Stocklemon Reports On Spear Jackson. Part 2 (OTCBB: SJCK.OB)
Since the last report on Spear Jackson, Stocklemon has received a plethora of correspondence from employees of Spear Jackson, tool executives in the UK, and stockbrokers who have been talked into buying this stock from International Media Solutions. While maintaining dignity and refraining from publishing information that would put people in jeopardy, this report will attempt to further on what has been established in Part 1.
Pension Plan Blocked From Employees
In the first part of this story, we mentioned how it was never explained by the company how a $31 million liability magically turned into a $15 million asset with one swoop of the accountants pen. Stocklemon believes that if such a transaction were legitimate, the company would have footnoted the filings and explained the change. In this case..nothing. We have now learned that the people who work for Spear and Jackson have their pension plan BLOCKED FROM ALL TRANSFER. Click here for a letter sent to all employees the blocks the transfer of pension funds. Don’t forget, this is a company with no pension committee. (0096vz.pdf)
Spear & Jackson Lose Their Largest Customer
Toolbank was by far Spear & Jackson largest customer for 30 years. Yet, Crowley decided they became an unnecessary evil. Because Toolbank is a distributor of tools, SJ could not put out a news announcement every time a sale was made, maybe real business got in the way of a stock promotion. In one emotional phone call, SJ wiped out its largest customer. Please read the below link for full explanation.
Our sources tell us that without the orders from the Toolbank account, SJ is going to have an abysmal 4th quarter and no hope for a real future in the tool business.
Toolbank has a 100+ sales force and distribution centers nationwide. The loss of them as a customer is not only devastating on the financial position of the company immediately, but it also will make other distributors hesitant before placing orders with Spear Jackson for the future.
Rumor has it that there might be an impending lawsuit between Toolbank and SJ. It seems as if SJ has dumped over £2 million of product on Toolbank that they contractually must take back but they have refused to.
Defection of Employees
Since Dennis Crowley took over, many of the senior management resigned or got fired. It seems as if nobody wanted to be a captain on the Titanic. Below is a list of the senior management of SJ and the fate they faced. It has come to the attention of Stocklemon that if you ask too many questions about business, you are shown the door. Therefore, SJ is currently lacking any seasoned executives.
Steve Barnes , National Accounts Controller ( Resigned )
Jim Murphy , Export Controller ( Resigned )
Rachel Corton , National Accounts Manager ( Resigned )
Richard Carr , Key Accounts Manager ( Resigned )
Steve Derbyshire , Sales Director ( fired )
Paul Lamb , Managing Director ( fired )
Ian Askwith , MD of Eclipse Magnetics , ( fired )
David Wolstenholme , Group MD ( fired )
Mike Taylor , National Sales Manager ( fired )
Pat Lynch , National Accounts Manager ( Resigned )
John Crawley , Sales Representative ( Resigned )
Martin Hume , Sales Representative ( Resigned )
International Media Solutions (IMS)
Stocklemon has received much correspondence from stockbrokers around the country telling us about the barrage of phonecalls they have been receiving by IMS regarding purchasing stock in Spear Jackson, among other companies that IMS represents.
Since our last report, complaints have been filed against IMS by many of these brokers with the NASD, SEC, and Florida State Department of Securities. Again, it cannot be understated that the phone people in the IMS boiler room get paid per transaction, therefore, they violate SEC law that was established in the first report. Stocklemon still believes that this is a time bomb waiting to explode.
Crowley Barred from the Securities Industry
On July 11, 2003, writer Carol Remond wrote in the Wall Street Journal online that Dennis Crowley had been barred from the securities industry for unauthorized trading in a customer account. Although this is not a mandatory disclosure, Stocklemon questions if the “phone chimps” at IMS are telling this to the brokers to whom they are speaking.
Who Cares Press Releases
Stocklemon believes that Crowley has made it clear to his management that press releases will be the key to success for the company. Sounds like a stock promotion to us.
