Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
On December 9, 2011, the Company amended an existing promissory note with
Infinite Funding, Inc. by extending the original due date of December 15, 2011
to April 15, 2012. The original note was dated September 28, 2011 with a
principal amount due of $40,000. The Company has agreed to pay an extension fee
of $10,000, thereby increasing the principal amount to $50,000 and extending the
due date to April 15, 2012.
On December 9, 2011, the Company executed a 2nd Amendment to Promissory Note
with Infinite Funding, Inc., extending the due date to April 15, 2012. The
original note was dated June 10, 2011 and was first amended on September 28,
2011. As a result of the second amendment, the Company has extended the due date
to April 15, 2012 and agreed to pay an extension fee of $20,000, thereby
increasing the amount of principal to $95,000.
On December 9, 2011, the Company executed a 3rd Amendment to Promissory Note
with Infinite Funding, Inc., extending the due date from December 15, 2011 to
April 15, 2012. The original note was dated March 3, 2011, first amended on June
9, 2011, and amended a second time on September 28, 2011. The Company has agreed
to pay an extension fee of $20,000, thereby increasing the principal balance due
to $105,000.
On December 9, 2011, the Company entered into a new Promissory Note with
Infinite Funding, Inc. for the principal sum of $100,000. The note is due on
April 15, 2012 and accrues interest at 3% per annum.
http://www.sec.gov/Archives/edgar/data/1365160/000116552711001200/g5646.txt
DOMARK INTERNATIONAL, INC. INFINITE FUNDING, INC.
By: /s/ R. Thomas Kidd /s/ Alina Yurovskay
-------------------------------- ----------------------------------
R. Thomas Kidd Alina Yurovskay
Chairman President
GUARANTOR
By: /s/ R. Thomas Kidd
--------------------------------
R. Thomas Kidd
An Induvidual
Getting fuel from Agilyx by train. Transferring it to trucks to go to the distribution terminal to blend and then selling it to someone?
The XTR Energy agreement will require the Company to purchase third party fuels to blend with its P2O fuel output until it can build out the capacity to meet the full quantities required by the customer.
XTR Energy will be purchasing Regular Transport Gasoline, Premium Transport Gasoline, Diesel Ultra LS Clear and other acceptable road transport products from JBI, Inc. These products are the fuel output of JBI, Inc.’s Plastic2Oil® (“P2O”) process, which will then be blended and made available through the Company’s Blending Site in Thorold, Ontario (“Thorold Terminal”).
“XTR Energy looks forward to acquiring products from JBI, Inc. in Ontario and across Canada. This new relationship is directly aligned with XTR Energy’s strategic objective to have a diversified secure supply of quality petroleum products from a variety of sources to meet the growing demands of the XTR Energy network and preferred customers,” stated Ken Wootton, President of XTR Energy, upon signing the agreement.
“We were attracted to XTR Energy because of their corporate values and distribution reach across much of Canada,” commented John Bordynuik, CEO of JBI, Inc. “They are committed to green alternatives, high operational standards and maintaining long-term winning relationships with both their customers and suppliers.”
The agreement with XTR Energy is a step forward in achieving the Company’s vision of becoming a vertically integrated plastic recycling, fuel processing and fuel distribution company. It allows the Company to utilize the value of one its key assets, the Thorold Terminal, a registered and licensed TSSA fuel blending and distribution facility with fuel storage capacity in excess of 250,000 US gallons
The XTR Energy agreement will require the Company to purchase third party fuels to blend with its P2O fuel output until it can build out the capacity to meet the full quantities required by the customer.
XTR Energy will be purchasing Regular Transport Gasoline, Premium Transport Gasoline, Diesel Ultra LS Clear and other acceptable road transport products from JBI, Inc. These products are the fuel output of JBI, Inc.’s Plastic2Oil® (“P2O”) process, which will then be blended and made available through the Company’s Blending Site in Thorold, Ontario (“Thorold Terminal”).
“XTR Energy looks forward to acquiring products from JBI, Inc. in Ontario and across Canada. This new relationship is directly aligned with XTR Energy’s strategic objective to have a diversified secure supply of quality petroleum products from a variety of sources to meet the growing demands of the XTR Energy network and preferred customers,” stated Ken Wootton, President of XTR Energy, upon signing the agreement.
