Edgetech Services, Inc Friday, August 8, 2003.
Feature Company
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Edgetech Services, Inc.
OTC- BULLETIN BOARD SYMBOL EDGH
Corporate Headquarters:
18 Wynford Drive, Suite 615
Toronto, Ontario, M3C 3S2
416 441-4046
tkim@edgetechservices.com.
The Ones Responsible
Officers and Directors and Significant Players
Tae Ho Kim
Sang Ho Kim
Kenneth Rothwell
Theodore Roxford
Huge Hollingsworth
SEC FILINGS
Some Basic Facts - as of the April 30, 2003 10K Annual Statement
Shares outstanding (common) - 32,517,000
Total Assets April 30, 2003 - $625,687
Total Liabilities - $537,965
Revenues for 12 months ending 4/30/03- $1,420,006
Total Net Loss for 12 months ended 4/30/03 - $556,094
Accumulated Deficit - $677,397
Stock price when published $.50
Market capitalization $16,258,500
"Letter of Offer" proposed value - $29,265,300
Date Filed: August 1, 2003
Filed with: SEC
Known actions to date - None
NOTE - 6 August, 2003: In order to have our complaint consistent with EdgeTech's form 8K we have changed the wording on our complaint from a "tender offer" to a "takeover offer". Further, we want to refer all readers to the following article from the SEC regarding the expanded ability of companies to communicate potential takeover or tender offers to their security holders. Although this expanded view by the SEC does allow for companies to announce offers prior to the filing of a formal takeover offer, it does require that the company file such communication with the SEC prior to releasing it to the public and that it contain the proper disclaimers. The SEC also is very specific in emphasizing that parties to such communication are subject to Section 10b of the Exchange Act (this is the section which deals with the fraudulent manipulation of the market). By virtue of the fact that EdgeTech did not file their communication in compliance with the exemption and since this "Letter of Offer" was described as an "offer" and not an "intent to offer" or any other less concrete form of communication, we still believe that the offer submitted by HRR was not compliant in form or substance with either the letter or the intent of the law and based upon its hyperbole, we likewise still believe it represents a clear violation of Section 10b of the Exchange Act. You can read the complete statement by the SEC here.
NOTE - 6 August, 2003: We sent an e-mail to Hollingsworth, Rothwell and Roxford in order to inform them of our complaint and our concerns and to assure that they knew we were authentic in our offer to publish their reply. Well, they have replied and, true to our word, we have published our letter and their reply in its entirety. Sadly, but not surprisingly, they did not answer any of our concerns. They did not address the fact that their offer was not in compliance with Section 14 or Section 13D of the Exchange Act.
Neither did they address our concern regarding their ability to close the transaction should they approve of the financials (this is the show me the money part) and they did not provide any information regarding their identity. Simply put, they just didn't address at all our claim or even recognize, for that matter, that making a non-compliant or unsubstantiated takeover offer is against the law. They did, however make unfounded and unsubstantiated allegations against Our-Street.com. Herewith, contrary to their assumptions, we publish our letter and their responses in unedited fashion. We have only taken the liberty to add a few relevant comments rather than add a full response below.
We would like to add that we have received a third letter from these characters but since it contains only lies and completely false accusations against us and does not address the issues at hand we have chosen not to publish it in order to prevent a libelous situation. We will, however forward the letter to the SEC along with the others.
We have just received a fourth letter from HRR and this one states that they never made a tender offer. Please read their responses as they give great insight into their character. Further, since EdgeTech has chosen to call HRR's offer a "takeover offer" and in an attempt to clear up any controversy and to have our complaint be more consistent with the EdgeTech position, we have changed the wording of our complaint from "tender offer" to "takeover offer".
NOTE - 6 AUGUST, 2003: From our "It all depends upon what the meaning of the word "is" is department: Regarding the subject of tender/takeover offers, we believe that the HRR's offer constitutes an illegal offer be it a takeover offer or a tender offer or just an offer because it did not comply in form or substance with the rules as defined by the SEC for takeover offers. Since we cannot find a section of either the Securities or Exchange Act which deals with emailed and subsequently published official "Letter of Offer's" which is at the same time an offer to purchase at a specific price, a highly promotional statement filled with hyperbole and materially false and/or misleading statements, and an attempt by the author to solicit additional investments yet is not in compliance as regards to any disclaimers or disclosure in the spirit of SEC regulations. Further we note that the offer was not filed with the SEC prior to publication as required. We believe the HRR's offer is indeed a takeover offer and only lacks the full characteristics of a takeover offer by virtue of its illegality and not because it falls under a different section of the SEC rules and regulations. We further believe that the most relevant section of SEC rules which apply to this offer and the manner in which it was constructed and published is Section 10b of the Exchange Act which deals with the manipulation of markets. Further, EdgeTech considers the HRR email a "takeover offer" based upon the form 8K they filed today. If we are incorrect in regards to calling this a takeover when the company itself is calling it a takeover offer, we apologize and request the SEC simply address this as an illegal offer of some kind and a blatant attempt to manipulate the market in direct violation of Section 10b of the Exchange Act.
