@JasonCoombsCEO
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Hours of phone conversation already today, during the Public Startup Company Investor Days event. Tomorrow is the Investor Days event for Homeland Forensics.
To participate, visit:
https://homelandforensics.com/iDays
If you haven't already signed up for the Public Startup Investor Days events, visit:
https://publicstartup.com/iDays
Also follow us on Twitter:
https://twitter.com/InvestorDays
I am available to answer questions today and tomorrow.
An 8-K has been filed today regarding an informal inquiry by the Securities and Exchange Commission.
The complete 8-K filing is here:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9651212
The PDF copy of a letter received from the Division of Enforcement is here:
http://www.otcmarkets.com/edgar/GetFilingPdf?FilingID=9651212
A press release has been scheduled for publication tomorrow morning.
This is a "confidential and non-public" inquiry and there was no obligation for us to disclose it.
I have disclosed the existence of this inquiry anyway because in my opinion this is a very positive sign that the SEC is willing and able to investigate, in a reasonable and efficient manner, public offerings of unregistered securities under the new JOBS Act Rules.
In the future it is very likely that many startups and founders will be contacted by the SEC Division of Enforcement in this way. It is instructive and informative to see the process in advance so that everyone knows what to expect from regulators going forward.
Homeland Forensics Investor Days event today is being supported by a direct marketing campaign in which we are reaching out to as many as 1.5 million experienced investors in the United States and Canada.
Under Rule 506(c) of the JOBS Act we are only allowed to sell shares to accredited investors, presently. See Rule 501 of Regulation D:
http://www.sec.gov/answers/accred.htm
Next year the JOBS Act Rules will allow the use of a crowdfunding portal to sell unregistered equity shares to non-accredited investors, also. This secondary public offering is not open to those non-accredited investors now.
For more information, and to receive a Rule 506(c) offering document please connect with us on social media or subscribe, here:
https://homelandforensics.com/iDays
To sign in with Google+ you can use this URL:
https://homelandforensics.com/iDays?Auth=G
To sign in with Twitter you can use this URL:
https://homelandforensics.com/iDays?Auth=T
To sign in with Facebook you can use this URL:
https://homelandforensics.com/iDays?Auth=F
One of the first questions people are asking is at what price will the shares be sold to new investors.
I have determined what I believe to be the optimal price for new capital that reasonably values everything that Homeland Forensics/ADIA represents today, including each one of our legacy lines of business that will be able to produce revenue when recapitalized. The price per share for this secondary public offering is only being disclosed to prospective investors who submit an expression of interest.
The outcome of our secondary public offering will be disclosed and an 8-K will be filed after we have filed the necessary regulatory compliance forms related to the Offering. Under the initial JOBS Act Rule 506(c) there is no "Advance Form D" filing requirement prior to selling unregistered securities, so we have not yet filed one for this secondary public offering.
I appreciate your sense of humor. Truly. Dramatic irony can be humorous, even for those of us on the receiving end.
This entire situation is full of irony.
For example, in the last 24 months I have personally spoken to and met with no fewer than three billionaire investors and we have raised seed capital from one. The response that they, and other sophisticated accredited investors provide is consistent and uniform: nobody is particularly interested in the probiotics business and they do not want to get involved with a startup that has a name like "Adia Nutrition, Inc."
It is ironic that in order to continue to develop the potential of the cyber forensics and cybersecurity business that was our core business before Adia was invented there must first be improbable success with the raising of new capital for Adia Nutrition, Inc.
It is hard to imagine any way that this effort could be made more difficult, but one of the amazing things about business is that the improbable is an everyday occurrence in things that create economic value.
Did you see the successful IndieGogo crowdfunding campaigns for sequencing the personal microbiome?
http://www.indiegogo.com/projects/american-gut-what-s-in-your-gut--7
http://www.indiegogo.com/projects/ubiome-sequencing-your-microbiome
There are numerous examples of other crowdfunding successes for new products involving probiotics and the human microbiome.
This is part of the reason, in my opinion, that LiveWire would want to be involved in the probiotics business.