“We were attracted to XTR Energy because of their corporate values and distribution reach across much of Canada,” commented John Bordynuik, CEO of JBI, Inc. “They are committed to green alternatives, high operational standards and maintaining long-term winning relationships with both their customers and suppliers.”
The agreement with XTR Energy is a step forward in achieving the Company’s vision of becoming a vertically integrated plastic recycling, fuel processing and fuel distribution company. It allows the Company to utilize the value of one its key assets, the Thorold Terminal, a registered and licensed TSSA fuel blending and distribution facility with fuel storage capacity in excess of 250,000 US gallons
When 310/JBI bought John Bordynuik, Inc. wasn't there some question about the value of the assets in that 'arms length' agreement?
JB bought a shell that was virtually worthless. He needed a floor for his shell to get investors, initially to increase the tape reading business. He wanted to juice things up and bought some media credits, Javaco and Pakit. Within months his worthless shell was worth tens of millions of dollars on paper. He raises millions of dollars in pipes, pays of debts, raises more money in pipes then restates everything cutting the value of JBI in half. If that wasn't enough, the businesses he brought in to fluff up the numbers are gone. And still no revenue. And lots of legal fees.
JBIIE and before that TRTN
How about Linda Burr? Part timer mentioned in the Kaplanis lawsuit?
Do we know who the consultant is? How about the business consultant? Can we find anything on filings from 2009?
Are they being paid in shares? Is that why they are investors?
We'll know in May when the 10Q comes out. Maybe they needed money to buy gas so they could show inventory and sales. JB did say they were buying fuel in a recent PR. Didn't say they were making any.
The Company is deeply disappointed that, for the time being, its attempts to negotiate settlement with the SEC following receipt of the Wells Notice have failed.
http://jbii.ir.edgar-online.com/fetchFilingFrameset.aspx?FilingID=8326602&Type=HTML
Why? These were posted AFTER the Well's Notice and AFTER the SEC Complaint was filed.
Parking Tickets?
Those are all after the SEC litigation notice. Why not send all the "chatter" here during the period specified by the Litigation notice?
Can JBI afford to go private?
Hourly Fees for Securities Attorney's? Just a feein'
BK? With 2.8 mill on hand? Nah zero chance of that happening....machines a-rollin'......just 2.8 millin'
Won't know if they actually got the money for the pipe until 10Q is filed in May. Long time from now. Think they'll have anything to show besides bankruptcy papers?
Ego?
I don't understand why JB wouldn't step aside until this case resolves. It seems like the prudent action for the head of a publicly traded company.
I don't think he should admit guilt if he firmly believes he is not guilty, but he should not be holding the company hostage while this plays out.
"The complaint also cites Mr. Bordynuik for using an auditor who was in jail when the company's year-end arrived. On Nov. 28, 2009, just months before the year-end financials were due, the auditor (a principal of Florida firm Gately & Associates) was arrested for violation of probation, drinking and driving, and possession of marijuana. According to the SEC, when Mr. Bordynuik learned of the arrest he not only insisted on continuing to use the auditor, he also agreed to pay for the auditor's criminal lawyer and for an alcohol treatment program. The SEC says this dissolved any notion of independence between the auditor and Mr. Bordynuik."
SEC charges Bordynuik for overstating assets
2012-01-04 20:57 ET - Street Wire
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-JBII) JBI Inc
by Mike Caswell
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1916110&symbol=*SEC&news_region=C
The U.S. Securities and Exchange Commission has filed a civil fraud case against Canadian John Bordynuik for overstating the assets of pink sheets listing JBI Inc. by $9.99-million. (All figures are in U.S. dollars.) The figure comprised almost all of JBI's assets, and was used to help the company raise $8.4-million.
The case is a setback for JBI, which has for years been promoting a product that purportedly converts waste plastic into fuel. The process, which the company calls Plastic2Oil, was touted as a solution to the problem of plastics entering landfills. The stock has been as high as $7.45 in the last three years, but it closed at 86 cents on Wednesday, falling $1.49 in late day trading after the SEC announced the charges.
