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Know what you own; this is what I wrote several years ago. Once the pump began at the end of 2014, hundreds of millions of shares were dumped, and the stock price fell off a cliff. (Originally there were more pictures, but I left them out.)
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Do penny companies and penny players need a new "stock exchange"? John P. Correnti of Grand Capital Ventures (GRCV) and John D. Jarvis of CP Incorporated think so. On 12 December 2014, they officially announced the creation of the "OTC Exchange," which they said would be ready to launch in the first quarter of 2015. A few days later, a lengthy update explaining that work on the exchange's server room was nearly complete appeared in the "Editor Thought's [sic]" section of Claire Magazine, an online publication owned by Jarvis's CPI. In addition to excruciatingly bad grammar and painful punctuation, the update featured several photos of the server room and its equipment.
Mysteriously, the impressive-looking power circuits illustrated are British standard, unsuitable for use in the United States. The reason they're British standard is that the photo has been pinched from the website of a firm called 3 Link Company Limited. 3 Link is located in the Perfect Industrial Building in Kowloon, Hong Kong.
Even the photos of workers painting the "CPI server room" come from a section of the 3 Link site called "Painting & prettifying of server room inside." Clearly a different kind of "prettifying" has been done by Jarvis and his associates.
The only photo in the update not purloined from 3 Link is one of a few servers. That was taken from the site of an engineering and contracting company called BC Comfort, which, not unexpectedly, is located in Burnaby, British Columbia.
So much for the "3 million dollar" server room. CPI has failed to demonstrate that it exists. But let's play along: if it does exist, where might it be located? Until about a week ago, the only address given was for the "CPI Corporate Regalations [sic] Contacts:” Samantha Jameson, at 21 Waterway Avenue, Suite 400, the Woodlands, Texas 77380. Texas makes sense; Jarvis lives in the state, and can be associated with several addresses in the Houston area. Jameson's phone number, however, has a Dallas area code. Not to worry: in the age of mobiles, one could be anywhere, really.
Ten days ago or so, a friend found himself in The Woodlands on business. By coincidence, he had a dinner engagement at a restaurant in the building where "Corporate Regalations" was said to be located, and decided to do some sleuthing.
The area is nice, and so is the building. It houses a number of businesses, none of them called CPI or Grand Capital Ventures.
Our friend enquired at Businessuites, which provides virtual offices, but they had no clients that seemed to have anything to do with GRCV. Businessuites does not, however, inhabit Suite 400, so he tried there. Suite 400 is occupied by a firm called Waterway Wealth Management. Waterway Wealth Management is a Texas LLC whose manager is Daniel Paul Michalk; it and he are unrelated to John Jarvis. When the subject of Grand Capital Ventures, CPI and John Jarvis was raised, Amelia Weber, an employee, asked if our friend had come to complain about having been defrauded. He gave her Samantha Jameson's phone number, in case she wanted to register a protest about the misuse of her employer's address.
Coincidentally or not, a few days later a new and rather less upscale address appeared on the Claire Magazine contact information page: FM 3083/Teas Rd at Plantation Dr, Suite 100, Conroe, Texas. Images supplied by Google Maps don't make an identification of the specific building possible. Perhaps that's the idea.
The new contact info page does offer a location for the OTC Exchange itself. It is "33rd street and Madison ave, Manhattan, NY 10016." Manhattan is, of course, a borough of New York. It is not a city, and does not appear as part of Manhattan addresses. Neither is it helpful that all we're told is the intersection at which the exchange is supposedly located.
It's even less helpful that in the 14 December "update," the "CPI Technology campus" is said to be "Texas-based." Funny, the photos suggest it's "Kowloon-based." And not owned by CPI.
The OTC Exchange
While the OTC Exchange is unlikely to spring up in the heart of Murray Hill, a largely residential neighborhood, it seems that Jarvis and Correnti do intend to create some form of informational service that will also operate as a brokerage. As will be seen, GVRP is now the proud owner of two small broker-dealers. When the exchange was first announced on 12 December, the company said it would "offer unprecedented access to real-time, news, quotes, and interactive trading," adding that "these services have never been offered in one place at one [sic]," which will come as news to most online traders.
