To All:
We have been following with interest various comments pertaining
to NVID International and its wholly-owned subsidiary, Aqua Bio
Technologies.
Last December we had some interest in possibly investing substantial
sums in this company. However, we were unable to obtain information
of any substance about the company, it's principals or its products.
Mr. Bunte, Mr. Klenovic, their various P.R. firms and market makers
could not or would not respond to what should have been routine
questions. The responses we got were conflicting or totally lacked
substance. Their self-serving press releases established little
credibility and, in fact, much of the time bordered on humorous.
Therefore, we conducted our own research.
We would not normally investigate a company to this degree. However,
in this case the more we investigated, the more curious we became,
particularly in view of the ongoing publicity given to the rise in
small stock schemes, as most recently detailed on the front page of
the Money & Investing section of the October 14 issue of The Wall
Street Journal. Following are some of our findings:
1) Electronic copper/silver ionization for water purification is not
a new process. There are other established companies who have been
manufacturing and marketing these products since the late 1980s.
In fact, it appears Aqua Bio Technologies may be infringing some
existing patents pertaining to this process.
2) Network Video, Inc. was incorporated in Delaware on Aug. 20, 1984.
The company, whose intended business was licensing specialty video
stores, raised significant capital through a public offering. The
venture apparently failed and the company ceased operations in 1988.
It had no operations from 1988 until 1994, but maintained the shell
corporation which reported negative retained earnings of ($1,106,441)
at May 31, 1994.
3) Aqua Bio Technologies, Inc. prior to mid-1996, operated as
Superior Aqua Products, Inc. Superior Aqua Products, Inc. was formed
in 1993 and was a distributor for electronic ionization systems
purchased from an unrelated supplier.
4) On November 14, 1994, Network Video, Inc. acquired 92% of Superior
Aqua Products, Inc. for 18,281,500 shares of its common stock,
according to Moody's OTC Industrial Manual. During mid-1996, Superior
Aqua Products' name was changed to Aqua Bio Technologies, Inc.
5) On May 26, 1995, Network Video, Inc. filed a Certificate of
Amendment with the Sectretary of State, state of Delaware, changing
its name to NVID International, Inc.
6) On March 1, 1996, Delaware's Secretary of State certified that
NVID International, Inc. is no longer in existence and good standing
under the laws of the state of Delaware, having become inoperative and
void for nonpayment of taxes. The Secretary of State further certified
that NVID was so proclaimed in accordance with the provisions of
General Corporation Law of the state of Delaware on May 30, 1996,
having been reported to the Governor as having neglected or refused to
pay their annual taxes.
7) NVID International, Inc.'s only source of revenue is from its
wholly-owned subsidiary, Aqua Bio Technologies. Gross sales for years
ended December 31, 1993, '94 and '95 for Superior Aqua/Aqua Bio
Technologies were $405,000, $402,000 and $176,000, respectively. The
company posted negative retained earnings of ($694,000) for the three
years ended December 31, 1995, on total sales for the period of
$983,000. Neither NVID nor Aqua Bio Technologies have any tangible
assets.
8) According to Moody's OTC Indsutrial Manual, there were 292
stockholders as of May 31, 1996.
9) In November 1995, NVID/Aqua Bio Technologies forecast revenue of
$3.1 million and income of $412,000 for the 12 months ending December
31, 1996. We have been unable to establish revenue or estimated
revenue year-to-date. We have tried Mr. Bunte, Mr. Klenovic,
Mr. Arata, their P.R. firm, their attorney and their accountant all to
no avial. From all we've been able to determine, it appears gross
sales will be less than $200,000 -- considerably short of their
$3.1 million projection made just one year ago.
10) NVID/Aqua Bio Technologies employs fewer than ten individuals,
including:
Robert Bunte - President, C.E.O., Director NVID. Bunte held various
accounting-related positions with various companies and private
accounting practices since 1969. He reportedly held positions of
Treasurer, Secretary and President of Network Video/NVID since
inception in the early 1980s. Since the failed Network Video venture,
Bunte reportedly functioned as a private CPA and in marketing and
sales capacities.
