and Billing.
Asconi Corporation (ASCS)
WSA/Stocktopics rec'd 25,000 shares and $5,000/month to promote ASCS. Raymonds' brother
George Carapella rec'd 400,000 shares as a consultant (ASCC filing 4.3 04/04/01 for Icara, Inc.).
Even stranger, the predecessor company to Asconi (Grand Slam Treasures) considered acquiring
Travelink Services, Inc. several months before the Asconi acquisition. The President of Travelink
is George Carapella.
Univercell Holdings, Inc.(UVCL)
They are currently promoting Univercell Holdings, Inc.(UVCL), formerly known as Hypermedia
Communications (NMNW). Esposito holds 35 million shares of UVCL as a result of a debt
settlement (paid equivalent of $.23). UVCL recently entered the cell phone rental business, via
its purchase of Univercell Global Phone Rental, Inc., but there are no mentions of that company in any
press releases, nor can corporate records be found, despite the press release which claims that it
has a meaningful segment of its industry. There is also no sign of an 8K filing regarding the acquistion,
so accordingly UVCL is technically nothing more than a shell until such filing appears.
WSA/Stocktopics is being paid 300,000 shares.
In the case of LQDX, WSA/Stocktopics rec'd 250,000 shares and $100,000. This does not include
the 2.3 million shares that Esposito rec'd for consulting.
There appears to be no logical reason for moving Advanced Fluid Systems Inc. from LIQD to
LQDX, other than to issue large amounts of shares to insiders. As a subsidiary of LIQD,
the company appeared to be worth approximately $1.5 million (market cap estimate based
on 15 million shares priced at $.10). It is now suddenly being valued at $90M!
Based on the consistantly poor peformance of shares of companies in the Esposito fold, the sketchy fundamentals of LQDX, and the previous legal issues surrounding Esposito/Carapella,
we suggest that the shares are significantly over-valued. |