So far, it sounds like any online discount brokerage. But Jarvis has a hook that makes it much more fun: SIMPLETIER™. (A trademark search at the USPTO site turns up no mark for "SIMPLETIER," but no doubt it's the thought that counts.) GVRP's explanation of SIMPLETIER leaves a lot to be desired--"This simple and straight forward [sic] disclosure mythology [sic] will bring the transparency into the 21st century and free the companies from the prehistoric process that has been common place [sic] in the [sic]"--but the idea comes through: SIMPLETIER will make life easier for people too impaired to understand OTC Markets' tier system. It will feature only two levels of disclosure, compliant and non-compliant. Compliant with what? OTC companies that are SEC registrants must comply with the reporting requirements of the Securities Exchange Act of 1934. Pinks have no reporting obligations at all.
Perhaps Jarvis hasn't yet quite thought this through, but he believes his new system will "stop the confusion by removing levels of confusion and clearing up the transparency so that issuers, shareholders and traders are finally on the same page." Though it's difficult to see how transparency can be "cleared up," the intention is, we're told, noble. "Transparency is the bedrock of democracy," explains Jarvis.
Whatever the OTC Exchange will be, it will not be an exchange. As its name suggests, it's chiefly about OTC stocks, which is to say stocks that trade over the counter rather than on a stock exchange. Neither will it offer an electronic inter-dealer quotation system like OTC Markets' OTC Link. The OTC Link platform--formerly known as Pink Link--took many years to develop, and is now an SEC-registered Alternative Trading System (ATS). Market makers who want to trade OTC issues are dependent upon it, and that will not change, whether Jarvis and Correnti's new venture gets off the ground or not.
So the OTC Exchange will offer nothing to MMs. It claims it offers "affordable cost's [sic] to the OTC Markets issuers and it's [sic] traders." What really seems to be planned--at most--is just another discount brokerage that may feature low costs for traders willing to risk their money. But what will it offer those issuers? The company says it's formed a "partnership" with QuoteMedia and QuoteStream that "allows corporate clients as well as their customers to license comprehensive financial market information and software applications for significantly reduced costs compared to the expensive and outdated infrastructures from other providers." It's hard to say what that gibberish means, though we can be sure OTC Markets is chief among those "other providers."
QuoteMedia is in the business of selling data, and it may provide services to OTC Exchange. A GRCV press release from 19 December explained that the work currently being done was called "Project Aurora," and was being directed by CPI's CTO Matt James and QuoteMedia's John Lazzarino. Lazzarino declined to comment on QuoteMedia's specific role.
Grand Capital Ventures
Until November 2012, Grand Capital Ventures was known as Crowne Ventures (CRWV). We most recently wrote about CRWV in June 2014. It was, among other things, the subject of an Awesome Penny Stocks pump and dump in the summer of 2011. Crowne was at that time a purported junior gold miner active in Mexico. Its CEO was Dane Peterson, owner of a few leased properties in Nayarit province. Predictably, the stock crashed and burned. Peterson eventually gave up on the shell, and moved his Mexican assets to a new entity called Mining Minerals of Mexico (WIIM). We reported on WIIM's unannounced 1:100 reverse split in August 2014. Shortly before that, the company changed its name to Aurum Resource and Asset Management, Inc.; the ticker later changed to ARMI. Though the properties to be exploited were the same, the company's sole officer was by then one Shane Lowery, who was a 49% beneficial owner, along with an entity called Rowett AG. Peterson had disappeared without explanation, but that is a story for another time.
When Peterson decamped from CRWV, he sold the shell to E. G. Marchi. Marchi's first official act was to effectuate a 1:10,000 reverse split, wiping out the investments of current shareholders. In the new company's initial disclosure statement from 15 November 2012, Marchi described its business as precious metals mining in Mexico, but on 12 February 2013, he announced a joint venture with WBC Holdings, Inc., a Michigan entity specializing in licensed products in the renewable energy and green technology markets.
William White is a key man at WBC, and with the joint venture agreement he became the new CEO of GRCV; he was a control person as well. White is well known in Pennyland; he's headed up a number of sleazy public companies, among them Andiamo Corp. (ANDI) and Hi Score Corp. (HSCO). Trading in HSCO and a sister company, Olie Inc. (OLIE), was suspended by the SEC almost exactly a year ago, for "questions regarding the accuracy of publicly available information about both companies' assets, acquisitions, business activities, control person, securities offerings, and financing arrangements." Part of the problem was a fraudulent bond offering we wrote about a month before the suspensions.
