With a series of maneuvers designed to wipe out old bag holders while issuing insiders 100s of billions of shares of worthless stock, Safer Shot is set to be one of StockTips' biggest scams of the year
Written by Janice ShellOctober 12, 2015: Yearning for a big budget, high profile promotion? StockTips' actor-spokesperson "Mike Statler" is back with what he rather puzzlingly claims is a brilliant new idea. Not that Mike doesn't need a new idea: his last two picks,
Telupay International (
TLPY) and
Coastal Integrated Services (
COLV), fizzled quickly, delivering significant gains chiefly to insiders, or to frontrunners who'd guessed or been told what the play would be.
As always, Mike set the stage with alerts in advance of his official announcement, which was scheduled for late Sunday, 11 October. On the preceding Friday, he released a
video--in reality, only text with a voiceover--to his "kids," revealing the epiphany that had come to him after two years of work and study. His new pick would not only be a subpenny, but a $0.0001 subpenny. Why? Because, he solemnly intoned, "the actual lowest price a stock can go is not zero, but $0.0001!" So, he says, this "fabulous" play will have nowhere to go but up.
How dumb do the people behind StockTips think penny players are? Ever since super-diluting nanocaps became popular in the early 2000s, would-be masters of the universe have been attracted to them for the very reasons Mike offers. And most of them learned that while occasional runs are possible, and can be profitable, they're few and far between. More often, the company effects a reverse split, or the stock is stuck at no bid for so long it's deleted as an inactive issuer by FINRA. The more unwieldy the share structure, the less likely the issue is to move, even with an active promotion underway.
And it's not true that stocks can't trade lower than $0.0001. It's always been possible for them to trade as low as $0.000001. They merely cannot be quoted below $0.0001. On 17 November 2014, FINRA
made a change in the way trade data were reported, resulting in prints out to six digits. Retail is for the most part unable to benefit from this. You can't place a buy or sell order with E*TRADE at $0.00001. If, however, you're incautious enough to place a sell at market for a no bid issue, that could be what you'll get for it. Many have come to understand this. So why doesn't StockTips?
Perhaps Statler isn't a complete idiot. Maybe he's such a good actor he's able to suppress the chuckle he feels coming on when he tells his potential marks that a $0.0001 stock can only go up. Chances are the people paying for his new promo have already made arrangements for negotiated sales of very large amounts of stock, and those sales will, if necessary, be executed below $0.0001.
The pickOn Sunday afternoon, email announcing the pick arrived in StockTips subscribers' inboxes. It was Safer Shot, Inc. (
SAFSD); Statler says immodestly that he expects it to be his "biggest winner of all time!" But of course, he always says that of his picks. He had nothing to say about the company, though he promised a full report for Monday. What he feels is important is that he's found the HOLY GRAIL!! We're not making that up.
SASFD is the Holy Grail precisely because it's a cosmic loser in terms of price and share structure. It's certainly a departure for StockTips:
COLV, for example, had a a manageable
352 million shares outstanding at 30 June, and opened at about $0.14 the first day of the promo.
Safer Shot has a staggering 1,160,916,581,000 shares outstanding. Yes, that's 1.161 TRILLION shares. The authorized capital is 2 trillion. The float is 50.6 billion.
SAFSD has done the unthinkable. It has issued more stock than CMKM Diamonds (
CMKX), the previous and longstanding winner in the Insane Dilution category with 778 billion shares out in 2004. (Though to be fair, nearly all of that was in the public float, so perhaps
CMKX still comes out on top.)
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| SAFSD intraday, 9 October 2015 |
Friday's intraday chart shows signs of frontloading. There was no action at all--not a single trade--until 2:48 p.m., when sudden very heavy volume hit. Stock price moved off $0.0001 quickly, touching $0.0003 within minutes. Volume for the session was 790 million shares, dramatically higher than the 30 day average of a mere 28 million shares.
Were insiders already dumping, as marks-in-the-making were loading, believing they'd figured out, or been tipped to, a mega-mover? Probably both. There were three sells at $0.00009, for a total of 50 million shares.
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| Three trades at $0.00009 |
So much for StockTips' theory that
SAFSD can't go below $0.0001.
In the email blast, Statler gloats that his nemeses the "short selling pirates" won't be able to engage in a "bash-a-thon," tanking his play. Showing a little sense, he points out that no one would short a stock at these levels. So in his view,
SAFSD's miserable price is a "secret silver bullet." There is, he assures his readers, no downside, and "almost limitless upside potential." It seems to us unlikely that even the newest newbie will buy into this blather.
In the disclaimer attached to the email, StockTips discloses a "marketing budget" for its parent company, Amerada Corp., of $1.9 million, to be provided by the promoter's usual third party payor, Laluna Services, Inc. That's down considerably from the $4.5 million Amerada says it was promised to tout
COLV, but in all likelihood multi-million dollar remuneration is not in play here. Claims of extravagant fees for service are often intended merely to impress. For all we know, StockTips may have been compensated in stock it intends to unload at the first opportunity. Or StockTips may own a large block of stock itself that it will dump along with the insiders.
Safer ShotSafer Shot has, it says, developed a line of "non-lethal weapons that utilize a proprietary kinetic projectile cartridge." The weapons, which look more or less like guns, are designed for use by law enforcement and civilians alike.
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| Safer Shot Bouncer M-22™ |
The projectiles fired by the devices cause extreme pain and immediate incapacitation, but don't do long term injury. A
video produced by
SAFSD shows them bouncing off the bare chest of a test subject who probably wished he hadn't volunteered. But while there's no doubt a need and a market for such weapons, Safer Shot hasn't been able to capture any of that market, despite the fact it's been around since 2008. The company has always operated at a loss, and, as it says itself, does not have significant revenues. Its most recent
quarterly report, filed with OTC Markets for the period ended 30 June 2015, is dismal. 443 bucks in cash is the only tangible asset listed. At $.0001, the company carries a market cap of $116 million.
