Top Shelf Brands Holdings Corp. (DKTS)

[Carini]

Microcap Fraud

http://investor.gov/investing-basics/avoiding-fraud/types-fraud/microcap-fraud#.VMpmVWjF9IY

Information is the investor's best tool when it comes to investing wisely. It may be difficult to find accurate information about microcap stocks (i.e., low-priced stocks issued by the smallest of companies), including penny stocks (i.e., the very lowest priced stocks). Many microcap companies do not file financial reports with the SEC, so it can be hard for investors to get the facts about the company's management, products, services, and finances. When publicly-available information is scarce, fraudsters can easily spread false information about microcap companies, making profits for themselves while creating losses for unsuspecting investors. Here's how some fraudsters disseminate false information about microcap companies:

Paid Promoters. Some microcap companies pay stock promoters to recommend or "tout" the microcap stock in supposedly independent and unbiased investment newsletters, research reports, or radio and television shows [oh hello, tommorowsbluechips, how's WOPR?]. Paid promoters are often behind the unsolicited "junk" faxes, e-mail messages, online advertisements or high-end glossy mailers you may receive touting a microcap or penny stock company. The federal securities laws require the publications to disclose who paid them for the promotion, the amount, and the type of payment. But many fraudsters fail to do so and mislead investors into believing that they are receiving independent advice.

Internet Fraud. Fraudsters often use aliases on Internet bulletin boards and chat rooms to hide their identities and post messages urging investors to buy stock in microcap companies based on supposedly "inside" information about impending developments at the companies. For more information about Internet fraud and on-line investing, read Internet Fraud and Tips for Online Investing: What You Need to Know About Trading in Fast-Moving Markets.

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Questionable Press Releases. Fraudsters often issue press releases that contain exaggerations or lies about the microcap company's sales, acquisitions, revenue projections, or new products or services. These fraudulent press releases are sometimes then disseminated through legitimate financial news portals on the Internet.

If you are considering investing in a microcap company, watch out for these “Red Flags”:

* SEC Trading Suspensions [DTC Chill? Check.]
* E-mail and Fax Spam [Paid Twitter and email promos? Check.]
* Assets are Large but Revenues are Small [$258,922.79 in undisclosed "inventory"? $275,000 in undefined "intangible assets"? $86, 538.43 in "general administrative" expenses that doesn't include all the other administrative expenses listed? Check, check, and check.]
* Odd Items in the Footnotes of Financial Statements [uh huh]
* Unusual Auditing Issues [yup]
* Insiders Own Large Amounts of Stock [you betcha]

But don't worry about all these red flags. $DKTS is different. It's the one!