There was soon a change of plan at GRCV. White left as CEO, and on 9 October 2013 sold the control block of Series A preferred shares he'd received when he took office to a Florida company called Corporate Excellence Consulting (CEC). CEC assigned the shares to Cortney Talley, its president and a director. CEC was incorporated by Janice Zoyes in 2009; its corporate charter was then allowed to lapse. Zoyes reinstated it in 2011; since October of that year, it's used an address that would later be shared by Grand Capital Ventures: 10778 NW 53rd Street, Sunrise, Florida 33351. In November 2011, Zoyes resigned as secretary. She remained as a director; Dominick Falso was appointed COO, and Peter Ruggeri as CFO. The following February Talley replaced her as a director and as the company's registered agent. Among other things, CEC takes small businesses public.
Janice Zoyes is the wife of Michael Zoyes, and the mother of Cortney Zoyes Talley. The Zoyeses have a long and unsavory history. Back in 1995, the couple was sued by the Federal Trade Commission in a business opportunity fraud case involving "Dr.'s Choice" diet pills and other vitamin products. Michael Zoyes was also convicted of racketeering in 1987--he'd been running a boiler room--and of criminal fraud in a telemarketing scheme in 2001. He served prison time for both crimes. Zoyes preceded White as CEO of HSCO. At that time, Pete Ruggeri was CFO, and Dominick Falso was COO.
You'll recall that White left GRCV in October 2013, selling his control position to CEC. The company's domicile was moved from Nevada to Florida on 28 October. No announcement was made, but Michael Zoyes had taken over as president, CEO, and director. There were no other officers. On the same day, Grand Capital wholly acquired CEC and its subsidiary DMD Lighting & Energy Control Systems Inc. GRCV fell silent, filing nothing with OTC Markets between November 2013 and November 2014. At the end of April 2014, John Correnti had become president and CEO. Cortney Talley was added as secretary in October. At the same time, GRCV amended its articles of incorporation, designating several series of convertible preferred stock.
John P. Correnti
It should by now be clear that the people involved with Grand Capital Ventures and a host of other very bad penny companies are long-time business associates. Michael Zoyes has officially left the picture, perhaps because his criminal past is too well known for comfort, but he's represented by his daughter Cortney. John Correnti, brought in as CEO less than a year ago, has past ties to the group.
He was perhaps chosen for the job because of his experience as a broker and as a public company executive. Correnti is CFO of Banneker Inc. (BANI), a pitiful no bid Pink with 10 billion shares outstanding. BANI's president is William White, and Cortney Talley is a director. He occupies the same position at Alaska Pacific Energy Corp (ASKE), which has taken money from nearly every toxic funder working in Pennyland. The company did a 1:2000 reverse split in October 2013, and has diluted its shares outstanding back to 8.2 billion in little more than a year. ASKE's president is Dominick Falso, and Talley--no doubt once again fronting for her father--is a control person. Finally, Correnti is chief information officer and vice president of UCP Holdings, Inc. (UCPH), an indescribably dicey outfit that's now merely a shell he and other members of management hope to sell.
He joined UCPH in November 2013. His hiring may have had something to do with the proposed purchase of the company by none other than OLIE, which was announced at the end of the following month. OLIE was in acquisition mode at that time; the intention of its CEO, Canadian attorney Robert Gardner, was to buy a large number of worthless OTC companies using convertible preferred stock as "currency." ASKE was to be another of those acquisitions; Falso, its president, told his shareholders on 9 January 2014 that Gardner was in the process of drafting a letter of intent. On 22 January, Falso announced that ASKE had completed a memorandum of understanding to "rehabilitate, restructure and revive" Grand Capital Ventures, for which undertaking it would be given convertible preferred stock in ASKE. On the same day, the SEC suspended OLIE and HSCO. It was not until the end of April that Falso got round to telling his faithful--if he had any left--that plans to become a subsidiary of OLIE were off.
Correnti became a broker in 2007, and went to work for a the Cleveland office of a firm called MVP Financial, whose principal offices were in the New York financial district. In February 2014 he joined Arive Capital Markets, a St Paul, Minnesota brokerage. As a registered rep, he didn't badly blot his copybook. A customer complaint alleging mismanagement of funds was settled for $14,990 in 2012. In the same year, Correnti filed Chapter 7 bankruptcy; it was discharged in the following year.
