Did you know that a few promoters that are behind IDCN were and still are behind NUKE. Ask the big PRES Jeffrey. If he says no he's full of it!
stockdetective.com
June 22, 1998
Rhombic Corp. (OTCBB: NUKE)
6/22//98 close: $0.94
Making Of A Meltdown
by Lynn N. Duke, staff writer
Rhombic Corporation makes some bold predictions
based on unproven technology and overstated contracts.
Imagine a company that owns separate technologies it claims can 1) fuse the atom, 2) make the silicon chip obsolete, and 3) split the atom and harness the power for "real world" applications. Now imagine that you've stumbled on this stock when it's trading around $2, maybe less. Nirvana? Guess again.
More likely you're caught in the squeeze of a stock that's hyped itself up from a mere $0.14 in February to almost $2 last month. Apparently, that wasn't high enough. After peaking at $1.75 in early May, the stock stumbled, but appears to be building a fresh climb fueled mainly by persistent rumors of a pending announcement from Daimler Benz Aerospace.
Rhombic Corp. (OTCBB: NUKE), based in Vancouver, B.C., has lured investors with promises of infinite wealth based on three technologies: Inertial Electrostatic Confinement, diamond film forced diffusion and the nuclear battery. Now no one disputes whether these technologies exist. But the claims Rhombic makes about its ability to make them commercially viable have the half-life of a cold beer at a soccer match. And that puts the company's financial predictions on shaky ground.
"I would say this is more marketing than science," said John Parkinson, chief technologist at Ernst & Young management consulting group. "All of these areas are fairly edge of the envelope. It looks like they're claiming more capabilities than are warranted."
Even more daunting to investors is the lack of financial information available on the company. A Rhombic spokesman and promoter said audited financials will be available in mid-August, when the company submits its initial filing to the U.S. Securities and Exchange Commission. So it's not clear how Rhombic will fund its grand plans, which include a plant for its diamond film forced diffusion process and, first, developing a prototype of models for its applications.
There are 14 million shares of Rhombic stock outstanding, according to Mike Skerry, head of Pacific Bay Financial Corp., a Vancouver-based money matchmaker that has been promoting Rhombic for several years. Of those 14 million shares, about 3.6 million are in the float and the rest are held in restricted control blocks, Skerry said. The company is supposed to be closing within the next week on a $200,000 private placement it earlier had announced would by closed by June 7. Rhombic is also working on another private placement that could raise up to $2 million, Skerry said.
In search of a wider audience, Rhombic recently paid 300,000 free-trading shares - almost 10 percent of the float -- for a feature in Market-Pulse Journal, a stock promotion magazine and Internet site. There's already coverage of Rhombic on Market-Pulse's website. The print edition will be out July 15.
Besides the private placements, Rhombic is counting, to some extent, on royalties from a licensing agreement it has with Daimler Benz Aerospace to produce and market its Inertial Electrostatic Confinement technology. According to its website, Rhombic estimates it will earn $5 million in 1998 from royalties. John Sved, the project manager for Daimler Benz's FusionStar program (its soon-to-be-trademarked name for IEC) in Trauen, Germany, disagrees.
"That's not likely," Sved said. "They're inclined to exaggerate things. We're on a growth curve of development, and we're on a growth curve of market entry."
Sved also debunked any notion of an imminent press release regarding the technology. "They appear to be pumping things up," Sved said. "The only fresh thing for public consumption is a revised brochure. Any press release from us is fiction at this time. They don't need one, they've got one," he said referring to an August 1996 press release announcing the licensing agreement.
And there's still the issue of whether all of Rhombic's technological claims are valid and cast in a reasonable time frame.
Diamonds and Rust
Rhombic's most immediate hope for success is Inertial Electrostatic Confinement, which in its practical application is a good source of free neutrons and is a good tool for fusion research, but does not produce controlled fusion (as Rhombic claims), Parkinson said. Several research labs around the country have been building (small ones can be built for as little as $50,000) and using them in the past four years. But IEC is still an experimental technology, Parkinson said. "No one is going to create a whole new energy industry out of state-of-the-art IEC," Parkinson said.
Similarly, diamond diffusion technology is also in its infancy and yet to be proven commercially viable. "It's completely overblown. Nothing is being done that comes close to what can be done with silicon. It will be two to five years from now before anyone is producing anything commercially viable," said Parkinson, whose responsibility it is to evaluate emerging technologies for Ernst & Young clients. "That technology is real, but using it for semiconductors outside of university research labs has not been demonstrated." Rhombic is predicting almost $10 million in revenues from this venture in 1998, even though it's not even in production and the year's half gone.
Finally there's the nuclear battery. Rhombic claims "it has acquired the nuclear battery technology for the aerospace industry...The nuclear battery, owned 100% by Rhombic corporation...." This would lead many to believe that the company has exclusive rights to some gangbusters new energy source.
First of all, there is no such thing as a "nuclear battery", although stored nuclear power has been used by NASA for more than 20 years, Parkinson said. And the technology behind this really can't be patented, since it's the laws of nature that run these machines and you can't patent Mother Nature. But there are other complications. Since most of these devices use plutonium, although Rhombic claims it will use less volatile substances, production and handling is tightly regulated by the government.
Non-Parallel Lines
Several other items cloud Rhombic's agenda. Not content with its brood of cutting edge technologies, Rhombic recently announced that it is moving into the information technology field as well. First there's Active Engine, a new brand of software that Rhombic claims will revolutionize web searching. However, it's not clear how the software will accomplish that. According to Rhombic's description of the product, it sounds like a glorified search engine hooked up to an automatic dialer and a database to track and log queries. OK, that might be helpful, but calling it the software industry's "next big thing" is a bit of a stretch.
Rhombic and another company, Mine-A-Max, OTCBB: MAMX) each put up $25,000 for Active Engine, although it's not clear when it will be available or at what price. Mine-A-Max, a mining company, also had a 25 percent stake in another, less publicized, Rhombic endeavor, a diamond fly-wheel battery, but Rhombic recently reneged, Skerry said. Rhombic's other info-age endeavor is the Fax Key, which it also partnered with Mine-A-Max on. Fax Key is supposed to offer a new level of security for fax machines. Like the Active Engine, there's no sign of an actual product.
With all this on its plate, it's a wonder Rhombic officials will have time to complete all the complex paperwork needed for filing with the SEC in two months. The company also plans to apply in the near future for listing on the American Stock Exchange (bypassing the Nasdaq in an effort to thwart market makers, Skerry said.) Without audited financials, it's impossible to tell whether Rhombic will even come close to qualifying for an AMEX listing.
As the company's dubious technology claims unfold, investors should be wary of outrageous claims, especially those from Vancouver, a swamp of slick stock promoters and shady deals. And perhaps Rhombic investors have found Nirvana. It's possible, if you skip to the last definition in Webster's Ninth New Collegiate: "a goal hoped for, but apparently unattainable: dream."
Send the StockDetective some Feedback
SOME OF THE SAME GROUP BEHIND NUKE ARE IN IDCN. IF JEFFREY LIES AND SAYS NO, THEN I WILL AND CAN PROVE IT SO.
Mr Metals
|