An example of abuse of a press release is evident in the July 7, 2003 press release where the company announces a deal between Eclipse Magnetics and Kelloggs. This is a deal that has been in place for many years and is a small net sale (less than £15k per year). This is neither newsworthy nor will it ever have a material affect on earnings. http://biz.yahoo.com/bw/030707/75226_1.html
In a most recent press release, SJ confirmed earnings for the third quarter. We warn all shareholders to take this with a grain of salt. Whether it is deferment of liabilities or channel stuffing, we must remember that these numbers come from the same people who have created the promotional machine that we know today as Spear Jackson
We recommend that all shareholders not just look at the press releases, but press management to show how these releases will ever affect the bottom line.
Conclusion
Stocklemon believes there might be a future for Spear Jackson, but not as a public entity and not under current management. According to Stocklemon’s valuation, the company was sold to Mega Pro Tools for around $1.2 million U.S. In the past year, the reputation of the company has been damaged within the industry and we believe the company is not current on its liabilities. But being generous and forgiving, we will now say that they company is worth twice the amount of the purchase..$2.4 million.
Therefore, the stock would be worth a price of .17 Cents per share.. See ya’ there.
Stocklemon Reports on Anscott Industries (OTCBB:ASCT)
| stock ticker: ASCT | ||
 |
      |
|
Anscott Industries (OTCBB:ASCT)…Don’t Get Taken to the Cleaners !!!!!
Recent market gains have propped up some battered and bruised portfolios, and investors are slowly returning to the trough. However, as always happens, this is a call for promoters to get busy dusting off old shell deals and looking for the kinds of stories that they can sell to naive bargain hunters and get-rich-quick speculators.
Liquidix Inc. is one such dusty shell. This flash-in-the-pan promotion of 2001, which dissolved within weeks of being touted by a fax promotion letter called “The Wall Street Alert”, has remade itself into Anscott Industries (ASCT.OTCBB). Thanks to a renewed fax tout campaign, Anscott has quickly ballooned to a market cap of roughly $200 Million. (based on just under 50 Million shares and a recent $4 price).
It is our opinion that this valuation is ridiculous for a company that as of their last filing has a little more than $10,000 in cash and more importantly
Owes the IRS $463,000 in back payroll taxes.
Attention Anscott Shareholders !!! This is your 4 million-share business consultant.
http://www.hcso.tampa.fl.us/pub/default.asp?/Online/qdisp/bn=96019260
In spite of a new project, and a new board of directors, there appears to be several things that Anscott has in common with its predecessor. According to an S-8 filed on May 12, Robert Esposito’s Regal Consulting received 4 million shares of ASCT for “Consulting Services”
http://www.hcso.tampa.fl.us/pub/default.asp?/Online/qdisp/bn=96019260
Where is the 13D?
Esposito owns more than 5%, why has he not filed a 13D?
Yes, this is the same Robert Esposito that rec’d 2.3M shares when this same co. morphed from Learners World into Liquidix in 2001!
http://edgar.sec.gov/Archives/edgar/data/1047733/000104653201500209/0001046532-01-500209.txt
Wait, they have more in common! Within days of its creation, Liquidix underwent a heavy fax promotion run by a company called Internet Marketing Solutions. They fax-blasted under the name “Wall Street Alert”. Turns out that Internet Marketing Solutions was registered by Robert Hainey, an associate of Esposito’s. In fact, it is based at Esposito’s address:
In fairness to Mr. Esposito he has not been charged by the SEC in the past with any securities violations. However, along with running Internet Marketing Solutions, he is known to run pornography websites such as Connexxxions.com (link not included due to extreme nature of content).
This time around, ASCT is being promoted by a fax tout similarly called “The Wall Street Bulletin”. The format of the fax is virtually identical to the earlier Wall Street Alert, only this time the disclaimer is virtually empty. Good chance this is the same modus operandus, Esposito and friends hold the bulk of free trading shares, and unload their stock into the buyers created by the fax touts.