MVP and Arive are important to the story because both are now owned by GRCV. On 21 May 2014--a month after Correnti was hired--the company posted a bulletin in its OTC Markets news section consisting of a board resolution of 16 May memorializing the appointment of Steven Perlstein as a director. Perlstein has been a broker for 19 years, and is the founder and CEO Of MVP Financial. His record with FINRA is, like Correnti's, not seriously problematic, though he was caught up in the customer dispute involving Correnti. On 16 June, Grand Capital purchased MVP Partners, Inc., though that was not revealed until 6 October. In the relative announcement, the entity is called "MVP Partners, Inc."; in an OTC Markets filing from the next day, it's called "MVP Partners Corp." In both documents it's said to be a Wyoming company. Is it? Not according to the Wyoming Secretary of State. A query there turns up no MVP Partners of any kind. There is an MVP Financial Inc. It was incorporated on 8 May 2014 by Dominick Falso.
Along with MVP Partners, whatever it may be, came MVP's only asset, MVP Financial, LLC, which is described as a "licensed Broker Dealer and a member firm with FINRA and SIPC." According to Broker Check, MVP Financial is controlled by Perlstein through his MVP Partners. GVRP paid Perlstein "5 shares of Series B Anti-Dilutive Convertible Preferred stock priced at $2.50 per share." Each of those shares is convertible into 100,000 shares of GRCV common.
On 26 August 2014, Grand Capital bought a second brokerage, Arive Capital Markets. It was the only asset of Arive Holdings, LLC, a Minnesota company. In this case, GRCV purchased only 75 percent of the issued and outstanding shares of Arive Holdings. The form and amount of payment were not disclosed, though it was noted that FINRA approval of the acquisition would be required.
Enter John D. Jarvis
Grand Capital Ventures styles itself as a business that "specializes in working with under performing companies and bringing together the resources needed for them to attain financial stability and growth." To fulfill that objective, it needs to have more than one string to its bow. On 8 October, it issued a press release briefly explaining an initiative to be undertaken with CP Incorporated to acquire "certain internet assets… in the Marijuana Internet space."
Strangely, the press release leaves some doubt about who will be buying what. Our best guess is that the idea was for CPI to purchase some marijuana-specific internet domains from GRCV. John Correnti pointed to CPI's "technical expertise" in the sector, and the release's "About CP Incorporated" section informed readers that one of the firm's flagship web properties was 420 Newswire.
CP Incorporated appears never to have been registered under that name; searches in the obvious state databases turn up nothing . Interestingly enough, though, "Claire Peetz, Inc." was formed in Florida on 13 November 2014; its incorporator was William White, and its president and director are John A. Jarvis. Correnti serves as the resident agent. CPI has no website of its own; it releases its news through the blog section of Claire Magazine. That information can be located, more or less, at the bottom of the right-hand column at the site. Except for the blog, Claire Magazine is an aggregator; it hosts a hodgepodge of news, including gems like "Man Explains Why He Cut Off His Penis." Claire Ann Peetz herself occasionally contributes commentary on the wonders of CPI, breathless chatter about celebrities, horoscopes, and Bible verses. Clearly the relationship between CPI and GRCV is closer than the companies have let on in their individual communications.
While John Austin Jarvis is CPI's president and director of online operations, the Jarvis most often mentioned in announcements about the OTC Exchange is John D. Jarvis (a.k.a. John D. Jarvis, Jr). In the 14 December update on the "server room," he's described as the "newly dubbed 'Bad Boy Of Wallstreet [sic].'" He's never had anything to do with the real Wall Street, but many would argue he's indeed a bad boy.
Jarvis is from the Houston area, and claims experience in strategic marketing and sales--"with significant emphasis on relationship sales with Fortune 100 companies"--and in internet operations and development. He's best known, however, for peddling hijacked public shells and then pumping and dumping them. He often works with the disreputable Claude Eldridge. Over the years, Jarvis has also used the names Norm Watson and Mike Slate. From time to time, people who say they're victims of his various scams vent online.