I believe that I understand your viewpoint regarding how you think it appears wrong to you for a corporate insider to talk with the public, particularly when discussing products and new ideas. When I started doing that, it upset you because you consider product development to be something secret. Are you aware of Quirky?
http://www.quirky.com/how-it-works
http://www.quirky.com/blog/post/2012/09/what-raising-money-means-to-me/
Ben Kaufman has managed to raise upwards of $80M for crowd sourced product design and development as a new form of social media. The WSJ blog article, below, reports that the business was valued at only $150M after raising almost 50% of that amount.
http://blogs.wsj.com/digits/2012/09/06/andreessen-horowitz-leads-68-million-investment-in-startup-quirky/
Do you think a valuation of only two times the capital raised is a good sign or a bad one?
The fact is that public involvement in product design is now the standard of practice in nearly every industry, and not only in the realm of startups. Large well-capitalized companies are also using the Internet to help discover the right products and the right designs before they attempt to bring them to market.
When I asked you, and others, whether you would be interested in a new product that enables you to create your own caffeine-infused snack products, drinks, and so forth, at home, it was interesting to me that you reacted with anger and accusations. It reflected your point-of-view at that time, and I wonder if your views have changed since then... Have you seen Sprayable Energy?
http://www.indiegogo.com/projects/sprayable-energy
It was because of my extensive experience and awareness of what's happening in the market for new products, and in particular for products like LiveWire's and Adia's, that I chose to solicit input from the people who have a direct equity interest in the company. If you wanted LiveWire and Adia to pioneer new products, you could have said so, and helped with the design effort. Instead you got upset at the question. Hopefully that sort of thing doesn't happen in the future, especially considering the irony that LiveWire did ultimately decide to design and launch a new probiotics product without your new ideas and suggestions.
Here is the press release from December 4th:
http://ih.advfn.com/p.php?pid=nmona&article=60262032
I made it clear to Bill Hodson that our new Adia Probiotics startup company will be competing with LiveWire, and as far as I know right now the LiveWire Probiotics product is not derived from the Adia product so there are only a few possible scenarios in which their actions could be deemed wrongful.
If LiveWire had been able to raise their own capital previously then the outcome of the negotiations between Wen and Bill would probably have been different, but after July when I became the CEO of this company again it became clear that LiveWire was going to need us to fund their acquisition of our probiotics business. We were unable to do that, but not unwilling under the right circumstances.
There is a possibility that we will need to file a criminal complaint against one or more parties involved in the events surrounding the LOI with LiveWire, but at this moment I do not see any reason that any complaints would need to be filed against LiveWire.
I'm happy to answer any questions anyone has about this matter.
We are hosting an Investor Days event today for Public Startup Company, and tomorrow is the second Investor Days event for Homeland Forensics.
Connect with us via social media, sign up to receive our Rule 506(c) public offering materials, and I will be available all day to answer questions.
Sign in using your social profile, here:
https://publicstartup.com/iDays
To sign in directly with Google+ use this URL:
https://publicstartup.com/iDays?Auth=G
To sign in directly with Twitter use this URL:
https://publicstartup.com/iDays?Auth=T
To sign in directly with Facebook use this URL:
https://publicstartup.com/iDays?Auth=F
For more information about Investor Days events and to learn how to host your own event, follow @InvestorDays on Twitter:
https://twitter.com/InvestorDays
There is no simple answer to your question. On the one hand there was apparently never any contractual obligation, from the Letter Of Intent negotiations alone, for any non-compete covenant. On the other hand, there is always an implied covenant of fair dealing governing any negotiation and all business activity. If we decide to litigate this question, the lawsuit must be filed within the time period of the civil statute of limitations in California.
I have gathered and preserved evidence that I consider to be proof of wrongdoing on the part of third-parties, including the company that designed the Adia probiotics products, but as for LiveWire the only thing I can say at the moment is that Bill Hodson told me that Adia was now worthless so he wanted me to simply give him the probiotics business for free. Obviously that "offer" was refused, but Bill continued to indicate that he was still negotiating even beyond the publication of his press release announcing the termination of the negotiations. In my opinion, the negotiations are ongoing and they are merely ongoing in a very unconventional manner designed to decrease the likelihood that Adia will ever be in a position to take legal action against LiveWire.