Safer Shot is run by Michael J. Black of Annapolis, Maryland. He joined the company in 2010, as secretary, treasurer, and CFO; at that time John Lund was CEO. When Lund resigned in early 2013, Black became sole officer and director. Black is also sole officer and director of two other Pink issuers, Healthnostics, Inc. (
HNSS) and InternetArray, Inc. (
INAR). All three companies have been diluted and reverse-split into the ground.
INAR has undergone two very large reverse splits--1:1000 and 1:2500--since 2009, and currently has 7 billion shares outstanding.
HNSS has done four reverse splits since 2007, the most recent in May of this year.
SAFSD's story is a bit stranger. Its first reverse split, a 1:100, was accomplished in April 2013, shortly after Lund's departure. Its second, a more dramatic 1:1000, became effective on 6 January 2015. And then, changing the familiar pattern, Black followed up with a 1000:1 forward split on 14 September 2015. It is bizarre that FINRA would even allow this forward split which essentially undoes the action of 8 months earlier.
Cui bono?Obviously all this is a form of insider enrichment scheme. The new twist, the forward split, adds extra zing to the old formula. Safer Shot was originally incorporated in Wyoming, but
moved to Nevada in 2005. In early February 2015, it redomiciled in Florida. At the same time--a little more than a month after the big reverse split--the company's
authorized capital was raised from 500 million shares to 2 trillion shares. Clearly, a plan had been formulated. On 23 June, Black filed an
amendment to the corporate charter indicating that a 1000:1 forward split would become effective as soon as FINRA processed the relative corporate action request.
But even with the forward split, how did the share count zoom into the stratosphere? During the quarter ended 31 March, but after the reverse split had taken place,
Black gifted himself 1.01 billion shares of common stock "as an adjustment to future compensation due to the reverse split." Go figure. At the same time, he issued 100 million shares "under the conversion terms of a note payable, without restriction to Acquest Capital Group, Inc."
So now, with the forward split accomplished, Acquest Capital is the proud owner of 100 billion shares of free trading commons. Those shares will be dumped into the StockTips pump. What did Acquest pay for this bounty? About $10,000.
In its OTC Markets filings,
SAFSD does not identify Acquest's principals, though the firm had been lending small sums for years. Acquest Capital Group was
incorporated in New York in March 2006. Impressively, its address was on Fifth Avenue, care of H. Melville Hicks, Jr. Hicks, however, was not an officer of the company; its principal executive officer was Ashley Pudinski, who, like Michael Black, was from Maryland. Stevensville, to be precise.
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| Ashley Pudinski |
An Ashley Pudinski who describes herself as a model and actress put together a sketchy ExploreTalent résumé at an unknown date. She is, or was at that time, 30 years old, and from Stevensville. Stevensville and Annapolis are about 15 miles apart.
Acquest was dissolved by the state of New York in January 2012; it had become inactive. That, evidently, was because H. (Henry) Melville Hicks, a former Marine and an
attorney, had
died in 2010. Evidently Hicks and Black had known each other for a long time--Black, though not as old as Hicks, is now in his early 60s--and had worked together on several occasions. In 2002, Black, already CEO of Healthnostics, launched a Regulation A offering of up to 10 million shares at a price of $0.10 a share. Hicks acted as the company's attorney.
HNSS was not at that time public.
In later years, Acquest would act as a small lender to
HNSS, just as it did to
SAFSD. Not surprisingly, it was rewarded by large debt conversions. Because Black's other company,
INAR, never named its creditors in its filings, it can't be said whether Acquest was among them, but it did pay for
several promotions of the stock by James Meagher, operator of Shakerz and Moverz. (Meagher called its payor ACQuest Capital Corp rather than Acquest Capital Group, but it seems likely that's just a typo.) Acquest--spelled correctly this time--also
compensated Shazam Stocks for a 2008 pump of
HNSS.
It would make sense to imagine that Acquest, as the entity that stands to benefit the most from a successful promotion of Safer Shot, is the entity that's funding the campaign. Remember: the purpose of a Pump and Dump is to generate volume sufficient for holders of large positions to sell into. Even with truly spectacular volume, Acquest won't be able to get rid of all of its 100 billion shares without setting off some "unusual volume" alarm bells at FINRA, but it may end up with a good deal more cash than it had a few days ago. That cash will be made with the help of imprudent penny plungers.
Acquest appears no longer to exist as a real company; no record of its corporate existence can be found in states other than New York. Yet the name continues to be used. It's not as if OTC Markets is going to ask for more information, so perhaps the people behind it feel safe enough. Are those people Black and Pudinski? It certainly isn't a stretch to imagine that Pudinski fronted for Black when the now-defunct corporation was formed, and stuck with it till Hicks's death. She may still be lending a helping hand; it's tough to catch a break as an actress and model. Were Ashley and Michael lovers, and are they still? We'll leave that to your lurid imaginations.
Over the next days, and perhaps weeks, StockTips will continue to pitch the notion that throwing money at a Pink piggy with 1.16 trillion shares outstanding is, as Mike Statler says, a "no-brainer." It is indeed, but not in the way he meant. Of course the float's supposed to be "only" 50 billion shares, but that number can't be right: we know that Acquest received 100 million free trading shares in March, which became 100 billion upon effectiveness of the 1000:1 forward split.
Mike Statler needs to be careful. He may end up shooting himself in the foot, and not with a Bouncer M-22™.