The SEC says that in 2009 Mr. Bordynuik overstated the value of a media credit the company had acquired for one million shares, listing it on the balance sheet as being worth $9.99-million despite recommendations from his accountant. According to the SEC, the credit should have been valued far more conservatively, initially at $1-million and later at nil. Shortly after raising $8.4-million, the company reported that its financials could no longer be relied upon and wrote the value of the media credit down to nil.
While JBI has not responded to the lawsuit in court, it did issue a brief news release on Wednesday saying it was "profoundly disappointed" with the SEC's "erroneous allegations" of fraud. It says that its officers acted in good faith in valuing the media credit and, after learning of problems with that valuation, immediately took appropriate steps.
SEC's complaint
The SEC filed the case on Wednesday, Jan. 4, in the District of Massachusetts, where JBI once had its office. It lists Mr. Bordynuik, 41, as a Canadian citizen residing in Niagara Falls, Ont., who serves as the company's chief executive officer. The other defendants are JBI itself and the company's former chief financial officer, Ronald Baldwin, 52.
The complaint traces the scheme back to 2005, when Mr. Bordynuik claimed to have discovered a catalyst that could be used to break down unwashed mixed plastics into liquid hydrocarbons, or oil. He said that he had discovered the formula while compiling a massive archive of old scientific data. He placed the idea into a public company in April, 2009, when he acquired majority ownership of an OTC Bulletin Board shell that later became JBI.
The balance sheet problems, as described by the complaint, stemmed from a transaction that Mr. Bordynuik negotiated just months after acquiring the shell. In August, 2009, JBI purchased media credits that purportedly represented $9.99-million worth of prepaid print and radio ads. The company issued one million shares in consideration, which it valued at $1 per share.
When it came to reporting the credits in JBI's third quarter results, Mr. Bordynuik had his in-house accountant record them at the $9.99-million value. He told her in a Skype conversation to "please get the pro formas as juicy as you can so I can acquire a chemical company for less." The overstated value carried over into the actual Form 10-Q that the company later filed with the SEC.
Although Mr. Bordynuik said the credits were "audit proof," the accountant had some concerns, the SEC says. She told him that it would be better to value them at the $1-million that the company had paid for them. A business consultant that JBI had hired also expressed the same view, pointing out that one day prior to the transaction the company had no assets and the very next day it had nearly $10-million.
According to the complaint, Mr. Bordynuik did not follow through on the advice of either the consultant or his accountant, and had the credits listed on the balance sheet for $9.99-million. In reality, the credits had no value, "and certainly not the grossly overstated value" the company reported, the SEC says.
The complaint also cites Mr. Bordynuik for using an auditor who was in jail when the company's year-end arrived. On Nov. 28, 2009, just months before the year-end financials were due, the auditor (a principal of Florida firm Gately & Associates) was arrested for violation of probation, drinking and driving, and possession of marijuana. According to the SEC, when Mr. Bordynuik learned of the arrest he not only insisted on continuing to use the auditor, he also agreed to pay for the auditor's criminal lawyer and for an alcohol treatment program. The SEC says this dissolved any notion of independence between the auditor and Mr. Bordynuik.
While JBI claimed that another auditor at Gately worked on its 2009 annual financials, there is no evidence that anyone at Gately actually did a proper audit, the complaint states. Mr. Bordynuik did not consult with anybody at Gately about the media credit and no one at JBI was able to contact the auditor for a significant period of time before the company's year-end filing. Despite this, an employee at Gately applied the firm's electronic signature to JBI's Form 10-K, falsely representing that there had been an audit, the SEC claims. (The Public Company Accounting Oversight Board has since barred the firm from performing audits, citing matters unrelated to JBI.)
In addition to the allegations against Mr. Bordynuik, the SEC claims that the company's chief financial officer, Mr. Baldwin, did little to question the value of the credits. After taking over as CFO on Jan. 1, 2010, he saw that they were the largest single asset on the company's balance sheet. Despite that, he did nothing to learn about their value beyond some discussions with Mr. Bordynuik, the complaint states.