There is reason to believe that Bill Hodson was not the only person attempting to move the probiotics business out of our company and into LiveWire without compensation for our shareholders. If we give Bill and LiveWire the benefit of the doubt, which at this point perhaps they still deserve, then the "offer" that was made by Bill to simply take over the probiotics business for free could be interpreted as a friendly attempt to be helpful. I want to afford LiveWire the benefit of the doubt, but it is frankly difficult to do that at this point.
For the moment you'll need to draw your own conclusions. I think there will be more to this story later, especially when our new investors fund the launch of our new Adia Probiotics subsidiary and we begin crowdfunding under the JOBS Act next year for Adia Probiotics.
Homeland Forensics is hosting a social media Investor Days event today.
I am available to answer questions and to talk with current and potential investors. To receive a Regulation D Rule 506(c) Offering document and to submit an expression of interest, please subscribe or sign in with your social profile at:
https://homelandforensics.com/iDays
The response so far to the promotion on LinkedIn has been particularly supportive and we're making progress connecting with new investors, partners and potential members of our growing team.
To connect with me on LinkedIn please visit
https://www.linkedin.com/in/jasoncoombs
It is interesting to note that our e-mail subscribe feature is seeing some activity but so far nobody has signed in using a Facebook, Twitter or Google+ social profile.
Connecting with people via social media is initially more difficult but once the connection has been made the communication channel is far more efficient and effective compared to e-mail.
This is the very beginning of a long-term trend toward social media platforms and collaborative workspaces but away from e-mail as the primary method of electronic communication.
Throughout December we now have our first advertising campaign running to attract potential investors, partners, and co-founders for Public Startup Company, Inc. and Homeland Forensics.
We have also commenced multiple Initial Public Offerings pursuant to the JOBS Act, and in so doing we have complied voluntarily with the Rule 506(c) general solicitation material disclosure procedures created by the SEC. See:
https://www.sec.gov/forms/rule506c
I would like it to be clear to everyone that if we do not succeed in attracting additional capital from investors, including our existing investors who have continued to provide us with seed funding, that our companies will continue to be unable to grow substantially. We must receive substantial new capital, or the only sustainable path forward for our companies will remain the path that I personally provide for us by literally carrying this on my back while doing expert witness work for my clients.
I wrote about this general predicament of insufficient access to new capital in my previous Letters to Stakeholders:
http://homelandforensics.com/Company/Letter_to_Stakeholders_December_31_2007.pdf
and,
http://homelandforensics.com/Company/Letter_to_Stakeholders_December_21_2008.pdf
In parallel with Homeland Forensics/Public Startup Company/ADIA public offerings, I have also commenced an Initial Public Offering for my company, Risk Nerd Limited, which is inviting public investors to fund the creation of a new Chicago Loop data center for global financial market software development and social media.
http://risknerd.com/iDays
Together we have designed and launched very valuable businesses. They are worthy of capital. With new capital they will grow.
I would like to take a moment to recognize the original Chairman and CEO of PivX Solutions, Rob Shively, without whom we would not be here today attempting to build upon this business legacy.
http://www.linkedin.com/in/robshively
https://twitter.com/TopspinRob
Rob died on September 27, 2013 at the young age of 53 due to complications from heart surgery.
http://www.tributes.com/show/Robert-Neil-Shively-96464226
Thank you for your continued support and dedication to our cause.
The Adia probiotics website is being relocated to a new server, less expensive and also better able to handle traffic spikes. My cloud computing and Big Data startup is doing the engineering and hosting development work on this to make it compatible with Amazon Web Services, Rackspace, and other public cloud providers, and to ensure that every investment we make in technology for one public startup company benefits all of them equally.
Adia's probiotics products are the basis of the Adia Probiotics public startup, which is becoming a new subsidiary and a spin-out (eventually) of Public Startup Company, Inc. so the Adia probiotics products you love are not going away.
In fact, the site is down only because I was able to get a final agreement with Bill Hodson to get physical access to the probiotics inventory that LiveWire has continued to hold and to negotiate around since July!