Matthew Klenovic - Secretary, Treasurer, Director NVID; President
Superior Aqua Products/Executive Vice President Aqua Bio Technologies
1993 to present. Klenovic has served with numerous companies in
various accounting and finance positions. From in or about December
1988 through in or about April 1991, Klenovic held various offices
including, among others, President and Chief Financial Officer of
Standard Oil and Exploration of Delaware, Inc. (STDO). The United
States Securities and Exchange Commission instituted a compaint
June 6, 1994, in the U.S. District for the Middle District of Florida,
Tampa Division, civil action #94-909-CIV-T-23A against Klenovic for
permanent injunction, civil penalties and other equitable relief. The
S.E.C.'s allegations include, but are not necessarily limited to:
a. Klenovic's misappropriation of investor funds.
b. Klenovic's selling of unregistered stock.
c. Klenovic's failure to file disclosure documents of his stock
holdings required by commission regulation.
d. Klenovic's resposibility for Standard Oil and Exploration of
Delaware, Inc.'s false and misleading public disclosure documents.
The S.E.C. anticipates a settlement prior to year's end or the trial
to take place during first quarter 1997.
Klenovic filed personal voluntary bankruptcy petition under chapter 7,
July 29, 1993; case no. 93-08112-8G7 in the Flroida District, Tampa
office.
Andrew Arata - Vice President of Technical Services Aqua Bio
Technologies. A self-proclaimed electrical/chemical engineer with no
legitimate credentials, formal education or training in the fields.
During 1987 through 1990, he was employed by another ionization
manufacturer as a service technician. Arata was terminated November
1990 for cause. He was reportedly employed at various times in the
construction industry during 1991 through 1994 prior to joining
Superior Aqua Products/Aqua Bio Technologies. Arata is a convicted
felon sentenced to two years in a state correctional facility. He
served one full year at Columbia Correctional Facility, Lakeland,
Florida.
Thomas Pluto - Director NVID International, President Aqua Bio
Technologies. Pluto was a distibutor for electronic ionization
equipment from 1989 to 1993. During the period 1975 to 1989, Pluto
was in the real estate business. Pluto filed personal voluntary
bankruptcy petition under chapter 7, September 11, 1991; case no.
91-11609-8B7 in the Florida District, Tampa office.
It should be noted the aforementioned individuals' titles may not be
entirely accurate as they change dependant upon the document being
viewed or individual questioned, i.e. sometimes Matthew Klenovic is
President, and other times he is Executive Vice President and
Thomas Pluto is President, etc.
11) We are unable to locate any legitimate users of Aqua Bio
Technologies products, causing us to speculate regarding the existence
of a product. Our ramdom check of more than twenty of their references
revealed that Aqua Bio Technologies and NVID International were unknown.
Although many were users of the electronic copper/silver ionization
process, they were systems developed and produced by others. One
reference that attempted to establish authenticity was a Diana Korpal,
Infection Control Practitioner for Methodist Hospital of Indianapolis.
However, Ms. Korpal's credibility diminished and her comments became
suspect when it was learned that she is a compensated consultant for
NVID/Aqua Bio Technologies. It is interesting to note also that a
Douglas Webb, M.D., who is associated with the infectious diseases
division of Methodist Hospital, is, according to Matthew Klenovic, on
the Board of Directors of NVID International.
12) Although NVID/Aqua Bio Technologies is continually sighting an
ever increasing distributor network to include Arizona, Montana,
Wyoming, Idaho, Washington, Illinois, Mexico, Venezuela, California
and others, we were able to substantiate only two. One was Aqua Bio
Phoenix, who reportedly terminated the relationship in less than three
months. The other, Aqua Bio System Chicago, is a suburban police
officer who apparently is attempting to generate interest in his off
time.
13) We are unable to comment regarding NVID's chemical products
reportedly in the research and development stages other than to submit
that they too appear highly suspect. The only information pertaining
to these products are again NVID's self-serving press announcements.
There is nothing to substantiate that these products are real, offer
potential beyond existing products or are marketable at any time in
the foreseeable future.
Although our investigation revealed other interesting information,
to go on is pointless. We think the conclusions are obvious. One
need not go far beyond the experience, credentials and history of the
two key individuals in this scenario; Bunte and Klenovic. They both
have:
a) Accounting and finance backgrounds with experience in fund-
raising for, it appears, questionable speculative ventures.
b) In-depth knowledge of S.E.C. regulations, workings of the small
cap market, public offerings, reverse mergers, etc.
c) Headed other failed ventures after raising substantial capital.
d) Not managed a successful business endeavor.
e) Disproportionate share holdings of Bunte and Klenovic.
In addition, the S.E.C. allegations pending against Kelnovic should
cause one to run, not walk, from this investment opportunity.
However, if more reason is needed, to the equation can be added the
supporting individuals Pluto and Arata, and their less than enviable
business accomplishments, personal financial difficulties and, in the
case of Arata, criminal record. |