I suppose this could all be co-incidence. But one thing can be said, with no doubt: no honest businessman would knowingly allow his company to be part of this dirty shell. After all, the predecessor company was the subject of a stock manipulation scheme that involved none other than thrice convicted securities violator Alan Z. Wolfson!
http://www.sec.gov/litigation/admin/33-7865.htm
We’re not aware of any current involvement of Mr. Wolfson. However, Wolfsons’ nephew, lawyer Richard Surber, also rec’d shares in Liquidix, according to filings.
What exactly is Anscott Industries? It is a small company that manufactures and sells specialty chemicals, cleaning agents, odor eliminators and other treatments and processes used in the laundry and drycleaning industries. According to recent filings, the company has sales of under $2.5M/year and has been losing
roughly $1M/year for the past 2 years. So why does this tiny company with shareholders equity of $51,000 and a working capital deficit of $300K currently have a market cap of $200 Million?
Could it really be because of the revolutionary new product announcement of June 5th?
http://biz.yahoo.com/prnews/030605/nyth047_1.html
Stocklemon believes it is because of a good stock promotion
Who else is involved?
In a brief press release issued on Apr. 28, ASCT announced a new board of directors, but more importantly, a new contact for shareholder relations, a Mr. Frank Zingara.
Frank Zingara:
Initial searches to find out more about Mr. Zingara were a dead end, until we did further searches on the telephone number provided. This led to a tiny building in Glenwood Landing, New York, which houses several businesses run by a Frank Zangara. Ah, the old spell-the-name wrong trick!
He is also associated with BHI Group, and Glenwood Marketing Association, as shown in this filing:
http://edgar.sec.gov/Archives/edgar/data/855372/000109000202000237/0001090002-02-000237.txt
There is also a stock tout firm in this very busy little building:
http://www.stocktraderspress.com/homepage.html
Zingara was involved in an insider trading scam where brokers paid off an employee of Business Week magazine in order to trade on non public information that was about to be printed in the “Inside Wall Street” Column.
You can read all about it here:
http://www.sec.gov/litigation/litreleases/lr16047.txt
And here are a few more stories about Mr. Zangara’s escapades:
http://www.nyse.com/pdfs/95-011.pdf
http://www.nasdr.com/rca_winter01_dis.htm
Well, it’s no wonder that Mr. Zangara has been removed from more recent press releases. But there’s more. On May 28, the company issued a press release touting a deal with its new customer, Digital Online:
http://biz.yahoo.com/prnews/030528/nyw021_1.html
This one wins the award for most far fetched press release that this reader has ever seen! What on earth is a technology company doing buying products from a specialty chemical company? Is there some other kind
of link? The answer is yes.
Zangara’s own Glenwood Marketing Association has the same address
and phone number as ASCT customer Digital Online! That is some co-incidence!
http://www.lidesktopnews.com/contact.htm
Back to the company for a minute….the press release says Homeland Security…hmmm Homeland Security???? Say it ain’t so! ASCT is a Homeland Security play as a result of its’ new fire retardant product?? As far fetched as this notion is to begin with, we’ve done some reading, and find absolutely not one mention of ASCT’s hot new product Xpel Fabric Protector except in the press release announcing the hot new product. There is a similarly described product on the website of its operating subsidiary:
http://www.caledchemical.com/finishes.htm
It does not appear to be anything new or revolutionary. The web site has not been updated since February 2003, so why the press release on June 5th announcing the launch of this new Xpel Fabric Protector? It appears to be nothing more than a renaming of its old product called Flame Fighter:
http://www.caledchemical.com/cis/Flame%20Fighter.htm
There are plenty of companies that are advertising very similar products:
Conclusion
With all respect to Mr. Jack Belluscio, the President, CFO and Chairman of ASCT, who in fact may be a veritable expert in his field, and who rec’d 44 MILLION shares of Anscott in the reverse merger (we wish Mr. Belluscio all the luck in the world in realizing the $160 Million of current value in his shares once the trading restrictions are lifted), it is our belief that the co. has no valuable new product, and that ASCT is nothing more than a stock promotion that will collapse just like its predecessors. So be careful, and Don’t Be Taken to the Cleaners.