We will be able to resume filling orders, so it is a good time to relaunch the adianutrition.com website but do the engineering work for the e-commerce infrastructure better this time than it was done before.
Thanks for the good question.
Most of the potential competitors have not entered this market yet but are looking at it carefully or even developing solutions and preparing to launch. It will not be clear who is directly competing and who is just launching a crowdfunding portal or a new startup stock exchange, neither of which are competitive to Public Startup Company, until the dust settles on this new industry.
We are not trying to be a crowdfunding portal, instead we help our customers use crowdfunding portals. For example, if Kickstarter decides to allow equity crowdfunding then our customers will be offering securities through Kickstarter rather than just offering 'perks' and benefits for product or service pre-sales crowdfunding campaign backers (the way that Kickstarter works today).
We are not trying to be a stock exchange, instead we help our customers learn how to do their own direct public offerings of unregistered securities using social media and direct marketing.
When and if our customers' investors wish to trade those privately-held unregistered securities in a secondary market, existing venues like Shares Post and Second Market facilitate that exchange.
Our product and service market positioning and message development are still in-progress but the core opportunity is already clear and people are responding very positively to our proposals. I will explain what we're doing in more detail later and provide copies of our Terms of Service. It seems wise to limit the distribution of the business strategy documents until we are in a position to bring this to market on a larger scale, otherwise we're just giving away the discovery of a valuable new business model before it has been protected either by patent or by business development.
It is still a process of customer education to teach prospective customers that the 80-year-old law changed so that it is now legal for them to offer to sell shares to the public, but next year when the final JOBS Act Title III (crowdfunding) Rules go into effect we will have the benefit of piggybacking on other people's efforts to educate the market.
The Public Startup Company website is:
https://publicstartup.com/
and also:
http://JOBS-ACT.com
... plus others.
Our first-generation system allows for partners and customers to easily rebrand the public startup website, and to use our system for the initial web hosting of a startup's first web page which is auto-generated from a business facebook page based on the facebook username.
Obviously this is not where the system will end, this is just the beginning, but doing this at all was illegal prior to the JOBS Act. It is important that unregistered public offerings be done right and have the political support of legislators and regulators, so even if we did have sufficient capital right now to roll out version 2 it would be premature to do so.
Our first large advertising campaign will commence soon, and I will post details when it starts.
Yes, Public Startup Company is operating and signing up customers. We have produced our first revenue and an update will be provided soon.
There are pending JOBS Act Rules that will have a material impact on the procedures we use when doing unregistered public offerings and using social media to promote public startups, so we are moving slowly on purpose to ensure regulatory compliance. See:
http://www.sec.gov/comments/s7-06-13/s70613.shtml
The OTC Market flash halt is off-topic, but to answer your core question: inability to trade something does not remove any of its value it just temporarily removes liquidity.
Price is a discovery of supply and demand, often indicative of the most recent marginal exit. Economists tell us that the marginal buyer sets the price -- people who stretch themselves in order to be able to buy in the first place. Marginal buyers are the minority of the owners in any market, but they are also the most active and most eager sellers. When lenders are present to help marginal buyers buy, markets function better but that doesn't mean they are always liquid nor does it mean prices always go up.
If an electronic trading platform closes (temporarily or permanently) this has no impact on the underlying value of the things owned that are or were traded in that market. If you think that helping marginal sellers with liquidity is a compelling business opportunity, you could create an alternative trading market or a website where you are always on the bid for everything but in that case at what price are you always willing to buy anything that anyone else urgently wants to sell and can't find a buyer for elsewhere? That doesn't sound to me like a very good business, but if you feel compelled to create it then it could work out very well and open new doors to new business models.
If you decide to launch such a business, and you want the help of Public Startup Company to develop it with public investors, then you're invited to contact us and we'll provide that help to you just like we do for other public startups.
An 8-K has been filed regarding 10,000,000 shares that were clawed back after being issued improperly back in March.
