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Is Bio-Heal Promoter Same As BusinessWeek`s "Dirty Rotten Little Scoundrels?" Monday , April 04, 2005 00:45 ET (financialwire.net via COMTEX) --April 4, 2005 (FinancialWire) According to JunkFax.org, BrYan Kos, whom McGraw-Hill`s (NYSE: MHP) BusinessWeek two weeks ago called one of "Wall Street`s Dirty Rotten Little Scoundrels," and whose assets were reportedly frozen, has reemerged to promote Bio-Heal Laboratories (OTC: BHLL), whose shares, now at $5.10, were at about $10.60 only last Wednesday. "Of course its Kos," said the site`s proprietors, noting that the new promotional site, http://www.primepennystock.com , is identical in almost every way to the former websites run by Kos, down to the word-for-word disclaimers. The promotional site also "recommends" E*Trade (NYSE: ET) as a broker. Kos and financiere Donald E. Oehmke were accused by the U.S. Securities and Exchange Commission of pocketing $11.3 million and $1.7 million in a similar promotion for Concorde America (OTC: CNDD). While calling "BHLL" a 700% profit potential, whom it says "analysts predict" will be at $16 within 4 months and $32 within 9 to 12 months. The SEC had also accused the promoters of similar efforts on behalf of Absolute Health & Fitness (OTC: AHFI), for which BusinessWeek said the reaped "total net profits of $14.4 million." There was no word as to who the analysts are, and the site discloses that the publication "is a paid advertisement by a third party." There is no disclosure as to who the third party happens to be, or what the compensation may have been, or even the form of compensation. There was also no disclosure as to whether or not anyone associated with the promotional site has received or bought shares of the company. Meanwhile, Stock Patrol (http://www.sotckpatrol.com), which partners with Investrend Information`s (http://www.investrendinformation.com) "Investors Resource Center," has published a complete expose on Bio-Heal Laboratories. "Think of it as the perfect storm for a penny stock ` a frenzy of activity leaving investors grasping for guidance. Start with an obscure, publicly-traded, non-reporting Company, operating from a remote locale and promising products that have not yet been introduced to the market. Toss in the fact that an Internet promoter has been hawking the Company`s stock with passion beyond reason and that, coincidentally or not, the Company`s shares recently moved from around $3 a shares to $11 a share ` on no news. Then throw in a nasty dispute between the Company and its principal critics, who have been exchanging charges," the article states. Stock Patrol continues: In the center of that storm we discovered Bio-Heal Laboratories, Inc., a Nevada corporation, with offices in Carson City, Nevada and operations in South America. On March 3, 2005, 100 shares of Bio-Heal common stock were traded, and the stock closed at $5 a share. The following day, 1500 shares changed hands as the price dipped to $3.10 a share. After that, the price of Bio-Heal shares began to creep up, as did trading volume. On March 11th, the share price hit a high of $11, as almost 124,000 shares changed hands. Volume reached 880,000 shares, and share prices hit $10.60 on March 29th. The next trading day, March 14th, the market for Bio-Heal collapsed amidst several negative reports on the Company originating from two Internet commentators, Our-Street.com and Stocklemon ` more than 2.3 million shares were traded as Bio-Heal stock descended precipitously to $4.40 a share." (Editor`s Note: a separate article in FinancialWire reveals that the proprietor of Our-Street.com, whom the SEC also alleges with fraud and corruption, and whose trial is coming up in June, has been said by an Illinois Judge to have skipped the country. StockLemon is also suspect, since its disclaimers state its proprietors sometimes hold "positions," read "short," in companies it negatively profiles.) Stock Patrol continues: The Company responded, issuing a press release disputing the negative stories and insisting that its products are legitimate. The roiling controversy is intriguing. As we often have noted in the past, it is often difficult ` and sometime impossible- - to find accurate, verifiable information about tiny, newly established Pink Sheet companies. Bio-Heal is no exception. Bio-Heal merged into a public shell, then called Nexar Technologies, Inc., in February 2005. As best we can determine, during its brief two month public life, Bio-Heal had not issued any press releases ` until its March 31st statement of self defense. It is not as though Bio-Heal had enjoyed a lengthy prosperous history before plunging into the public marketplace. The Company was formed in Nevada on November 16, 2004, about three months before merging with Nexar. Records maintained by the Nevada Secretary of State identify Robert Leahy as Bio-Heal`s President and George K. Minto as its Secretary and Treasurer, and provides addresses for