THE SEC COMPLAINT
SUMMARY
BELOW IS A SUMMARY REPORT. TO READ THE ACTUAL COMPLAINT CLICK ON IT.
We usually take a couple of weeks to compile, prepare and publish our reports and our complaints but every now and then, something so egregious and so offensive presents itself and just screams for us to act and act quickly. The Edgetech announcement of July 31, 2003 is just such an event and we are compelled to go to whatever lengths are necessary to alert the investing public and the SEC of this incredible scam.
Prior to the market opening July 31, 2003, Edgetech issued a press release with the headlines screaming "EdgeTech Receives Unsolicited Purchase Offer at $1.00/Share". Headlines
The statement goes on to describe the receipt of a $1 per share stock offer from a person or group calling himself/themselves Hollingsworth, Rothwell & Roxford out of Melbourne, Florida. After praising the company in the style of a stock promoter in their so called "Letter of Offer" they go on to clearly state their specific objective which is to enhance shareholder value like they did in a previous scheme. In other words, they want their offer to make the stock go up. We believe this is basically a written and published confession to a Section 10b-5 violation.
Kenneth Rothwell, the name used by the person signing the "Letter of Offer" goes on to take credit for the increase in Zapata's stock since the first of the year, the result of several offers they claim to have made for Zapata's stock.
So, aside from admitting that their objective is not so much to acquire the company as it is to pump up the value of the stock, (after all, they never did end up acquiring any of Zapata's shares with their offer) what else is wrong with this offer?
Well, let's start with the fact that this offer doesn't even come close to complying with the SEC's requirements for takeover offers. Section 14 of the Exchange is very specific about the exact method for making an offer if it involved more than 5% of the issued and outstanding stock. These mysterious individual(s) were offering to purchase 90% of the issued and outstanding stock. Now, technically, it wasn't a takeover offer in that it didn't comply with all the various filing requirements. Still, EdgeTech is calling it a takeover offer and the offer was very specific as to price. It's not like they notified Edgetech that they were considering making a takeover offer and since Edgetech had decided to call it a takeover offer, then we don't know what else to call it. Actually it is a combination takeover offer, stock promotional piece and solicitation for investors, all rolled into one. Regardless, of whether the SEC will consider this a takeover offer, a takeover offer or simply a very illegal promotional piece, we feel it does not comply with SEC regulations and violates
Takeover offers require a lot of disclosure about who is making the offer and specifically how the offer will be undertaken. Suffice it to say, one cannot simply fax and email a company with an offer to purchase 90% of their shares for 700% of market price without anything more than a name and an address and expect to have it taken seriously.
And speaking of addresses, Hollingsworth, Rothwell & Roxford's address is
7777 N. Wickham Rd. #12-135
Melbourne, Florida, 32940
This isn't an office, this is nothing more than a UPS Store (formerly Mail
Boxes Etc) mail drop. (Their phone number is a residential phone
number for a home in Palm Bay, Florida.)
So, without looking any further, we have an illegal takeover offer which violates just about every aspect of Section 14 of the Exchange Act. But, like with Ginsu knives, we want you to wait because, there's more! In the "Letter of Offer" there are three basic conditions. One is that they get a look at Edgetech's books, a rather innocuous sounding request indeed. Another is that management remain but they glossed up this condition worse than a French hooker with all kinds of promotional praise. Then there is the last request, which, in our opinion, is further evidence of these scam artists' intentions. They make it a condition of the offer that Edgetech publish their entire "Letter of Offer" and that it be published both in the entire US and Canada. Of course, along with some lies about their previous successes, there is a handy solicitation for anyone stupid enough to not see right through this scam. Suckers who respond will probably be given the opportunity to have their money taken from them as well. Of course, they worded it so it would sound like they wanted true partners to invest with them but, in our opinion, the solicitation is nothing more than chumming the waters and looking for suckers to "buy their way into the partnership" while working this manipulation attempt.