On May 21, 2010, JBI issued a news release stating that its previously issued financial results should not be relied upon. It later restated the results, writing down the value of the media credits to nil.
The SEC is seeking disgorgement of ill-gotten gains, appropriate civil penalties, and officer and director bans for Mr. Bordynuik and Mr. Baldwin.
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1916110&symbol=*SEC&news_region=C
Do some DD over on the OTC Markets site.
http://www.otcmarkets.com/stock/jbii/quote
Caveat Emptor Rating
Dead wrong. Here is the complaint. GAAP accounting rules.
http://www.sec.gov/litigation/complaints/2012/comp22220.pdf
Accounting for the Media Credits
18. In its third quarter financial statements filed in the Form 10-Q on November 16, 2009 (for the third quarter ended September 30, 2009) and its end of year financial statements filed in the Form 10-K on March 31, 2010 (for year ended December 31, 2009), JBI reported the media credits purchased from Domark as an asset of the company at their purported face value of $9,997,134. This valuation was contrary to applicable Generally Accepted Accounting Principles (“GAAP”). The $9,997,134 valuation can be traced to a purported arms length transaction between Domark and a company called Media4Equity LLC on August 13, 2008. In fact, the original valuation of the media credits by Domark and Media4Equity was severely flawed. In addition, the pricing and projection of probable future economic benefit used for the valuation was not reliable. Finally, the $1,000,000 in consideration paid by JBI for the media credits in its August 24, 2009 transaction with Domark was both a reliable basis for valuing the media credits and a correct reflection of the perceived value of the media credits at the time of the transaction. Because JBI used the purported face value of the media credits, rather than the actual cost, the company overstated the total value of its assets by a minimum of $8,997,134 (the $9,997,134 value reported less the actual $1,000,000 paid) as of both September 30, 2009 and December 31, 2009. That the media credits had no value, and certainly not the grossly overstated value contained in JBI’s financial statements, also is reflected in restatements later filed by the company.
19. In fact, the media credits should not have had any valuation as of the close of the reporting periods on September 30, 2009 and December 31, 2009. The 1,000,000 shares of 310 Holdings common stock (valued at $1.00 per share; $1,000,000 total) constituted an equity based payment. The consideration received in exchange for these equity instruments were the media Case 1:12-cv-10012 Document 1 Filed 01/04/12 Page 7 of 28
8
credits. Because of the unreliability of the probable future economic benefit attributable to the media credits, GAAP required that the media credits initially be recorded in JBI’s books at the $1,000,000 consideration paid by 310 Holdings on August 24, 2009 and subsequently remeasured at September 30 and December 31, 2009. Because there was no probable economic benefit to JBI from the media credits as the ads had limited distribution and would be unlikely to increase sales and profits, GAAP required that the media credits should be written off in their entirety as of September 30, 2009. Therefore, the media credits, listed by JBI on its financial statements with a $9,997,134 valuation, in fact should have been valued initially at the $1,000,000 purchase price, but then written off entirely. For the reporting periods that ended on September 30, 2009 and December 31, 2009, JBI did neither.
Bordynuik Knew the Valuation of the Media Credits Was Improper
20. Up to and through the September 30, 2009 filing, JBI did not employ an in house accountant to assist with accounting and financial reporting. Instead, the company hired an outside accounting consultant (“the consultant”) to assist with accounting, financial statement preparation, and public filings with the SEC. The consultant hired by JBI was not a certified public accountant (“CPA”) nor did she have a formal degree in accounting. In total, the consultant had six credit hours at a community college in two introductory accounting courses. The consultant had begun doing accounting related work for 310 Holdings in the 2002-2003 timeframe. Her relationship with 310 Holdings continued when JBI was merged into it.