both men in Carson City, Nevada. According to the Nevada Secretary of State`s office, Leahy and Minto also were officers of Nutra Pharma, Inc. ` although in that case their addresses are identified in Garden Grove and Huntington Beach, California. The information certainly ties together. Bio-Heal says that it maintains offices in Carson City, Huntington, and Nicaragua. On February 3, 2005, around the time of the reverse-merger, the Company implemented a one for 1000 reverse-stock split. As of March 21, at least according to information provided by the Pink Sheets, approximately 42.8 million shares were outstanding, 12 million in the market float ` giving Bio-Heal a market cap of almost $454 million on March 29th when the stock hit $10.60 ` a staggering value for a Company which had not filed audited financial statements reflecting its assets or earnings and had no discernible income producing operations. In the absence of regular public reports, investors seeking information about the Company must rely on a handful of sources; the Bio-Heal website, a Form 15c-211 "Information and Disclosure Statement" filed by the Company on March 10, 2005, and "reports" from promoters. The Company`s website, as we discovered, is hardly informative. The site, which claims to be "Under Construction," says that the Company "researches and manufactures topical pharmaceutical products in Latin America for distribution to Europe, UK, Asia, and Central and South America." The United States is not in the current mix of target markets. Visitors to the Company`s sparse website are referred to two other Internet sites for additional information on Bio-Heal`s "projects" and subsidiaries. One of those sites, for Bio-Heal`s subsidiary, Bio Lab America, is also largely under construction ` although it contains a modest amount of information. What we found, however, was not likely to reassure investors or shareholders seeking evidence of the Company`s viability. Bio-Lab describes itself as a group of medical doctors, nurses, engineers, plastic surgeons, biologists, computer programmers, etc. supported by multinational investors (bhll-OTC Market) that believe in the scientific necessity to find new opportunities for the application of alternative medicine in the art of healing. Their goal? "[T]o fully investigate, with scientific methodology, all the possibilities of organic healing products latent in nature, for its application in alternative medicine ` products mostly conformed by botanical and marine components" ` as they describe their objective. The cause sounds noble, but the details are thin. The website provides no biographical information on the members of this team. Instead, apparently subscribing to the notion that a picture is worth a thousand words, the website includes two photographs of the Company`s "investigating" team. The first, captioned "doctors and biologists planning in conference room," depicts seven individuals (men and women) in white shirts, seated around a desk, mostly smiling ` although they appear to be posing rather than planning. The second, entitled "medical staff and biologist in front of clinic at initiation of protocols," shows seven individuals (possibly the same men and women) standing in front of a white wall, wearing white shirts ` still smiling. A separate series of photos featuring the "medical team," shows a number of individuals, most of them in white coats, and in several cases include what appear to be patients being examined. Photographs of the clinic offer few additional clues to the state of the Company`s operations. A portfolio of pictures shows a small bungalow-like building, several rooms with beds and examining tables, and pictures of people who are identified as "highly trained" and "qualified" registered nurses. Pictures of the laboratory include glimpses of Petri dishes and microscopes. A series of pictures showing the clinic`s "patients" features a group of men and women seated on a bench waiting treatment. In the end, the pictures provide little meaningful insight into the operations of the clinic, the identities of its staff, the nature of the illnesses treated, or the scientific validity of the Company`s methods. In any case, the Company and its investors would have been better served with a thousand words. The Bio Lab website does include a description of the Company`s product ` a substance called NatuGel, which it claims "should be ready for world marketing by the end of 2005." Viewing the photos on the Bio Lab website, NatuGel appears to be a dark gel-like substance packaged in small containers that are reminiscent of those used by delis to package side dishes. The online sales site for NatuGel, like much of the Company`s web presence, remains "under construction." Bio Lab says it is conducting "several medical protocols in Latin America" under "extremely strict research," to validate the effectiveness of "natural and organic products to treat wounds and certain viral infections." Although the