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Stiffing investors is bad enough, but stiffing the supplier of the door, well, that says quite a lot, doesn't it, and unfortunately, none of it is good.
Is Lacle 'asleep at the wheel' or is he actually supportive of Mr. Saleem's actions?
My mistake....002 is two thousandths of a dollar, not two thousandths of a cent...
The two comments that appear below were posted online in response to the article. Great job, Michelex management team, way to get the locals behind you....
Interesting...per the article:
Just read the article.... who knew Michelex was trading for two cents/share! Obviously, should have read two-thousandths of a cent...
Thanks...the question now is, "Did he steal more than Christmas?"
Kudos, some anyway, to Mr. Kakani for finally coming forward.
Now that the article has been published, the following questions need to be answered:
1. United was supposed to provid $4,000,000 worth of funding to Michelex/Pristine. Did any of those funds end up in an account associated with either Michelex or Pristine?
2. If yes, how much of that funding has been accessed and who accessed that funding?
3. How much, if any, of that funding still resides in an account associated with either Michelex?
c. Who has the authority to access those funds? Are two signatures required?
4. Has United/Saleem, or any other Michelex executive, transferred any funds to their own personnel accounts or to the accounts of a subsidiary of Michelex other than Pristine Pharma Corporation (e.g., have funds been transferred to Medscan)?
Based upon a review of the News items listed on the Michelex website along with a review of the Draft Audit, following are questions that need to be answered. Based upon hear-say, some people might think they know some of the answers. However, given what has occurred, or has not occurred, these, or similar, questions should be publicly addressed by management. (Note: similar questions may appear more than once; this is due to the questions being listed in a somewhat chronological order based upon the news releases and the release of the draft audit.)
Funding/Financial Questions:
1. On July 1, 2010, Michelex announced the acquisition of United Mortgage Bankers and noted that United had “$3 million in paid up capital and $10.5 million in funds for investment.”
a. Did the $3million in paid up capital refer to cash deposits or other liquid deposits?
b. In what form was the $10.5 million of ‘investable funds”? The wording of the PR leads one to believe that the $10.5 million was not as liquid as the $3 million in paid up capital.
c. Did United Bankers/Saleem actually have ownership and control of the $10.5million of ‘investable funds’ or were those funds held by another person/entity?
d. If United/Saleem did not have possession of those funds, who did?
2. The Draft Audit lists a certificate of deposit in the amount of $13.5 million as an asset.
a. Is the certificate of deposit made up of the funds that were attained by Michelex during the acquisition of United Mortgage Bankers? If not, where did these funds come from?
b. Who has control of the certificate of deposit, Saleem or someone else?
c. Is it true that you have not been able to access that certificate of deposit to fund contract acquisitions and cover the cost of manufacturing product? If that is the case, why have you/Pristine not been able to access those funds?
3. The Draft Audit lists a liability in the amount of $10.5 million ‘Due to Related Party’.
a. Is this liability the $10.5 million of ‘investable funds’ that were provided by Saleem/United?
b. If not, who is the related party and how was this liability incurred?
4. The Draft Audit also notes a liability of $7,238,820 for ‘Convertible Notes Payable’.
a. Who holds the notes?
b. What are the terms of the notes?
c. How was this liability incurred?
5. The Draft Audit also lists a liability of $1,105,800 relating to ‘Convertible Notes – past due’. Under ‘Note 4. Notes Payable, Convertible Notes Payable – Past Due’ (Page 5 of the Draft Audit), it states that “The holder of the noted has the right to convert all or any part of the note into shares of the common stock of the Company.”
a. Is AJW/NIR Group/Corey Ribotsky (or any affiliated organizations) the holder of these notes?
b. Has any part of the note been converted into shares of common stock? If so, how many shares and when?
6. The notes to the Draft Audit (Note 1, pg. 1) state that “In May 2010, the Company issued 179,962,772 shares of its common stock to the stockholders of United Mortgage Bankers, LTD (United) in the anticipation of acquiring United. Shortly thereafter, Michelex acquired United in exchange for a $4,000,000.” Note 4 (pp 5-6) states that “In connection with the acquisition of United, the company issued a $4,000,000 note which is due May, 2012 and is non-interest bearing….The note is convertible into such number of shares as may be mutually agreeable and is collateralized by a pledge of shares of United.”
a. It appears that United/Saleem provided Michelex with $3 million (i.e., the ‘paid up capital’ referred to in the July 1, 2010 announcement) and per the July 15, 2010 PR, an additional $1 million was provided to Pristine. Is this correct?
b. In exchange for the $4 million provided to Michelex/Pristine, United/Saleem received a note in the amount of $4,000,000 PLUS shares of Michelex common stock. Is this correct?
c. Did Saleem, Kakani, Lacle or any other past or present member of Michlex’ Board provide any capital to Michelex or Pristine? If so, who and how much?
