While the company name and line of business may have changed, the schemers running the show remain the same.
December 1, 2014 (note): While the company has changed its line of business and its name , this article is still prevalent in that the intentions of the keys players, identified below, remain the same. Those intentions are clearly to dump worthless stock onto the public. Take heed.
November 1, 2013 (Updated: November 4, 2013): Best Damn Penny Stocks current Pump & Dump project is Allerayde SAB (ASAB), a rewashed, rerinsed and repeated scheme that was formally known (and pumped) as Resource Exchange of America (RXAC). Needless to say, RXAC lightened many a wallet, while fattening those belonging to the insiders including the ones we will talk about here. We've already discussed the history of this extremely dirty ticker in an advisory last week, so we won't rehash any of those details except to say that as of this writing, it is still three years since the company last issued a press release under either ticker.
What should concern investors and flippers alike is the connections that could render this ticker worthless sooner than expected, as the possibility of an SEC or FINRA imposed trading halt is very possible. Together these connections verifiably owned 99% of ASAB free-trading stock on September 19, 2013, when trading began in earnest. Let's talk a look.
Urlik DeBo and DeBondo Capital
Urlik DeBo is the principal of DeBondo Capital and has been involved with this ticker since its RXAC days. Anybody we've talked to that has been involved with DeBo in past penny stocks dealings, has used the same four or five adjectives to describe his ruthless tactics once he gets a company and its President under his thumb. None of them were complimentary and the f- word was repeated several times. Apparently, Mr. DeBo is not pleasant once his schemes have been realized by the duped party who is then threatened by DeBo if the offended party squawks. One interviewee described Mr. Debo's tactics as a vise which he" closes tighter and tighter until he has squeezed all he can out of the company's stock." Sounds like the MO of a Calgary con man we've recently profiled.
DeBo is the founder and Chairman of the Propero Foundation, a purportedly philanthropic enterprise, and yet also seemingly intended to become a veiled promoter of DeBo's stock schemes as seen at www.GetRichOffStock.com and a page from the website, touting the wonderfulness of Mr. Debo.
|GetRichOffStock.com <click to enlarge>|
Few have ever actually met Urlik DeBo in person. He usually uses his lieutenant, Mitchell Johnson, as the face of DeBondo Capital. Disturbing comments that Johnson has made to clients in the past include:
Other tickers with DeBo and Debondo Capital connections include ETEK, BLGW, VNDB, GSGM, POWT, IDVC, GVBP, KHGT, PYBX, UCPA, ALTA and VNTA, each and every one of which has been the subject of a Pump & Dump scheme, and each and every one of which has since gone to zero, or is heading in that direction. Having been drained of credibility and resources once DeBo sinks his blood-sucking proboscis into it, none of these tickers has become a successful entity and what may have once been a promising enterprise, is rendered into worthlessness.
- reverse splits are necessary to eliminate past shareholders who would be looking to sell into any trading volume and thus counter-intuitive to a price increase
- notes need to be converted into stock at low rates in order to ensure that insiders maintain control of the company
- denying that DeBondo Capital has ever been involved in a "Pump & Dump" and on at least two occasions claiming to be unfamiliar with the term
- denying any DeBondo association with several of the tickers listed below, even though the filings of these companies clearly identify a relationship with DeBondo Capital
We've heard the same story repeated over and over again. DeBo becomes acquainted with an entrepreneur with a good idea, who is desperate for funding and is gullible and easily manipulated, and if DeBo figures he can make hay out of the idea, i.e. sing its praises enough to generate interest in a stock scheme, he makes promises of unlimited funding and fills his mark's head with delusions of grandeur. He then gets his mark to agree to vend the idea or asset into an empty shell that DeBo already controls and provides the first tranche of funding, which is just enough to get the scheme started. DeBo falsely promises additional funding through investors of the stock. In the course of the inevitable Pump & Dump campaign, DeBo cashes out his stock without providing the subject company anything more than the occasional token few dollars, much like the pennies thrown into a blind man's tin cup. In the meantime, DeBo has maintained his notes which can be converted into stock to regain control of the shell, once he has choked the current project out of existence.
ASAB is currently in the midst of the scheme described above. Its ties to DeBondo Capital are well documented in SEC filings, including this one, which states that;
The Company entered in to a consultancy agreement with DeBondo Capital on January 7, 2013 to pay a sum of $50,000 to DeBondo for services to be provided during the first 4-5 months of 2013. DeBondo agreed to convert the fees due to a convertible loan in the amount of $50,000. The note matures on January 8, 2014 and bears interest at 5%. The holder of this note shall have the right, exercisable in whole or in part, to convert the outstanding principle and accrued interest hereunder into fully paid and non-assessable common shares of the Borrower's stock at fair market value.This consultancy agreement is how DeBo will regain control of ASAB shell, apparently in January, long after the current Pump & Dump scheme is over.