Company claims that "some positive results have already appeared," there is no indication that the Company`s products or processes have undergone independent clinical trials. The Company does not say whether it has ` or is required to ` seek approval from the U.S. Food & Drug Administration, or similar agencies in the nations where it will be marketed. Bio-Heal also maintains a website for another subsidiary, Rain Forest America ` again, in substantial part, "under construction." According to the website, Rain Forest America is the "proud owner of 11,500 acres of "prime virgin rain forest" in coastal Nicaragua. The Company claims the "plans are being developed to create a protected area that will be saved from ecological disaster, but that, at the same time, will promote integrated projects using a sustainable approach to development." What are the Company`s plans for the property? Rain Forest America lists its goals, in a broad sense: protecting the world`s rain forests; education people about deforestation developing a sense of community and keeping the business moving forward. Again, the Company articulates an admirable undertaking, but offers no sense that it has or is likely to produce meaningful value for shareholders. What is the Company permitted to do with and on the property? Does the Company have the economic ability to pursue its plans? The website is silent on those matters. What is the Company`s business plan? A webpage entitled "Our Vision" remains under construction The Form 15c-211 contains more details about the Company, but little meaningful insight into its operations and products. It provides significantly more information about the Company`s personnel and office ` but like the websites, offers few details supporting the viability of the Company`s products or the likelihood that it will succeed in its efforts. Some of the trees become visible, but the view of the forest remains cloudy. The filing does provide considerably more information on the Company`s facilities in Nevada, California and Nicaragua. It notes that 38 individuals presently are employed at the Nicaraguan facilities and lists the doctors and nurses working at its medical investigation facilities. The Company indicated that it maintains separate production facilities, also in Nicaragua. The Form 15c-211 explained that the Company`s rain forest acreage would be used to collect wild plants for medical use and develop" organic growing." According to the Company, the property was purchased for $400,000, payable over ten years at 2% interest. Bio-Heal did not say how much had been paid as of the date the Form 15c-211 was filed. The Company estimated that timber on the land was worth $5 million ` although it provided no appraisal or basis for that estimate. Certainly nothing in the Bio-Heal family of Internet sites would seem to justify the sudden ascent of the Company`s stock price. Perhaps the price movement can be attributed to the efforts of a spanking new penny stock promoter calling itself "Prime Penny Stock." "Prime Penny Stock" admits that it was paid to publish its "report" on Bio-Heal ` which it characterizes as an advertisement ` although as best we could determine the promoter has not disclosed the extent of that compensation. Prime Penny`s operating history is virtually non-existent. The website was created using an address in Luxembourg on February 28, 2005 ` just in time to initiate the Bio-Heal campaign. The registrant of the website is identified as "Computer Services Langenbach GMBH DBA Joker.Com. The joke, in this case, is on anyone who takes this promotion seriously. Prime Penny Stock predicts that Bio-Heal will trade at $16 a share within four months and $32 a share in nine to twelve months. The paid tout makes these predictions even though there is no verifiable evidence that the Company has any assets, revenues or operations ` other than those non-descript snapshots of the "medical facility" and rain forest, and the broad representations in the Form 15c-211. The absence of facts certainly did not deter Prime Penny stock from its mission to "prime" the market for the Company by claiming, among other things, that: - Bio-Heal has an over-the-counter line of products of organic, botanical and marine substances with medical applications; - The Company`s products inhibit bacteria from attacking cells and prevent disease and infection while helping the body cure disease and infection and accelerating healing; - The product is 100% safe for topical use, and so far there have been no signs of serious side effects; - The Company`s products can be used to treat a wide variety of ills, from acne to diabetes; - Bio-Heal has developed "several" proprietary, patent-pending products; - Sales of over $380 million are expected by the end of 2007. Prime Penny offers no meaningful support for any of these claims. It presents no evidence that the Bio-Heal products have been tested ` or when and where ` either by the Company or an independent