Of course, HR&R needed a willing partner at Edgetech for their scam to work and they found one in Tae and Sang Kim. We inquired of Edgetech as to the level of due diligence they had conducted into HR&R's principals both as to their character and their financial ability prior to publishing this so called "Letter of Offer". They replied, that they had just begun their due diligence process. They went on to say that they will always disclose "serious events", referring to this "Letter of Offer". How they can call an unsubstantiated offer from people you don't know at all that is absolutely not in compliance with any SEC guidelines in either form or substance a "serious event" is beyond us. We think Kim should have immediately contacted the enforcement division at the SEC and reported these crooks instead of using the opportunity to hype his stock. Can anyone guess why Kim might have chosen to put out the press release instead?
And while we are on the subject of Kim's complicity in this whole event, we are not going to let him get by with claiming ignorance should that be his next move. Kim clearly stated in the headlines and body of his press release that this offer was unsolicited. In a phone conversation yesterday with one of our supporters, Mr. Kim admitted to having been in conversation with people at HR&R for some time prior to receiving the offer and it was he who suggested that they put their offer in writing and submit it to him for his review. Now, that, kind readers, is a solicitation in case you had any doubts.
Further to the point, Theodore Roxford has likewise admitted to being close to both Kim's and has acknowledged that the Kim boys are profiting off the offer and have conceived, along with Roxford, a plan that includes and extends beyond the offer. Our conclusion, Kim certainly isn't stupid, but he most certainly is a LIAR! Add to that the fact that Mr. Kim and the other Mr. Kim along with one of his directors each registered 300,000 shares for sale within the last three weeks and you get a pretty ugly picture. How big a roll the "Kinky Kims" played in this whole scheme is not entirely clear at this point but a closer look at the transactions of the Kim's and others surrounding EDGH will most certainly answer a lot of questions about just how deep they are in this scam. One thing we know for a certainty. Both Kim and Roxford admit to a relationship preceding the offer. Roxford even goes so far as to call their relationship "close".
We also know that Edgetech is inclined to pumping their stock as they previously announced their affiliation with ICI, that group from Blaine, Washington who, along with their Canadian pal promoters, have been some of the most outspoken proponents of the "custody only" trading scheme. Of course Edgetech subsequently threw their hat in that ring while claiming to be innocent and unwitting victims of naked shortsellers.
For those that don't know, ICI was the initial promoter for this custody only movement and is responsible, in part, for the millions of investor dollars which have been lost in GMXX to name but one of their ICI led custody only schemes. GMXX (Genemax) was basically "ground zero" for the movement and, as such, attracted a veritable who's-who of pump and dump artists including one of our previously featured bad guys, James Dale Davidson himself.
As a result, Kim and Edgetech have already pumped their stock to over $1 once only to see is fall back to previous trading levels and, of course, they blamed the short sellers when their stock couldn't sustain a 90 day stock move from $.11 to $1.12. Call me stupid but don't you think the 2,800,000 shares Kim gave out in an S8 registration simultaneous to the pump beginning in December 2002 had something to do with both the rise and the fall? We do! As to the 3 million additional they gave out in May, well, that would be anyone's guess.
We find it a little more than curious that this keeps happening to companies involved with ICI, and the boys from Blaine yet it always is the short sellers who get blamed. How convenient indeed! In the 20 years we have been involved in this industry, the pump and dump artists have always blamed the short sellers to mask their activities. Well, one thing is most certain here. The short sellers didn't put this bogus scam offer together but logic dictates that they are taking advantage of it.
Finally, let's look at the history of whoever this Hugh Hollingsworth, Kenneth Rothwell and Theodore Roxford is or are. Finding much on all of them is a quite difficult. In truth, Theodore Roxford is the only person we could find any information on at all. It is almost as if Kenneth Rothwell and Hugh Hollingsworth don't even exist. Hmmmm.. it makes us wonder indeed. Like Clark Kent and Superman, has anyone seen Roxford and any of his partners in the same room together?
But Theodore Roxford (aka Lawrence David Niren and aka: Theodore Vakil) does exist and he has a past. His past, by the way, is more than enough reason to give a responsible, honest and ethical corporate executive reason to report them to the SEC and to not report the offer in the form of a press release. First, we can look at a couple of mainstream media articles about this grifter, Roxford. In March 2003, the New York Times referred to him as a "self-described corporate con artist".
After his "offers" to buy or to have Sony split up their company were dismissed without much, if any, consideration, Roxford decided to sue Sony. You can see by the court dockets that Roxford has decided to go this one alone and represent himself (PRO SE) in court against this mega corporation and its bank of attorneys. And while we are at it, Roxford claimed in his announcement that he was suing for $15.1 Billion but as you can plainly see from the filings with Florida, the suit clearly is for $15 million. What is that about? Did we forget how many zeros are in a billion or is this just another lie?