21. At the time JBI (through its predecessor, 310 Holdings) acquired the media credits Bordynuik discussed with the consultant valuing the media credits at $10 million despite the fact that JBI obtained them at a cost of $1 million (i.e., the $1,000,000 equity payment made via the transfer of 1,000,000 shares of 310 Holdings common stock). At the time Bordynuik
Case 1:12-cv-10012 Document 1 Filed 01/04/12 Page 8 of 28
9
knew that the consultant was not a CPA. Bordynuik also knew that she would be responsible for preparing JBI’s financial statements. Bordynuik then instructed the consultant via internet instant messaging (a “Skype” message) to “please get the pro formas as juicy as you can so I can acquire a chemical company for less.” The reference to a chemical company related to Bordynuik’s intent to use JBI and its valuation as a vehicle for acquisitions. The reference to “pro formas” related to financial statements of JBI that would not necessarily conform with GAAP and that the company could use to communicate information about JBI to prospective investors, as opposed to being filed with the SEC. In response to Bordynuik’s instructions the consultant produced pro formas to Bordynuik that contained the media credits valued at nearly $10 million.
22. Prior to JBI’s filing of its Form 10-Q for the period ended September 30, 2009, Bordynuik traveled from Canada to Florida to consult with the consultant in person about, among other things, the valuation of the media credits, and what needed to be done in preparation for the quarterly filing. During the same trip Bordynuik also was scheduled to meet with an audit firm, Gately & Associates (“the Gately firm”), that served as JBI’s independent auditors. Leading up to and during this trip Bordynuik became aware of a severe drinking problem by the auditor (a principal of the firm) assigned to JBI at the Gately firm (“the auditor”) that incapacitated him for days and/or weeks at a time. One of those who told Bordynuik about the auditor’s drinking problem was the consultant, who did so in an effort to encourage Bordynuik to hire a different auditor. Despite knowing of the auditor’s drinking problem and, at times, having difficulty making contact with him, JBI and Bordynuik continued to utilize Gately & Associates (and the assigned auditor) as its independent auditor for the September 30, 2009 10-Q filing and through the March 31, 2010 filing of the Form 10-K for the year ended 2009. Case 1:12-cv-10012 Document 1 Filed 01/04/12 Page 9 of 28
10
23. During this trip by Bordynuik to Florida, and prior to the filing of the Form 10-Q for the quarter ended September 30, 2009, the consultant expressed concerns to Bordynuik about what appropriate value, according to GAAP, to record the media credits on JBI’s balance sheet. The consultant told Bordynuik that she thought GAAP required that the media credits be recorded at their cost to JBI of $1 million, not at their face value of $9.997 million. During the same period, and also before the filing of the third quarter 10-Q, another consultant (“the business consultant”) affiliated with JBI raised questions about JBI’s pro formas containing the $9.997 million value of the media credits. The business consultant was the Assistant Secretary for JBI and a business consultant working on Plastic2Oil initiatives. He also was a CPA and a former staff auditor at Deloitte & Touche, one of the Big Four accounting firms.
24. The business consultant expressed concerns to Bordynuik that the media credits should be booked at cost prior to the third quarter Form 10-Q filing. The business consultant had specific discussions with Bordynuik about his concerns with JBI booking the media credits at a nearly $10 million value. The business consultant told Bordynuik that the $10 million valuation was odd and inconsistent with his experience as an auditor because he believed that such an asset should be booked at the lesser of cost or market value. The business consultant further explained his concern regarding the $10 million valuation of the media credits on JBI’s balance sheet by pointing out that the company one day prior to the transaction had no assets yet, on the very next day, appeared to have assets of nearly $10 million. The business consultant raised these concerns with Bordynuik after the media credits were first acquired. Bordynuik responded to the business consultant’s concerns by stating that the media credits were “audit proof.” The business consultant also cautioned Bordynuik that he needed to be careful about how he valued the media Case 1:12-cv-10012 Document 1 Filed 01/04/12 Page 10 of 28
11
credits and advised that, in his view, to obtain good accounting and auditing advice, Bordynuik should hire a Big 4 accounting firm.