7. The July 1, 2010 PR noted that Pristine Pharma Corp. was funded $3.5million by a boutique hedge fund (i.e., Moriah Capital).
a. Did this funding go directly to PPC?
b. It appears that these funds were used to modify the Massena facility. Is that correct?
c. Are any further modifications required to make the Massena facility fully operational? If yes, what modifications and at what cost?
8. The July 15, 2010 PR stated that Michelex, via United, invested $1million into Pristine Pharma Corp.
a. Did this actually occur? Were these funds under your control or the control of someone else?
b. Combined with the $3.5 million funding from Moriah Capital, Pristine should have received $4.5 million worth of funding. Is that correct?
c. Have you/Pristine been able to access any of these funds?
d. If yes, how much and for what purpose?
e. What additional funding do you need to adequately fund Pristine Pharma Corp?
f. Are there any plans to utilize the Massena facility?
g. What needs to occur in order to utilize the Massena facility?
9. The Draft Audit shows the consolidated balance sheet for Michelex and its subsidiaries as of December 31, 2010 and lists revenues as $24,781 and gross profit of $6,039.
a. Are those figures correct? Revenues for the entire year were less than $25K?
10. Note 7. Subsequent Events (page 6 of the Draft Audit) states that “In April 2011, the Company signed a Letter Of Intent to acquire Nutraceutical company in Hackensack, N.J., the due diligence of which is in progress. In addition to this proposed acquisition on May 25, 2011 the Company acquired a controlling interest in Medscan National Corporation, a management services organization which provides management services to diagnostic centers and Clinics in New Jersey.”
a. How did Michelex acquire a controlling interest in Medscan?
b. What liabilities, if any, resulted from acquiring a controlling interest in Medscan?
c. Did Michelex acquire Nutraceutical after completion of due diligence?
d. If yes, what liabilities, if any, resulted from acquiring a Nutraceutical?
Contracts/Manufacturing Questions:
1. The August 4, 2010 PR stated that Pristine received orders worth over $1.8 million from domestic distributors for its NUMED brand pharmaceuticals.
a. Were these contracts fulfilled?
b. Were they fulfilled on time and was a net profit made?
c. In which fiscal year will the profits be accounted for, 2010 or 2011? The Draft Audit for fiscal year 2010 listed revenues as only $24,781 and gross profit of $6,039.
2. Michelex Press Release – 2 (October, 19, 2010) noted that Pristine had started deliveries of OTC pharmaceutical products to overseas distributors. The release also stated that Pristine ‘was holding purchase orders for its OTC line of pharmaceutical products, worth over $2.8 million from its domestic customers, as well as export distributors.’
a. Were the contracts worth over $2.8 million actually filled by Pristine?
b. Were products delivered by more than one distributor?
c. Was ITA one of the overseas distributors?
3. Michelex Press Release – 3 (November 19, 2010) noted that all of the manufacturing equipment had been moved to the Massena facility and that it was projected that the plant would be operational and ready to produce Pristine’s NUMED brand label products by January, 2011.
a. Why did production not commence as planned?
4. Michelex Press Release – 4 (December 20, 2010) stated that ‘Domestic clients include the nations’ largest pharmacies like: Walgreen’s, CVS and Rite-Aid; Regional pharmacies like Kinney Drugs; Supermarkets like Publix, Price Chopper and Wal-Mart Stores, Inc.’
a. Does Pristine have contracts directly with any of the entities listed above? If yes, which ones?
b. Does Pristine have contracts with distributors who supply any of the entities listed above?
5. Michelex Press Release – 4 (December 20, 2010) stated that Cough Syrups, Pain Relievers, Nasal Sprays and other liquid OTC medicines under store brands and Pristine's NUMED label would be produced at the Massena facility. Mr. Kakani noted that the facility might open as soon as February 2011 with a staff of 25 and plans to employ up to 100 people.
a. Was the facility ready in February? If not, why not, and is the facility ready now?
b. If the facility was ready, why was it not used? Investors were told that there was not enough volume to justify using the plant. If that was the case, why were there not enough orders and what will be done to rectify the problem?