Stocklemon Reports On Spear Jackson. Part 1 (OTCBB: SJCK.OB)
In the early part of the twentieth century, cult figure Aleister Crowley reintroduced the world to black magik and devil worship. Aleister relished in his self proclaim title, “Wickedest Man Alive”. In the early part of the twenty first century, we have a new Crowley upon us, Dennis Crowley. This Crowley also does magic, he has an uncanny ability to make shareholder equity disappear. Dennis Crowley is the notorious stock promoter who is currently the CEO of Spear Jackson Industries. Stocklemon believes that Spear Jackson is an over hyped stock that is setting itself up to disappoint both its investors and its employees.
Spear and Jackson
Spear and Jackson is an old-line tool company that has a history but has faced recent troubles due to the competition in the tool market for less expensive imports and declining margins on exports. The former owners of Spear and Jackson, US Industries, has been trying to sell this business for over a year before Crowley came in, but no one wanted to buy it. Then, on September 6, 2002, Spear and Jackson was basically given away to Dennis Crowley for 3,543,281 shares of a shell with no trading history and assumption of a note for 150,000 pounds. If we assess the price of the stock at the same price that Crowley bought stock on the same day, the purchase price of Spear Jackson was just north of $1 million.
On the same day the deal was closed, Crowley financed the company with $2 million dollars in exchange for 6,005,561 shares (35 cents a share).
Let’s be Realistic Here
Being generous, Stocklemon will say this company was sold $1.2 million (we are not discounting for the illiquidity of the shell). This sale number was determined by an Independent Valuation done for a US Industries, a NYSE company. Therefore, we can assume that the $1.2 million figure is fair and reasonable if not generous because the stock was basically worthless.
It is 9 months later and now the company has a market value of $183 million.
If Dennis Crowley were the CEO of the Year and should be placed in the CEO Hall of Fame then maybe he would increase the value of the company by 100% in 9 months. If he did 200% he would be a business god. But to have the value of the company increase to $180 million in 9 months, it is the opinion of Stocklemon that he is just a damn good stock promoter. After all, why could he not spin this magic with Mega Pro, another tool company, before the Spear Jackson acquisition? Has he been saving all of his “business savvy” for this deal, and was afraid to make anything good happen in the plethora of “dog” stocks he was involved in the past?
C’mon Folks, we all know that Crowley is not a “tool” guy. He is a stock promoter who likes to race Ferraris.
The $50 million Question.hold on to your hats.
On January 13, 2003, Spear and Jackson filed a 10k that was signed off by their former accountants BDO Dunwoody, a respected firm out of Canada. In this filing, the company shows a pension fund liability of $30.771 million. Five months later the company amends the 10k but this time uses the accountants of Sherb and Co. (who we will go into later). This time the same 10k show the pension fund as an asset of $14.962 million. How Can This Be?
Why would US Industries sell a company with $15 million in assets for shares in an OTC shell? They wouldn’t. But they would sell a company with a huge pension liability
Stocklemon believes that the answer to this is simple..FUZZY ACCOUNTING. The best part of the whole filing is that change was made without even a footnote as to how a liability becomes an asset. I guess Crowley is a magician and poof can turn a 30 mil dollar liability into a $15 mil dollar asset.
Stocklemon is concerned about the people who work for Spear Jackson who might have their pension fund at risk, as the company is not paying down as much as they should because they recorded the pension as a net actuarial loss. Many employees have worked for Spear Jackson for years, and to have their company being run by a stock promoter is not giving dignity to their job or more importantly stability to their pension.
It gets better….Crowley has no one to answer to because as written in their filings, the company does not have any committees.