laboratory. No basis is provided that would support claims for their efficacy. The promoter did not indicate where Bio-Heal purportedly had filed its patent applications, but we found no sign that such applications have yet been filed and published in the United States. Still, the "report" declares that Bio-Heal is "positively impacting healthcare worldwide," and predicts that "based on a standard evaluation methodology.we believe the near-term valuation of BIO-heal (sic) approaches $660 million, with the potential of tripling to $1.5 billion in the coming year." Did that standard method of valuation included a Ouija Board? Bio-Heal has yet to publish audited financial statements or disclose its revenues and expenses. In the wake of recent reports criticizing the Prime Penny promotion and pointing out the irrational recent price rise for Bio-Heal shares, the Company has taken the offensive, charging one of its critics, Our-Street, with acting as a "web-front for short sellers" and releasing an unaudited summary of its assets and liabilities. On March 30th, the Company claimed that its current assets totaled over $270,000 (including over $196,000 in a U.S. account), while its fixed assets exceeded $4 million, (including timber reserves valued at $3.5 million). The Company disclosed a $350,000 mortgage on the rain forest acreage. The partial unaudited financial statement did not provide any basis for its valuation of the fixed assets or include any balance sheet, schedule of revenues or expenses, or footnotes detailing the few items presented. In short, it offered an incomplete, unverified view of the Company`s financial state ` sort of like a photo taken with a thumb partially covering the lens. One day later, on March 31, 2005, BioHeal issued a press release claiming that critics were issuing false and misleading reports, and insisting that Bio-Heal is "a leader in the field of natural healing research in Central America." The Company said that its "topical pharmaceutical products" have been "tested extensively," "have proven to be effective," and can be used "in the treatment of diabetic ulcers, decubitus ulcers, acne and other conditions of the skin and underlying tissues." It did not describe the testing process, saying only that these "indigenous regional products have been in use by people of the region for centuries." The press release reiterated Bio-Heal`s earlier claim that timber on its rain forest property was worth $5 million, but still provided no independent appraisal validating that claim. Although the Company attempted to distance itself from the promoter, claiming it had not paid anyone to tout the stock and said it never had issued projections, it insisted that "factual data" posted about Bio-Heal was accurate ` apparently including the rather scanty "facts" posted by Prime Penny. In fact, the Company suggested that the critics, Our-Street in particular, may have created the Prime Penny promotion in order to set up a scenario in order to criticize the Company and profit as a "short seller." On March 31st those shares continued to decline, closing at $3.70. More than 1.36 million shares were traded. Who stands to profit ` the short-sellers or the promoters? Who is wearing the white hat here? Either way, public shareholders will suffer losses as a result of the dramatic rise and precipitous decline. Considering the lack of meaningful information about Bio-Heal`s operations and fiscal condition, those investors are likely to be wondering why they invested in the Company in the first place, concludes Stock Patrol. If the confluence of events so far serve as any guide, there is likely "more to come," and it certainly has all the earmarks that existed in the previous SEC stoppages discussed by BusinessWeek at http://www.businessweek.com/magazine/content/05_12/b3925104_… "Many market experts laud the SEC`s cleanup campaign. The only thing lacking, they say, is more criminal prosecutions," concluded BusinessWeek. "The prospect of jail time is the only real deterrent," says former SEC enforcement attorney Jacob S. Frenkel, now a partner with Shulman Rogers Gandal Pordy & Ecker. The SEC says it`s doing its best to get federal and state prosecutors involved. But until then, count on the nation`s securities cops to use all the weapons in their arsenal to keep the pressure on, concludes BusinessWeek. For up-to-the-minute news, features and links click on http://www.financialwire.net FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on http://www.investrend.com/contact.asp The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: http://www.investrend.com/XmlFeeds?level=268 http://www.financialwire.net (C) 2005 financialwire.net, Inc. 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| aus der Diskussion: | Bio-Heal Laboratories, Inc. (OTC:BHLL), sauber abgestürzt |
| Autor (Datum des Eintrages): | js200 (04.04.05 18:42:14) |
| Beitrag: | 9 von 10 (ID:16292836) |
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