FYI, my letter to the SEC:
To Whom it may concern:
I am writing to request an investigation of Firamada, Inc (OTC:BB
FAMH). Over a seven month period from October 1997 to April 1998,
and again briefly in May of 1998 my investment club was a shareholder in this company. Based solely upon the company press releases and conference calls I believe there is sufficient evidence to prove that the company has intentionally provided false information to investors. Although I realize that posts from internet stock forums are not necessarily "proof" of anything, I have provided a few links to some posts on Silicon Investor. I only include these because I believe they give a fuller picture of what was happening but my case does not depend upon them.
"NEW YORK, March 3 /PRNewswire/ -- Firamada Inc. (OTC Bulletin Board: FAMH) announced today the audited financials for 1997 are complete. Within a fewdays this documentation will be released to the public concurrently with thefiling of form SB-2 with the SEC in order to take the initial steps to beclassified as a reporting company. Firamada is pleased to report to its shareholders the final audited EPS for 1997 is $.1085 per share...."
This press release clearly states an audited EPS for 1997 of .1085. Notice the promise to submit the financials to the SEC "Within a few days". Obviously this never happened. Although the audited financials were supposedly complete we were put off again and again for various reasons and the odd statement kept being made that when we finally did see the numbers on Edgar that the EPS would be better than expected for 1997. Throughout this time the share count was slowly increasing from the 20MM outstanding shares used to calculate the 1997 EPS.
On Friday, May 1st, 1998, the company held a conference call and Ira Monas, President of FAMH, stated the following:
1) 1997 EPS should be greater than expected, probably around $0.11.
2) Financials were being submitted to Edgar that afternoon.
On Monday, May 4, 1998, I called the company and spoke with Robert (FAMH's IR representative) and was told that the financials has gone out to Edgar and would appear as soon as Edgar finished entering the financials into the system. I was also told that the shares outstanding had been increased to 53MM. Other investors on SI called the company and received the same information. Others also called Edgar and were told that no filings from Firamada has been received:
Message 4314716
Message 4318427
Message 4318615
Message 4320297
(Bottom of post quoting Ira as saying the financials were in Edgar's hands)
In a conference call on Thursday, May 7, 1998, Ira Monas stated that although Edgar was taking a long time to post the financials that Firamada would issue a press release containing the financials the following day, Friday, May 8. Although something vaguely resembling a balance sheet was released the following day in a press release, it carefully ommitted the section which showed the number of shares outstanding. (See the FAMH May 8 press release).
On May 11, a representative of the StockGuide newsletter posted to SI that he had been told by the SEC that FAMH had never submitted anything to the SEC. (I'm assuming you can verify if you ever received anything from Firamada Inc. :-) ).
Message 4409986
In a conference call on Thursday, May 21, 1998, Arif Adam (CEO) announced that the current outstanding shares of FAMH was 70MM, of which approx 40MM was restricted (and of which he owned most of those), and again reiterated that the final 1997 EPS would be better than the stated "audited 1997 EPS". He also stated that the financials would appear on Edgar by Friday, May 29, 1998.
In a press release dated May 22, 1998, Firamada announced the appointment of a new accounting firm.
In a conference call on Thursday, May 28, 1998, Arif Adam and Mr. Corso (representing the new accounting firm) announced that the 1997 financials were being reaudited and that they would be completed in a minimum of two weeks.
Thank you for your consideration of these issues. I look forward to your reply. You may contact me at any time should you require further information.
Sincerely,
John Fairbanks
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