Stocklemon reports on GeneMax (OTC BB:GMXX)
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When Bad Things Happen To Good People
Shares Outstanding: 15 million
Market Cap: $83 million
Revenues Since Inception: 0
Cash in Bank: $180,000
GeneMax (the “Company”) is a biotechnology company specializing in the discovery and development of immunotherapeutics aimed at the treatment and eradication of cancer, and therapies for infectious diseases, autoimmune disorders and transplant tissue rejection.
Stocklemon reports on Stratabase (OTC BB:SBSF)
Stratabase… How About A Company To Go With The Promotion Please.
Stratabase is a tiny software company with just 8 employees located in Abbotsford BC. Trevor Newton is the CEO, President, Secretary and Treasurer of Stratabase. Stratabase, formerly known as Stratabase.com, develops open-source Customer Relationship Management (CRM) software for its clients and for general distribution. Additionally, Stratabase sells hardware solutions to enterprises.
With over 7.7 million shares outstanding, Stratabase has a market cap of almost $17 million. Yet, the company has no real product. In fact, they admit that Reata, which is considered their “great” product, is nothing more than a free open source code. Stocklemon has had great difficulty in writing this report because the management of Stratabase has not returned any phone calls regarding investor relations. Furthermore, neither Mr. Newton nor Fred Coombes ever seems to be in the office. Try them yourselves and find out.
Management
Stocklemon has always held the belief, “If you can’t bet on the horse, then be on the jockey.” It is the belief of Stocklemon that the jockeys of this company are comprised of two men, Trevor Newton and Fred Coombes. There is one common denominator between the two men, they are both former stock promoters.
Trevor Newton was formerly employed by Stockscape.com, an online tout sheet of OTC andsmall cap stocks. Fred Coombes, the director of business development, a member of the Stratabase’s board of directors, is also currently a stock promoter. According to Stratabase’s annual report, “Since 1987 to the present, Mr. Coombes has also acted as the President of Co-ab Marketing, Ltd, and investor and corporate relations firm.”
Stocklemon believes that during the year 2001, Stratabase issued approximately 7 misleading press releases that made the company appear to have relationships with major technology companies. Upon further examination we found that these “deals” were nothing more than reseller agreements that might not generate even one dollar of revenue. It would be as if you own a hardware store and announce that you had a deal with GE because you sell their light bulbs. It appears to us that Stratabase attempted to add as much credibility as they possibly could by prostituting the names of respectable companies. It is our belief that the most flagrant abuse of this practice occurred when Stratabase announced a deal with the security firm Identix on September 28, 2001, in order to capitalize on the momentum of the security stocks post September 11th.
Identix:
http://web.archive.org/web/20011118174925/stratabase.com/newsArticles.php?Entry_ID2=33
3Com:
http://web.archive.org/web/20011024224732/stratabase.com/newsArticles.php?Entry_ID2=32
Intel:
http://web.archive.org/web/20011118174307/stratabase.com/newsArticles.php?Entry_ID2=31
Hewlett-Packard:
http://web.archive.org/web/20010905134230/www.stratabase.com/newsArticles.php?Entry_ID2=30
Microsoft:
http://web.archive.org/web/20010905152626/www.stratabase.com/newsArticles.php?Entry_ID2=28
Cisco:
http://web.archive.org/web/20010905151713/www.stratabase.com/newsArticles.php?Entry_ID2=26
Citrix:
http://web.archive.org/web/20011118181250/http://stratabase.com/newsArticles.php?Entry_ID2=34
But Then Something Funny Happened
All ofa sudden, one day these press releases disappeared from the Stratabase Website.They seemed to have vanished into the thin air. What happened? Are these terrific strategic relationships no longer worth talking about? Were there even agreements with these companies? This begs the question, did Stratabase have authority from these companies to issue the releases in the first place? Was this all done with the intention of hyping the stock? Below is a link to the current list of archived releases on the Stratabase Website, what happened to the aforementioned announcements?
http://www.stratabase.com/newsList.php
Questionable Business
During2001, Stratabase recorded revenue from three customers who paid for services with stock in a publicly traded company. Reportedly, the value of the sales and the stock received from these three customers was in the amount of $1,410,000. Shortly thereafter, Stratabase sold this stock for $1,564,000, recognizing a gain of $154,000. Furthermore, according to the company’s filings,
“The Company had a single sale to a customer during the quarter ended March 31, 2002, that accounted for greater than 10% of their total revenues. The revenues generated from this sale were $225,000, which was 80% of total revenues for the quarter and represented 94% of the accounts receivable balance atMarch 31, 2002.”
Who are these customers? Even though Stratabase is not obligated to list every single customer they have, Stocklemon believes that the shareholders have a right to know the names of at least one customer. Furthermore, how much can support for open code software cost? Can it really be $1.5 million for one customer? Not one relationship listed by the company seems easy to get our hands around, therefore, it is difficult to make any definitive statements about the business. Is this intentional?
Scott Fraser
This is not the first time that Stocklemon has confronted a promotion by Natural Contrarian Newsletter publisher Scott Fraser. Mr. Fraser was one of the promoters of Energy Power Systems. Stocklemon initially profiled Energy Power Systems at $5.90, it currently trades at $1.30 . It seems as if the SEC has finnally caught up with Scott Fraser and his shenanigans. Mr. Fraser might have been lying the whole time about his terrific returns and has not cooperated with the SEC in its investigation. Is it any surprise that he would be one of the promoters behind Stratabase. Stocklemon hopes that the government fraud unit forces Scott Fraser to reveal the true nature of his relationships with stocks like Energy Power Systems and Stratabase. This link below is a must read for all you Scott Fraser fans.
http://www.sec.gov/litigation/litreleases/lr17639.htm
Conference Call
Stockelmon would like to have Stratabase host a conference call that will be paid for by Stocklemon. We believe there are some key issues that must be addressed to the shareholders, such as:
1. Which three companies paid for services with publicly traded securities, and what was the true value of those services?
2. Why has the company retracted a bulk of the press releases issued over the past year?
3. What is the nature of the relationship with stock tout Scott Fraser?
4. Who are the customers of Stratabase?
If Stratabase contacts Stocklemon, we will gratefully post the date and time of the conference call.
Conclusion
Some companies are publicly traded with good intentions and become lemons because of bad execution of a business plan. Unfortunately, Stocklemon is of the belief that Stratabase is not one of them. Stocklemon believes that Stratabase was never developed with the intention of creating a successful software company but rather it was created with the objective of crafting a vehicle that will separate an investor from his/her money. C’mon Stratabase, at least Worldcom and Adelphia provided a service while they were in business.