ASAB President, Michael Rhodes, appears to be a legitimate dupe of DeBo. His credentials as far as being an innovator of Injection Pens are verifiable. That is what DeBo finds appealing here and that is what he is selling. The rest is just air. Michael Rhodes is nothing more than the audience of an illusionist creating a mirage of untold riches. The funding will never come, just like it never came for RXAC, and its President, Dana Pekas.
We can visualize the likely still seduced Rhodes calculating his paper net worth as he controls the majority of ASAB shares and watches already overvalued shares climb during the Pump & Dump scheme. The problem is that Rhodes paper is restricted, cannot be sold, and he is unlikely to ever benefit from the temporary valuation. Then he will end up losing his paper once Debo inevitably converts his loans to cheap stock and takes back control, sure to reverse out Rhodes' holdings.
Frank Zangara and BHI Group, Inc.
Frank Zangara is bad news. He has been sanctioned by the SEC and FINRA so many times, we wonder how he can still get openly involved in these penny stock schemes. Zangara and his BHI Group are old partners in DeBo's schemes, having been involved in GGSM, IDVC, VNDB and of course RXAC. Other tickers attached to Zangara include the heavily promoted NANI, PERT, ALVN and EVRN. Of course none of these companies ever amounted to anything.
Zangara's trouble with the courts and the regulators is as long as your arm. He has been permanently barred from brokering or dealing securities. In this SEC Litigation Release from October 1, 2008, Zangara was among a list of defendants alleged to have violated broker-dealer registration and reporting requirements. The release states that:
Zangara, age 46, a resident of Locust Valley, New York. Zangara has an extensive disciplinary history including a 2004 Commission bar from association with a broker or dealer, with a right to reapply after five years. See Frank Zangara, Exchange Act Release No. 49805 (June 3, 2004)In this private litigation, Zangara was among defendants found liable for a market manipulation scheme for actively participating in the Pump and Dump of ALVN.
Back in December 2012, it looked like the wheels were falling off Urlik Debo and Frank Zangara's plans to incorporate Allerayde into their next Pump & Dump scheme. As the deal was being unwound, Zangara had his buddy and business partner, Mark Dresner, replace Michael Rhodes and pretend to become the CEO and the sole director of the RXAC shell, as memorialized in this SEC filing. Over the next 3 months, the boys apparently got Rhodes back in line with the program, and he was reinstated as President, CEO and sole director, according to this March 21, 2013 8-K filing.
Mark Dresner's involvement clearly illustrates the ill intentions of Zangara and company. Zangara and Dresner have worked together to promote several Pump & Dump schemes in the past, including NANI and VNDB, both of which we are well documented to show that Zangara was a principal player. The BHI Group website's Leadership page lists only Zangara and Dresner.
|BHI Group Leadership <click to enlarge>|
The BHI Group website names Frank Zangara as the reigstrant and Mark Dresner as the administrator for the site according to the Who Is registration record.
|TheBHIGroupInc.com Who Is Record <click to enlarge>|
|CEOinsiderTV Promotes ASAB <click to enlarge>|
CEOinsiderTV.com is registered to the same physical address as the BHI Group's site, as shown by the Who Is registration information. The admin of CEOinsiderTV.com is also identified as Mark Dresner.
|CEOinsiderTV.com Who Is Record <click to enlarge>|
Spectrum Research Group, has produced an ASAB report.
|Spectrum Research Group ASAB Report <click to enlarge>|
The Spectrum Research Group's website is registered to an address 471 N. Broadway in Jericho, New York, according to Who Is.
|SpectrumResearchGroup.com Who Is Record <click to enlarge>|
|Spectrum Research Group, Inc. Corporate Record <click to enlarge>|
This is the same address that Frank Zangara's BHI Group is located at, according to the BHI Group website's Contact Us page.
|BHI Group Website Contact Us Page <click to enlarge>|
Mark Dresner's Bio page on the BHI Group website makes no mention of his connections to Spectrum Research Group, CEOinsiderTV, or that he was once CEO of ASAB/RXAC.
|Dresner Bio Page On ASAB Website <click to enlarge>|
In a nutshell, what is going here is that Zangara/Dresner are promoting the stock of their own company and selling into the promotion. The Spectrum Research Group Disclaimer page kind of admits it. CEOinsiderTV.com does not, seemingly in violation of SEC Rule 17(b). Allerayde also fails to state that it is associated with CEOinsiderTV.com, and as a result is promoting itself in order to sell stock. A link to the CEOinsiderTV.com video is provided on the Allerayde website.