6. The January 10, 2011 posting on the Michelex website noted that job openings were posted on the Pristine Pharma website.
a. Were jobs also posted on sites known to attract suitable candidates or listed with firms specializing in the recruitment of individuals for jobs with pharmaceutical companies?
b. Were jobs listed with the St. Lawrence County Industrial Development Agency?
7. The January 23, 2011 news release noted that local TV and print media covered the events at Pristine (i.e., tour of facility given to Maxim Pantchenko).
a. Did Messrs. Lacle, Saleem and/or Kakani know at the time of the tour that the Massena facility would not be used in 2011?
b. Why has the Massena facility not been used up to this point in time? Is it due to a lack of contracts or a lack of adequate funding?
8. Michelex Press Release – 8 (June 1, 2011) stated that Pristine Pharma Corp ‘has signed a contract with International Trade Association of America for export distribution of six over-the-counter pharmaceutical products. This contract is valued initially at $5.5 million per year, and delivery of these products is to begin in August 2011.’
a. Were any shipments made in August? If not, were there any penalties associated with not meeting specified shipment dates?
b. Will the entirety of this contract be fulfilled by Pristine?
c. When will Pristine deliver the final allotment of products?
9. What is the total dollar amount of contracts that Pristine has fulfilled? The news releases mention a total of $10.1 million in contracts. (4/4/10: $1.8; 10/19/10: $2.8; and 6/1/10 $5.5)
a. Are there any additional contracts that have been signed?
Management/Ownership Questions:
1. A Form 8-K was filed with the SEC on March 17, 2011 in which the following was noted:
On November 30, 2010, Darshan Shah, the Company’s Chairman and director resigned from the Company. Sabir Saleem was named as Director, CEO and Chairman. Additionally, Venkat Kakani was also named as a Director of the Company. The Company’s new board of directors consists of Albert Lacle’, Midhat H. Syed, Esq., Venkat Kakani and Sabir Saleem. The Company’s new officers are Albert Lacle’ as President, Midhat H. Syed, Esq. as Secretary, Venkat Kakani as Treasurer and Sabir Saleem as Chairman and CEO.
a. Why did Mr. Shah resign and why was Mr. Saleem named as Director, CEO and Chairman?
b. As Treasurer, can Mr. Kakani access all financial documents and accounts related to Michelex and its subsidiaries?
c. As Treasure, can Mr. Kakani withdraw funds from company accounts or does he need a co-signer? If a co-signer is needed, who is that person?
d. Has Mr. Kakani been given the resources to sign new contracts? If not, why not?
2. The Draft Audit notes that ‘in May, 2010 the Company issued 179,962,772 shares of its common stock to the stockholders of United Mortgage Bankers, LTD. (United) in anticipation of acquiring United….In addition, the Company issued 10,000 shares of preferred stock to the former owners of United each share of which has 100,000 voting rights.’
a. Who received shares of common stock, and how many shares did they receive?
b. Who received shares of preferred stock and how many shares did they receive?
c. What, if any, restrictions are associated with the common and/or restricted shares that were received?
3. Press Release – 7 (April 26, 2011) stated that Michelex ‘has signed a binding letter of intent to acquire, from Girish Desai, MD 100% of the ownership interest of Vitacoat Corp., Alpro Inc., and G&P International LLC.’
a. Who initiated the contact w/ Dr. Desai?
b. Which members of the Board of Directors were in agreement with signing the binding letter of intent? Did any Board members dissent?
c. Why was the deal not consummated?
4. Whose idea was it to perform a Reverse Merger with Michelex?
a. If it was not Mr. Kakani’s idea, how did he become involved?
5. Did Pristine Pharma Corporation exist before the Reverse Merger process was begun or was Pristine Pharma Corporation created in order to facilitate the Reverse Merger?
Okay. I will need to make some modifications before posting. I will not post a chronological list of all of the PR's as that file is rather large due to my using the actual images from the Michelex website. As previously posted, if someone wants a copy of the file, PM me.
Harr,
Is it okay for me to post my list of questions? As you know, it's quite a long list...
TIA
I made a compilation of all of Michelex' PR's/news releases (ok, I did leave out the one noting that a sign had been put up outside the Massena facility). In addition, I have created a list of questions based upon the news releases and Draft Audit. If you would like me to send you a copy of either file, send me your email via PM.