25. Bordynuik did not follow the advice of the business consultant about either the valuation of the media credits or the hiring of a new accountant and/or auditor. Instead, Bordynuik continued to use the consultant for accounting services, including the preparation of pro formas and financial statements and kept the auditor at the Gately firm as his independent auditor. In fact, notwithstanding the concerns raised both by the consultant and the business consultant, in Skype messaging to the consultant on September 2, 2009, Bordynuik stated to her:
[The business consultant’s] group is ultra conservative and are very very good at what they do. They were concerned about our pro forma because they said the [m]edia
should have been booked at cost and the big 4 accounting firms would
probably penalize us. I advised that the media credits could stand on
their own and the auditor said so (this was from [Domark’s CEO]). I hope so….
We need a chemc company bad…jezz (sic).
26. By mid-September 2009, and prior to the filing of the third quarter Form 10-Q, additional information came to Bordynuik that raised questions about the valuation, and even the validity at all, of the media credits. Bordynuik learned that misleading statements had been made by Domark’s CEO to induce JBI’s acquisition of Javaco, including whether Javaco even maintained operations in Mexico as previously claimed by the CEO. In addition, Bordynuik learned that the CEO of NewsUSA, the parent company of Media4Equity (the original source of the media credits in a purported arms length transaction with Domark), was previously on the Board of Directors of Domark. On September 21, 2009, the consultant informed Bordynuik of the suspect relationship via Skype message, “BTW, I just discovered that the CEO of NewsUSA is a prior director of Domark.” Bordynuik responded, also via Skype, “I saw that. Yuck.” Despite having renewed doubts about the source of the media credits, the credibility of Domark’s CEO, and being warned about the proper GAAP treatment of the media credits by JBI’s own
Case 1:12-cv-10012 Document 1 Filed 01/04/12 Page 11 of 28
12
consultant and business consultant, Bordynuik directed that the media credits on JBI’s financial statements contained in its Form 10-Q, filed on November 16, 2009, for the quarter ended September 30, 2009, be listed at the purported face value of $9.997 million.
Pending Patents. Patented. Data patent. Non balancing balance sheets. Millions of tapes from NASA just waiting to be read. Running juicy companies into the ground, etc. I'm sure they don't want to air anything more than they have to.
Can you prove that? Oh and Michelle is one of the attorneys who signed the complaint.
SECURITIES AND EXCHANGE COMMISSION
By its attorneys,
/s/ Martin F. Healey
Martin F. Healey (BBO No. 227550)
Michelle Giard Draeger (ME Bar No. 8906) 33 Arch Street, 23rd Floor
Boston, Massachusetts 02110
Telephone: (617) 573-8952 (Healey direct)
Facsimile: (617) 573-4590
E-mail: healeym@sec.gov
http://www.sec.gov/litigation/complaints/2012/comp22220.pdf
page 28
Why? Who did something improper? What did they supposedly do?
Read the rules about disgorgement.
http://www.sec.gov/about/rulesprac2006.pdf
Requiring all Defendants to disgorge their ill-gotten gains and losses avoided, plus pre-judgment interest, with said monies to be distributed in accordance with a plan of distribution to be ordered by the Court;
http://www.sec.gov/litigation/complaints/2012/comp22220.pdf
Wait til they file bankruptcy. That'll get your heart going.
Top Tier on the OTC? Caveat Emptor
http://www.otcmarkets.com/otc-101/otc-market-tiers
15 counts against JBI. Jury trial.
http://www.sec.gov/litigation/complaints/2012/comp22220.pdf
This isn't about the media credits. Never was. It was the the way stock was issued based on a KNOWN false valuation of the company. And then lied about. It was never about the media credits.
Might want to pick up some petroleum distillate first. Not sure which is best - probably #6.
Wondering if we'll see another Form 4 soon. They've got a few weeks to file them.
When should I get in? .05? .005? Any thoughts?
And how many independent audit firms have they hired since this "mistatement"? Kidd restated them on his financials as well.
Yep - are they going to go after Kidd for the same thing?
JBI has a COO and a CFO who could step in as acting CEO. Do you think JB will allow that?
Merry way? Sub penny. Just subbin'
A little early to be drinking the kool-aid. Better start baking that cake - the one with the file in it.
Ummmmm? Weren't you at the AGM? Mistake? Misstatement? FRAUD? He was well aware (via skype) the media credits weren't worth 9.9 million dollars yet continued to scam apparently even you.