|Allerayde SAB Website Home Page <click to enlarge>|
Although several sources reported that they have sold their holdings in ASAB to Frank Zangara in an undisclosed transaction, Asher Enterprises has reportedly (but unverified) accumulated new notes which have been converted to stock through additional funding. Asher is a notorious perpetrator of Pump & Dump campaigns designed to divest themselves of stock accumulated through notes which are converted to shares at deep discounts to the market. Generally, Asher is the go-to funder when a public company needs the cash necessary to complete a current filing, usually less than $100,000. Such notes with respect to ASAB/RXAC, are well documented in SEC filings here and here. These notes were converted into 1 cent ASAB stock.
Best Damn Penny Stocks and Global Investment Alert
The claims made by BDPS associate, Global Investment Alert, are essentially bunk. We can only hope that Mr. Rhodes has not yet seen the false claims, rather than be complicit with them. We point you to the current posting on the GIA website, but in anticipation of its eventually depublishing, display it below.
|Piece On ASAB From Global Investment Alert <click to enlarge>|
Among the several pieces of patently false information provided in this piece, we highlight the following:
On the heels of the recent fall of Awesome Penny Stocks, after a series of regulatory actions against its Pump & Dump subjects and the fugitive status of its principals, we have been given reasons to believe, i.e a wink and a nod from high level authorities, that Best Damn Penny Stocks and several of its prime clients are the next targets of the regulators.
- After having spoken to Michael Rhodes himself several weeks ago (he did not know he was speaking to us), we can tell you that ASAB has not spent the last two years developing its product, namely the AAA Pen. The pen is nowhere near development. There have been no clinical trials because the pen does not exist. The company is only in talking stages with manufacturers and the AAA Pen does not even exist in a prototype. At this time the AAA pen is nothing more than an idea, having never been inside a lab. What does exist is an off-the-shelf, generic product that may be manipulated to deliver epinephrine, which in itself is no easy matter considering the requirements for precision in dosage, syringe placement and shelf life. According to Rhodes, the development of the pen is 6 months from the time $2 million in funding is made available. None of that funding has come to fruition thus far in spite of the promises made by DeBondo.
- The AAA Pen, if it ever does come to fruition, will never come to market in the U.S.A. or Canada, due to the sure litigation for patent infringement that will be brought by the manufacturers of EpiPen.
The conglomerate conducting the ASAB scam are a little sloppy. We took a look at the source code (IE - right click and then click "View Source"; Firefox - right click and then click "View Page Source") of the Allerayde website and found something very telling.
|Segment Of Page Source From Allerayde Website <click to enlarge>|
The template for the website was copied directly from the GGSM website as the Disclaimer portion of that website was left in ASAB website's source code. Quite comical and very revealing.
This can only end one way: the same way all Best Damn Penny Stocks Pump and Dump campaigns end, with a lot of losers on the street. Michael Rhodes, will not be funded, at least not by DeBondo, and he will lose control of the ASAB shell and maybe even the AAA Pen, to be left on the heap of carcasses picked clean by Urlik DeBo, Frank Zangara and Asher Enterprises. It also seems very possible that trading will be subjected to a halt in consideration of the connections outlined here and the possible violations of SEC Rule 17(b). We have made the regulators aware of our findings.
Why Shorting Shares Of ASAB Is A Very Bad Idea
The perpetrators of the ASAB Pump & Dump are counting on the shorting of the stock and have made it easy to do so. It is a gambit that Eric Cusimano and his Best Damn Penny Stocks outfit is very good at. The fact is that DeBo, Zangara, and especially Cusimano are much more powerful than the shorts and they have already shown it in past schemes, as well as having already benefiting from the shorting of ASAB. First, the schemers have made it easy to short ASAB by placing shares in several brokerage accounts and making them available for borrowing. They are counting on these very shares to be shorted. But the problem is that these guys own almost all the stock and right now can control the price of the shares through wash trades and calling in the borrowed stock, thereby increasing the share price at their will. This triggers a need for the shorters to cover their deficiencies, especially those that have been short for three days and fallen below the margin requirements. We saw this occur on a small scale just last Friday, November 1. Short covering creates a demand for the stock and a further share price increase, possibly putting new pressure on additional shorters. While we expect that shares of ASAB are a strong candidate for a trading halt, which would benefit those in a short position at that time, it is impossible to know when this could happen. Even a few days can create a cash bonanza for the perpetrators of this scheme at the expense of those requiring to cover a short position prior to any possible trading halt. The best idea is to stay on the sidelines.