YOU'LL BURN FOR THIS ONE WINEHOUSE->DJ IN THE MONEY: GeneMax Latest Of Troubled ICI Ventures --
By Steven D. Jones and Carol S. Remond
A Dow Jones Newswires Column
BLAINE, Wash. (Dow Jones)--Retailers say volume is the key to profitability.
That motto also appears to be the strategy of a marketing and management company
called Investor Communications International Inc.
The privately held company made headlines recently when it took the unusual
step of filing lawsuits against Canadian and U.S. brokerages for improper short
selling of the stock of biotech GeneMax Corp. (GMXX).
But perhaps even more intriguing about Investor Communications, or ICI, as
it's commonly known, is the fact that the firm has large stakes in five U.S.
publicly traded companies, all of which share one common address in the small
town of Blaine, Wash., just one hour south of Vancouver.
The Blaine location, as it turns out, is quite convenient for ICI, given that
most people working with the firm appear to be British Columbia residents, some
of whom have had run-ins with securities regulators there.
ICI took a stake in GeneMax earlier this year and controls a large chunk of
the company's very few, and much in demand, free-trading shares.
A recent trip to 435 Martin St. here revealed a small office on the second
floor with just two secretaries. Although five companies in the ICI stable list
435 Martin St. as their address, the marketing firm is the only name on the
office.
Marcus Johnson, the ICI executive in charge, and the only ICI official with a
U.S. phone number, wasn't available and didn't return calls.
The sparse offices match the sparse value ICI's portfolio of companies has
generated for shareholders.
Mining companies Goldstate Corp. (GDSS) and Intergold Corp. (IGCO) both trade
for 2 cents a share today after a run in 1998 that carried Goldstate shares to
60 cents and Intergold to over $3. The companies had a joint venture to develop
Idaho claims that later proved worthless. Oil company, Hadro Resources Inc.
(HDRS) trades for 17 cents today, but fetched more than $2 a share this spring
based on an acquisition strategy that was later scaled back. Another oil
exploration firm, Vega-Atlantic Corp. (VATL), sells for 13 cents a share today
after reaching $4 in 2000.
Most recently, GeneMax, which began the year at 25 cents, topped $8 before
easing to about $6 a share over enthusiasm for a newly patented cancer therapy.
ICI consultant Grant Atkins also plays a key role in the firms. He serves as
president of both Hadro and Vega-Atlantic. He is listed as secretary treasurer
of Intergold and a director of GeneMax. The only company in which he doesn't
have a management spot is Goldstate Co., in which he does hold 300,000 shares of
stock.
ICI also holds major blocks of stock in the companies, including 6% of the
outstanding shares in Hadro, 9% of Vega-Atlantic and nearly 10% of GeneMax.
The portfolio of businesses generates little revenue and no profits. Hadro
Resources hasn't turned a profit for four years despite a booming oil market. In
total, the group has piled up more than $20 million in losses in the past three
years.
Regardless, each of the firms continues to spend heavily on services from ICI.
Services Rendered
In a June securities filing, Intergold said it would pay ICI up to $75,000 per
month for management and marketing services and its total outstanding bill was
$809,800. Hadro filings say it pays $10,000 per month and its outstanding ICI
bill is $478,400. GeneMax pays $10,000 per month and its bill totals $252,400.
The question is where does the money come from if not revenues?
The answer isn't apparent, but securities filings indicate ICI gains by taking
payment for most of its fees in stock, which it is then free to trade as its
marketing campaigns influence share prices.
In a recent interview, ICI consultant and GeneMax director Atkins said that
ICI wasn't trading its shares. He confirmed that ICI held options on 1 million
shares that could be exercised at any time, but he said that ICI had no
intention of doing so.
ICI is currently attempting to sell a 1 million share private placement in
GeneMax for $2.50 a share even though GeneMax stock is trading at about $6.43 a
share.
Gino Cicci, a consultant with ICI, and point man for selling GeneMax's private
placement, insisted that nobody at ICI or GeneMax is selling stock. "Nobody is
bleeding shares in the markets," Cicci said.
Asked to explain the recent high volume and share-price volatility in GeneMax
stock, Both Cicci and Atkins blamed "short sellers" and "market makers."
GeneMax recently filed a number of lawsuits against brokerages in Canada and
the U.S. for alleged manipulation and improper shorting of its stock.
But some people associated with ICI have been linked to manipulation, too.
As reported in a prior column, the British Columbia Securities Commission in
1995 banned Cicci from serving as an officer or director of a public company for
three years in connection with promotion of a company called DNI Holdings Inc.
in Canada.
Brent Pierce, a man that securities filings identify as the sole shareholder
and president of ICI also has had problems with securities regulators up north.
In 1993, the British Columbia Securities Commission prohibited Pierce from
serving as a corporate officer of a company in BC for 15 years. The ban was in
connection with Pierce's directing funds to his personal use from a public
offering of shares in Bu-Max Gold Corp. of Canada where he was a director.
The ruling also stipulated that Pierce couldn't serve as an officer or
director of a company "that provides management and administration, promotion or
consulting services" for the same number of years.
The same year the ban was imposed, Pierce incorporated a company called
Amero-Can Marketing Inc. at 435 Martin St. in Blaine and listed himself as
president and owner of the business. Pierce's name doesn't appear again in
filings until 2000 when separate filings by Intergold and Vega-Atlantic both
list him as the owner and president of ICI as well.
By Steven D. Jones and Carol S. Remond, Dow Jones Newswires; 360.253.5400
(END) DOW JONES NEWS 10-11-02
03:08 PM- - 03 08 PM EDT 10-11-02 |