Jarvis's first public company appears to have been a Pink called the Jarvis Entertainment Group (formerly JRVE). As grandiose then as he is now, he described it as "spanning the entertainment, virtual reality, network and information technology sectors with its four business divisions." Probably the only one of them that made money was a bowling alley in Tomball, Texas, although another--a "Data Recovery and Collocation facility" said to have something to do with Homeland Security--would play a role in a future scam, Westlin Corp. (WSTN; trading suspended by the SEC on 3 February 2014), a subsequent incarnation of JRVE . Jarvis Entertainment controlled a reporting shell called Cyber Mark (then CMKI) through ownership of its single share of preferred stock. In 2001, Jarvis sold that share to the majority shareholders of Casavant Mining Kimberlite International, Inc. for $235,000. The sale was arranged by "Ian McIntyre," who served as CMKI's CEO and sole director. McIntyre resigned as CEO in 2002, but stayed on as director until the merger with Casavant Mining was complete.
"McIntyre" did not exist. His real name was John Edwards, and he was one of the masterminds of what, after a name change, became known as the CMKM Diamonds scam, arguably the biggest penny stock fraud of the first decade of the century. The SEC sued, and the DOJ prosecution still drags on; Edwards has only recently been extradited from the U.K., where he'd been held in jail since 2009. Jarvis was not an active participant in the shenanigans, but Jarvis Entertainment and John's brother Evan did own stock in the company.
Space does not permit full discussion of Jarvis's many subsequent adventures in Pennyland; his pre-2009 companies are enumerated here. One of them is worth specific mention, though, and that is Grifco International Inc. (GFCI). In late 2004, Grifco effected a reverse merger transaction with Jarvis's LitFiber, Inc. (LTBI). Grifco's Jim Dial took over as CEO, but Jarvis stayed on as a consultant. At the same time, Dial gave Jarvis his Grey Summit Entertainment Group, Inc. (SETI) shell. Grifco was not an SEC registrant, and made only one filing with OTC Markets, but penny plungers bought it anyway. That had much to do with a vigorous spam campaign run by Texas good ol' boy Jack Uselton and his nephew Darrell. Both had participated in the Mountain Energy, Inc. (MTEI) scam in the late 1990s. That time, Jack ran the company, saying tearfully that he was "doing it all" for his grandchildren; this time, the pair simply took stock from companies, spammed, and sold into their own pumps. The companies included Grifco and several of Jarvis's other public entities. The Useltons were sued by the SEC and criminally charged by the Texas Attorney General's office and the Harris County District Attorney's office. The companies who'd paid them for their dubious services were left alone, at least for the moment.
Jarvis's brother Evan Nicolas Jarvis, usually known as "Nick," was part of the scheme from its inception; he was later described by the SEC as a "stock promoter and de facto Grifco officer." When Nick was brought in to assist Grifco, he was already a convicted felon. Nick, Jim Dial, and Alex Ellerman, another promoter, ran a predictable pump and dump, making millions for themselves. The civil and criminal actions against the Useltons and an SEC lawsuit targeting Golden Gate Investors, Inc., a company that bought and resold large amounts of unregistered GFCI stock, indicated federal interest.
In June 2009, Texas Monthly published a long article about the Grifco affair, focusing on the involvement of State Representative Allen Fletcher, who insisted that he was nothing but a victim. Fletcher dealt with both Nick and John Jarvis in connection with another company, and claims he didn't know John had been convicted of felony check forgery in the late '80s. In 2007 the FBI raided the homes of Nick Jarvis and an associate. The U.S. Attorney's Office subsequently filed a complaint against them but withdrew it in the face of an aggressive motion to dismiss.
The DOJ took another shot in 2010, indicting Nick Jarvis, Dial, and Ellerman for conspiracy and wire fraud committed in the course of the Grifco pump and dump. On 1 June 2012, Jarvis was sentenced to five years' imprisonment; he's scheduled for release in August of this year. Once the criminal case was over, the SEC filed its own civil complaint against the co-conspirators, and settled it immediately. John Jarvis is mentioned in the complaint, but was not named as a defendant. During the time the scam was running, Ellerman was writing a novel about stock fraud. He explained in a letter to a literary agent that: "Originally it was a novel… Then something odd happened; the book started coming true… I made a million dollars in a year, out of thin air. I broke rules and maybe a few laws. The way the novel said."