NO AUDIT COMMITTEE
NO PENSION COMMITTEE
Accountants
In order to judge the validity of the numbers that are currently being presented by Spear and Jackson, we must rely on the credibility of their accountants Sherb and Co, which classifies themselves as, “Among Top Auditing Firms in the US” www.sherbcocpa.com/pages/1/index.htm
We don’t see them here. http://www.toptenlinks.com/Finance/Accounting/Firms/index.htm
Funny, we did not know they were that big. Actually, the CFO of the former parent of Spear and Jackson had never even heard of Sherb and Co. Maybe that is because the majority of Sherb’s clients are OTC companies that trade below .25 cents. Stocklemon’s favorite client of Sherb is WYRE, the boiler room stock of Adnan Kashoggi and Regis Possinno.
It Gets Better…
Among other complaints, Sherb is currently a co-defendant in a class action lawsuit filed against pink sheet companyVoiceFalsh Networks. In the complaint, Sherb is charged with misrepresenting and inflating the numbers for VoiceFlash.
http://www.rabinlaw.com/complaint-voiceflash.pdf
Crowley’s Old Deals
All of the companies listed below are companies (and their current price) that we believe to have involvement from Crowley. Let’s see if it is a record of building companies or destroying companies.
1. GSFT- .18
2. CPCY- .07
3. ISOB- .10
4. ERAW- can not find anywhere
5. SHAR- .25
6. BMAL- delisted
We have saved our favorite for last.Beverly Hills Limited.
(BTLD .0008) Crowley was the largest shareholder of BLTD and the CEO was his good friend Mark Barhonovich. The Investor Relations Contact was a woman named Yolanda Valaquez.
Barhonovich has since been charged by the SEC for Fraud. http://www.sec.gov/litigation/litreleases/lr17721.htm
And Yolanda..well read below
International Media Solutions
During the past two months, Stocklemon has been reporting on the relationship with Telkonet and the Orlando Boiler room International Media Solutions (IMS). IMS has been busy working the phone for Spear Jackson, calling any stockbroker that will hear their story.
International Media Solutions is owned by Yolanda Valaquez..Yes the same Yolanda Valaquez who “worked” his Beverly Hills Limited (BLTD) stock which went from a $12 to its current price of .0008 http://www.sportsbyline.com/news8.htm
Stocklemon believes that the relationship between Crowley and Valaquez is now extended beyond a simple stock promotion and has turned into an enterprise. A pattern is forming with the way they sell stocks to the public.
The boiler room business is not for long and Stocklemon believes that the walls will be closing in around International Media Solutions in the near future. Just last month, the SEC cracked down hard on an Orlando based boiler-room Corporate Relations Group. According to SEC documents,
The Court further held that CRG violated Section 15(a) of the Exchange Act by acting as an unregistered broker. CRG directed its sales force to contact registered representatives and encourage them to pitch the securities of CRG’s clients to their customers. Then, once the customer bought the security, CRG’s sales personnel would submit proof of the purchase to CRG and collect compensation based upon the transaction. Similarly, the Court found that CRG and Stratcomm violated Section 15(a) by acting as an unregistered dealer. The Court determined that CRG acted as a dealer by buying and selling securities for its own account through its Costa Rican nominees, Fondo and Oportunidad, and that Stratcomm acted as a dealer by selling approximately one million shares of its common stock to the public and buying stock from other investors to make delivery to the new investors. http://www.sec.gov/litigation/litreleases/lr18161.htm
Stay Tuned for Part Two
Part two of this report will focus on the business of Spear Jackson and how it has not grown in comparison to stock price. Furthermore, the report will focus on the how earning are being created by SJ by accounting tricks.
Conclusion
A chain is only as strong as its weakest link. In this case there are many weak links that might crack soon. Stocklemon would like the government to look into the accounting of this company and force them to explain to their shareholders and their employees the status of the under funded pension. Do the people involved with this company live in a cave? Do they not watch the news? Do they not see the importance of corporate governance? Yes, the hands of the law do work slowly, but Stocklemon believes when the game is all played out, we might have a new Wickedest Man Alive.