Mariah,
I took a look into PTRD and found some unsettling information. I posted what I found on the PTRD thread. I have more but here is a portion. With this firm being a bb issue I am steering clear of it and will not purchase. It could be good for a few points or more but not worth the risk for me.
Smiles and salutations. Nice to hear from you.
Bill
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Controversy follows well-traveled hype machine
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DON BAUDER
Union-Tribune Library researcher Beth Wood assisted with this column.
20-Dec-1998 Sunday
Stock of a former Carlsbad company has been soaring. Of course, it just announced a 25 for 1 reverse stock split, so its stock
should go up substantially. There are merely 188,135 free-trading shares of this stock on the Bulletin Board. It does not report its finances. It has also just adopted a name that is magic in this market: CARV.com. (I understand that a hotel charging $2 a night has just gone public under the name Flophouse.com, and the stock quadrupled the first day.) Just within the last year, CARV.com, which makes things like skateboards and sports clothing and markets such gear on the Internet, has had a couple of other monickers: Natural Born Carvers, its initial name, and CARVIndustries.
The company is also embroiled in an investigation. Its investment banker has been San Diego's perennial bad boys, Pacific Cortez Securities, nee La Jolla Capital. Earlier this month, the Department of Corporations, or DOC, asked the Superior Court to appoint a receiver at this firm, which has been disciplined numerous times by state and federal securities regulators. The DOC specifically charged that Troy Flowers, a broker at La JollaCapital, was also chairman of Natural Born Carvers, but that the brokerage's spielers touting the stock didn't relay that information to potential customers. Flowers is said to have raised $500,000 to $600,000 for CARV.com. But, as interviews reveal, little else seems to have happened at the Carlsbad company, which recently moved to Huntington Beach. The company apparently sent out news releases announcing acquisitions that had not been finalized. Products were heavily promoted but not produced. Essentially, the company was a hype machine -- just the thing for La Jolla Capital.
Natural Born Carvers, founded in 1996, had a line of surf wear. Last year, it became public through merger. Randall Lanham became president. Soon, it bought a maker of self-erecting tents. Then it bought Outcast, a designer of wet suits. "We pretty much entrusted them with our whole company," says North Countian Paul T. Roach, one of Outcast's founders. He and his co-founders were told they would get 100,000 shares of stock and monthly salaries; they didn't get the promised sums of either. "We took Outcast, told them we wanted to leave, but they pretty much told us they would sue us for everything they had put in the company," Roach says. So the founders walked. "It was all a big joke." In February of this year, Natural Born Carvers issued a press release stating that it had signed a letter of intent to buy Pure Juice inCarlsbad, a footwear maker that had $3.45 million in annual sales.
As news of the acquisition leaked, Natural's stock soared above $3, but there had been no such deal, says Joseph Ellis, founder of Pure Juice. "I had editors call me, and I said it did not happen," Ellis says. The stock drooped. Then on March 5, Natural Born Carvers announced that the purchase of Pure Juice had been finalized. The stock zoomed again. Ellis was even quoted in the second release, saying he was "very excited"about joining forces with Natural Born Carvers. Actually, Natural was just offering him an employment agreement, he says; he had not agreed to sell the company. Eventually, Ellis did join forces with the company. In fact, it moved into his headquarters in Carlsbad. Ellis says he had to go through with the deal because Pure Juice "ran out of money, had bank debt, and I was a
personalsignatory on the bank note."
Lanham, president, and Flowers, chairman, were occasionally at Natural's headquarters, say those who were there. For one stretch, there was a chief executive who lasted less than three months. The main person at the company, other than Ellis, was a sales representative, Dave S. Mc InTyre. He was there from early January until early October. "Their biggest thing was to get the deal on the Internet," says McIntyre. "It took seven months to finalize the Pure Juice deal even though they had sent out the news release." Mc Intyre, who has been interviewed by the DOC, says: "There were very little sales. They were sending out news releases on acquisitions. They were doing advertising and promos for the brands, but little was allocated to production. We had orders, but I couldn't fill them."
Money was coming in because La Jolla Capital was selling stock, say Mc
Intyre and Ellis. Any revenue from Pure Juice was supposed to beset aside for the bank; little money was coming in from other operations.
"They had fantasy figures: $5 million in sales this year, $7 million in sales," Ellis says. "Investors were being told this" -- even though he was warning that the company would not come close.
Natural Born Carvers made several more acquisition announcements that didn't reach fruition. Just recently, Frank Drechsler took it over and moved it to Huntington Beach. He will concentrate on Clockwork, another recent acquisition, and selling sports products on the Internet. "'We still have the tent company, we are reorganizing Pure Juice and I have decided to shelve Outcast." he says. Late Friday, CARV.com said it was firing Ellis, and the Pure Juice acquisition had been a mistake. "I have an Internet background," said Drechsler. "That's where we're moving the direction of the company."
Investors, and the DOC, will want to know one thing: Is there anything to this company? Should it really be named Air.com? Flowers would say little, although he claims he has not been active with the company for more than a year. Lanham did not respond to queries. Don Bauder's e-mail address is don.bauder@uniontrib.com |