It seems likely that John Jarvis was well aware of his brother's activities; after all, the shell used in the Grifco fraud had been supplied by him. Nick's troubles didn't deter him from running new pump and dump operations. With Nick hors de combat, he chose to work with Claude Eldridge. One of those pump and dumps was Guardian Angel Group, Inc. (GAGI, now REEI). For use in it, he recycled one of his old shells, Pit BOSS Entertainment (PBSS), which had been merged with the Summit Entertainment (SETI) shell he got from Jim Dial. GAGI ran briefly in 2010 and 2011, on a variety of mostly made up "news." Calling himself "Norm Watson," Jarvis hyped the stock through his MakeALick.com site. Interestingly, in 2010 it announced the pending acquisition of Regen Acquisition Corp., which was owned by Henry Jan's Healthcare of Today. The deal fell through, but Healthcare of Today and Jan went on to play significant roles in the SK3 Group (SKTO) and Alternative Energy Partners (AEGY) pot scams, which were suspended by the SEC in 2014. In mid-2011, GAGI's name was changed to REE International. Tom McKay took over as president, and Mike Ceccon was named as the company's only director. More recently, Ceccon was in some way involved in the Amogear (AMOG) fraud, though he was not named in the relative SEC action.
GRCV: The not so perfect storm
Though GRCV posted a slew of updates and announcements throughout the fall of 2014, they appeared only on the OTC Markets news service, and did not achieve wide readership. On 9 October, the company indicated it was aware of that, saying that while it understood it "may not be the most advantageous choice for reaching its shareholder base or potential shareholders… management believes that it is the correct solution for GRCV while the company is in its infancy and developmental growth stages."
To experienced penny stock observers, it looked as if GRCV was gearing up for a massive pump campaign. Brokerages had been acquired, the OTC Exchange had been introduced, and an interest in entering the marijuana sector had been expressed. And then disaster struck.
The stock had been trading thinly for quite awhile. The announcement of the planned OTC Exchange on 12 December attracted some interest, and pushed stock price higher, but volume was still relatively low.
On 23 December, as shareholders were hoping for a nice Christmas surprise, they were handed a large lump of coal. The day before, GRCV had closed at $0.0075 on modest volume of 218,258 shares. On the 23rd, it traded a staggering 754 million shares and dropped to $0.0005.
Part of the shell's baggage was a DTC deposit chill imposed on the stock before Correnti and the Zoyes crew took over. In early December, Correnti proudly announced that with the help of Jarvis, the chill had been removed. Not long after, he issued a second press release on the subject. In it, he explained that the company continued to investigate past stock issuances. Apparently some were considered to be doubtful, and the board had decided to place an administrative hold on 250 million shares through its transfer agent Pacific Stock Transfer. Obviously the intention was to keep that stock from trading, and just as obviously the strategy didn't work.
A great deal of restricted stock was freed up between 30 September and 19 December. According to a financial report filed with OTC Markets for the third quarter 2014, there were 275 million shares of common issued and outstanding as of 30 September. According to GRCV's OTC Markets profile page, as of 16 December, the shares outstanding were 1.75 billion, and the float 710 million. There were also four series of preferred, three of them convertible into common. Where had all the new shares outstanding come from? According to the footnotes to the 20 September financial report, in April 2014, Lion of Judah Capital had acquired a partial assignment of an old debt held by Weinberger Consulting. The note was worth $50,000 to its holder.
Lion of Judah Capital was formed in Florida on 14 April 2014 by Michael Zoyes. It's a foreign corporation, having first been registered in Delaware at the end of March 2014. Another penny stock detective has traced the Weinberger note back to HSCO and Corporate Excellence Consulting.
Unless GRCV offers more information, there's no way of knowing how much stock Zoyes's $50,000 note converted into. Neither is there any way of knowing whether any of the convertible preferred was converted. Zoyes and his fellow HSCO veterans are great fans of convertible preferred stock. Back in 2013 and early 2014, HSCO, OLIE, ASKE and quite a few other small companies were advised by a Canadian promoter called Javan King. King ran an outfit called The Syndicate Trust; it merged with OLIE in December 2013, not long before OLIE was suspended. With the help of U.S. securities attorney Lorin Rosen, he formulated a nonsensical plan to turn worthless penny stocks into what he assured them and their shareholders would be gold mines. The plan entailed encouraging the hapless companies to issue vast amounts of convertible preferred stock--one of the them, The Automotive Resource Network Holdings, Inc (ARNH), had a class of convertible preferred for every letter of the alphabet--that would "remove debt from the balance sheet." Needless to say, removing debt from the balance sheet does not make it disappear. Convertible preferred is a hybrid security, having the characteristics of both debt and equity. King further encouraged his client companies to use this very special stock as "currency." He grandly called it "Anti-Dilutive Convertible Preferred Stock."