A few thoughts:
1) Shareholders and prospective investors are predominantly non-Europeans. Thus, this is just another example of Michelex' poor or non-existent IR capabilities.
2) It is possible that contracting companies do not want contractual status divulged via news releases. In that case, the use of 'like' or 'for example' would be acceptable.
3) Given what has transpired since the release (Dec. 20, 2010) Michelex' management has no one to blame but themselves for investors taking any of their pronouncements with a grain, make that a ton, of salt.
PS..It is possible that what was written in the news release is actually happening, but then again, how would we know? Right now, most investors are worried about the implosion of the company due to 'management issues'.
Based upon the Draft Audit,, Gross Revenues for 2010 equaled $24,781. Thus it's doubtful that Pristine Pharma Corp. delivered and received payment for any shipments 2010.
Hmm, wonder if we can rent out members of the dispossessed Occupy movement? They need jobs (though my guess is that most don't actually want a job) and we need some leverage. Bingo! Send them to occupy the lawns of Saleem, Lacle and Kakani ;)
CSTI didn't change yesterday but another MM might have upped their bid.
It would be my pleasure; though I'm quite sure there will be a long line of people that would like to remind you, and I doubt they'd be as civil in doing so ;)
I'm not sure that it is a scam. It could be, and management has done nothing to assuage investors' concerns, but I still think the problem is a dysfunctional management team and not a botched scam. As I've noted before, if they are trying to run a scam, they are doing a terrible job of it!
PS...For everyone's sake, I hope I'm right and you are wrong ;)
Happy Thanksgiving to All
May Michelex' management team resolve their issues and may Michelex/Pristine become a Pink Sheet success story. Not only would that be good news for investors, but it would be good news for the local economy in Massena.
El Cheepo,
I'm curious:
1. Did you have shares that you sold at a loss?
2. Do you still have any shares?
3. Do you want Michelex to fail?
4. Do you think it's just a scam?
Happy Thanksgiving and best wishes for investing success (hopefully including Michelex ;)
There have been some postings regarding a $25,000,000 LOC. In regards to Michelex, LOC refers to a "Lettor of Credit" not a "Line of Credit". Actually, the LOC that Michelex has is an "Irrevocable Standby Letter of Credit". Thus, Michelex can not go to the issuing bank and access cash like a homeowner does when they access a Line of Credit (i.e., you get access to cash based upon pre-determined payment terms; basically a loan) to fund operations.
Here is the description of an Irrevocable Letter of Credit:
Standby Letter of Creditl
I remember the first time I received one in the mail: "Holy Cow, what a great opportunity!" Then when I did a little digging, it became more like, "Holy Cow-sh*t"
Never thought you would. Don't know how those people do it, but there sure are lot's of people who do.
Look on the bright side, it hasn't gone done anymore ;)
It seems that we are only getting information out of Kakani. Is there any way to verify what he is telling people? Has anyone communicated with either Saleem or Lacle to hear their side of the story?
In the absence of management getting their act together, I doubt that a third-party marketing blitz would work. The I-Hub community knows that absent drastic changes coupled w/ good news, Michelex is currently not a very good choice for a short-term flip, let alone a buy-and-hold scenario.
IMHO, we need a competent management team. Do you have any faith that Michelex' management team can actually run the company the proper way or even run an effective P&D scheme? I don't. But who knows, worse stocks than this have run before.
Really? I'm sure you could temporarily get the ask up, but I doubt that enough new investors would follow suit to have enough volume for everyone to sell off. If a group was able to work w/ management it is possible that a pump-and-dump scheme could create enough momentum so that everyone could get out. However, if anyone is going to do that, count me out. I may not like to lose money, but I do like being able to face myself in the mirror every morning.
PS...Not suggesting that you would be a part of a P&D.
Sounds good. I posted a short synopsis of what I've heard, but you are my main source...
Has anyone had recent contact with either Lacle or Saleem?
TIA
I understand your decision not to post updates to this board. It is unfortunate that management has created such a mess. Best of luck w/ your business.
To those who have contact with Michelex' management team, if appropriate, please inform them that if they do not want to publicly communicate with shareholders, maybe they will be more inclined to communicate with others acting on behalf of shareholders. Specifically, some shareholders are getting ready to contact the SEC in regards to how Michelex is being 'managed' while others are looking into contracting with a Utah law firm that specializes in securities fraud.