After Sony blew him off, he attempted a similar approach with Zapata, (NYSE: ZAP) and, although he initially got their attention, they soon followed Sony's suit and blew him off as well.
Of course this character will try anything to get attention and to make a buck and his supposed deal with Ameritech and his subsequent Ameritech suit was equally as embarrassing and pitiful.
We demand that if these guys want to play high profile M&A games with the big boys (or even in the minor leagues like the Bulletin Board) that Theodore, Kenneth and Huge stand up and be counted. If you are going to send e-mails and conspire with companies then declare an interest in buying them, you better come forth and not only follow the SEC rules about compliance and disclosure, you damn well better provide the investing public and the shareholders all the information they deserve and not use a cheap blind drop box address and a residential phone while trying to portray yourself as some kind of serious player. We demand a history on all of you guys (if there actually is more than one person playing all the parts in HRR) and, we demand to know where the thirty million is you plan to use to pay for your offer.
For now, we hope the SEC will take this bogus offer you made as seriously as we do and invite you produce that information by way of a subpoena.
IN OUR PROFESSIONAL OPINION, THIS OFFER IS NOTHING BUT A BLATANT AND CRIMINAL ATTEMPT TO MANIPULATE EDGETECH STOCK TO BENEFIT THE KIM'S AND OTHER PERSONS KNOWN AND UNKNOWN AND TO FURTHER THEIR PLAN TO SOLICIT OTHERS TO JOIN WITH THEM IN THEIR SCHEME AND PROFIT BY TRADING IN TARGET COMPANY STOCKS PRIOR TO MAKING AN OFFER.
THE STATEMENTS AND CONDITIONS CONTAINED WITHIN THE "LETTER OF OFFER" FURTHER SUBSTANTIATE OUR BELIEF THAT THIS IS A FRAUDULENT OFFER AND THAT, BASED UPON THIS OFFER AND BASED UPON PREVIOUS RELEASES BY HRR, WE BELIEVE THAT HRR IS AN ONGOING CRIMINAL ENTERPRISE AND SHOULD BE DEALT WITH ACCORDINGLY.
WE FURTHER BELIEVE THAT EDGETECH VIOLATED RULE 10b-5 OF THE EXCHANGE ACT BY KNOWINGLY PUBLISHING AN ILLEGAL OFFER WITHOUT PERFORMING EVEN BASIC DUE DILIGENCE AND FURTHER MISLED THE MARKET BY CLAIMING THE OFFER WAS UNSOLICITED WHEN STATEMENTS BY THE PRINCIPALS OF THE COMPANY AND MEMBERS OF HRR ACKNOWLEDGE COMPLICITY IN THE PROCESS. WE ARE ALSO CONCERNED THAT, BASED UPON THE UNUSUAL TIMING OF SOME 144 REGISTRATIONS AND BY STATEMENTS BY ROXFORD, THAT THE KIM BOY'S INVOLVEMENT IN THIS MAY EXTEND TO ILLEGAL GAIN IN ADDITION TO UNDISCLOSED PARTICIPATION. (ALSO, WHY DID FRANCIS BISCAN REGISTER TO SELL 100,000 SHARES AT $1.05 A SHARE 8 DAYS PRIOR TO THE OFFER AND WHAT DOES HE KNOW THAT WE DON'T? PS. BISCAN IS THE DEAL GUY WHO HELPED ENGINEER THE EDGETECH ACQUISITION.)
FURTHER, IF KIM AND KIM ACCEPT THE HRR OFFER IN ITS CURRENT FORM WITHOUT DEMANDING THAT HRR STRICTLY COMPLY WITH ALL SECTION 14 AND SECTION 13D FILING AND DISCLOSURE REQUIREMENTS, WE BELIEVE IT WILL BE FURTHER PROOF THAT THEY ARE A MATERIAL PARTICIPANT IN THIS SCHEME AND ARE SIMPLY ATTEMPTING TO EXTEND THE PUMP. WE, OF COURSE WILL AMEND OUR COMPLAINT ACCORDINGLY AND RESUBMIT IT TO THE SEC.
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As always, we will gladly provide a space for any documented and verifiable comments by the company and will promptly and sincerely apologize for any errors in our facts. Our commitment is to bring forth the truth and the facts in the matter and we encourage EdgeTech Services, Inc. and Hollingsworth, Rothwell and Roxford to produce whatever documents they can to clear up our concerns and the concerns of what we assume are many EdgeTech shareholders.
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This space reserved for documented biographical information on Mr. Hollingsworth, Rothwell & Roxford should anyone find anything and submit it or should he/they decide to submit it.
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