That phrase has captured the imagination of the GRCV gang as well. In a press release from 18 December 2014, Correnti informed his public of a "three step initiative" to enhance shareholder value. The first step would be to create a class of "anti-dilutive" convertible preferred that would be distributed as a dividend to common shareholders. The second would be for the company to use convertible preferred as "currency," retiring debt from the balance sheet. And finally, the company would hire an auditor in preparation for registration with the SEC. All three steps are part of Javan King's plan. On 29 December, Correnti announced that he would soon be filing a corporate action request with FINRA to set the issuance of the dividend in motion. Another PR followed on 30 December, explaining that GRCV would seek to beef up its balance sheet by buying secured debt with conversion privileges or options to acquire common stock from other issuers. The news was in part copied from a HSCO press release issued in October 2013. The lengthy quote from Correnti in the GVRP effort was attributed to William White in HSCO's. They are identical, word-for-word.
Correnti also noted that GRVC plans to become a Business Development Company once it begins reporting to the SEC. That was also OLIE's objective. Does Correnti fail to realize that all this worked out very badly indeed for OLIE and other companies advised by King? Or is he just hoping to gin up interest in GRVC's stock, fingers crossed that no one will take a stroll down Memory Lane? We'll choose Door Number Two.
What's next for GRCV?
Grand Capital Ventures' stock hasn't recovered from its December collapse; it has in fact descended ever lower, sinking to $0.0001 on the bid. The day of the selloff, John Jarvis was furious. In late morning, he posted a blog entry at Claire Magazine, and continued to update it throughout the day.
He began on a threatening note: "We are in the process of evaluating the days [sic] events and and what effect this will have on our continued relationship with Grand Capital Venture [sic], Inc." In early afternoon, he said he'd spoken with Correnti and Pacific Transfer and was assured by both that although the "administratively held" shares were "attempted to be traded," they had not been, and that Correnti would be issuing a press release to that effect after the bell. No press release appeared, at least on that subject. News about the convertible preferred did appear, and was described at OTC Markets as "Release#2 dec 23rd 2014," but no other release can be found there. Correnti has yet to make any official comment on the events of 23 December.
The GRCV CEO made only one announcement in January, which seems odd given the flood of often repetitive information from the preceding months. But that press release was a zinger: the company was in the "final stages" of negotiations to purchase a marijuana grow farm in Bend, Oregon. Correnti added that a move into pot cultivation "sets the tone for the kind of diversity that we have [been] looking for." There was not a word about the OTC Exchange, the focus of GRCV's communications throughout December.
Is there really a pot farm--even as a hoped-for acquisition, or was the announcement just a desperate attempt to divert shareholders' attention from massive dilution, cratering stock price, and Jarvis's growing dissatisfaction? GRCV's sadly out of date website is of no help.
For his part, Jarvis hasn't offered any clarity. On 20 January he put a teaser on the Claire Magazine blog, saying: "Mirror Mirror On The Wall - Who is the fairest public company of them all?" He went on to explain that he'd chosen a public company to merge with, and implied he'd be ready to divulge the name once he'd had some coffee. Nothing happened. During the last two weeks of January, Jarvis's people began work on an OTC Exchange website; he's an administrator, but in recent days the admin pages have been made difficult to access. What content is already in place suggests that it will be just another aggregator; there's not even any mention of SIMPLETIER. If Jarvis ditches Grand Capital, the two brokerages--MVP Financial and Arive--cannot be part of the OTC Exchange package.
Facebook, Twitter, and Google+ pages have been set up, all of them accompanied by a photo of the NYSE trading floor, but the content promises to be just as lame as that featured in Claire Magazine. Unless Correnti (and Zoyes) can find a way to come to terms with Jarvis, penny addicts may find themselves relying on OTC Markets, rather than a brand new revolutionary "exchange," for the foreseeable future.
Whatever happens, Grand Capital Ventures, CPI, and the people involved with them are bound to entertain for some time to come. And at least some penny plungers are bound to continue to buy, though it's hard to see why. A bigger bunch of low-life criminals and SEC-sanctioned scoundrels would be hard to find, even in Pennyland.
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