More shares are also in the process of being clawed back -- this is a lengthy process, but it is happening. See:
http://www.sec.gov/Archives/edgar/data/1160420/000116042013000007/0001160420-13-000007-index.htm
Remember also that Adia was originally supposed to be just one of three lines of business of 3Me, Inc.
http://www.otcmarkets.com/edgar/GetFilingPdf?FilingID=7772832
When Shelly and Wen were unable to get the other two lines of their business going at all, in 2011, they chose to change the name of the company, again, from 3Me, Inc. to Adia Nutrition, Inc. and to make the business just one thing instead of three.
When they further failed to conclude the spin-out of Homeland Forensics, Inc. as previously agreed, everybody ended up with a serious problem. The solution is what we are doing now.
My willingness to agree, in 2011, to the new plan for the company, under its 3Me, Inc. name, hinged on the spin-out of Homeland Forensics, Inc. AND on the future R&D and new public startup company development efforts that 3Me, Inc. was supposed to have undertaken.
Not all business plans work as expected, but every plan that I design and execute certainly will. I do not start things that are not already viable from the beginning, and I will not tolerate a method of execution that is uneconomic. All startups have an infinite runway of time and funding if they are not burning through capital uselessly trying to make things look big. Things grow to be big if people love them or if people need them, and not because somebody destroys a bunch of capital real quick just to put on a show.
Both.
The probiotics business always needed to be a separate legal entity, and it makes no sense for Homeland Forensics, Inc. to own a probiotics subsidiary -- that is illogical, it actually causes people to get upset when they think about such a thing. People have an emotional reaction to concepts of ownership and control, and to names of things and to perceived relationships between them.
What DOES make sense is for the probiotics subsidiary to be launched by Public Startup Company, Inc. -- that is its mission, to launch such public startups and to crowdfund and to grow them with the help of "forensic social media" platforms and crowdsourcing.
The plan is to provide shares of EACH future public startup spin-out and startup subsidiary launched by Public Startup Company, Inc. to the holders of Public Startup Company, Inc. shares -- those shares are going to be distributed to the holders of ADIA stock, pro rata, when the spin-out is complete. There is no need for that spin-out to be finished urgently, but there is an urgent need for the new Adia Probiotics startup company to be launched, so that it operates the probiotics business rather than Homeland Forensics, Inc. operating it...
When the ticker symbol change is approved by FINRA and we switch from using ADIA as our symbol and corporate name to using our new ticker symbol and the Homeland Forensics, Inc. corporate name it is important to understand that the operations of each startup and subsidiary will be legally separate from the parent company, but the ownership and control will (initially) be identical. Making these structural changes prior to recapitalization is pointless, but the changes will be made at the appropriate time.
There are regulatory issues to take into consideration here also, including the fact that an offering of shares in a new spin-out company can be deemed an "illegal" unregistered securities offering if rules are not followed. Before we start announcing the other things that are being done that may result in future spin-out companies, we must get the basic corporate name change, ticker symbol change, and subsidiary formation completed.
We are not making an offer of unregistered securities by describing the plan for the subsidiary relationships and the proposed method of protecting the equity rights of our shareholders. Everyone needs to know what the plan is for the probiotics business assets, now that those assets are not being "sold" to LiveWire in exchange for LVVV shares or warrants as envisioned previously.
All holders of ADIA shares will be receiving shares of the new Adia probiotics subsidiary of Public Startup Company, Inc.
You did NOT invest ONLY in probiotics, and that portion of your investment that you believed was an investment in probiotics still is an investment in probiotics. The Adia probiotics business is becoming a "public startup" and the operations will be far more economic and more likely to produce profits than anything done with the business previously.
Thank you for staying involved, things are moving forward.
The Adia probiotics subsidiary of Public Startup Company, Inc. will definitely pursue such opportunities.
Send more information about the direct sellers network you have in mind.
The holders of the certificates are not overseas. We're talking about a small number of certificates issued to U.S. persons.
This has nothing to do with buyers who bought free-trading shares through stock brokers.
Our concepts are sound, they are highly-scalable, and they produce substantial profits when marketed and sold to customers.
As you know, having been involved in this tech venture for over a decade yourself, without capital with which to expand the scale of sales and marketing the limitations of this business are reached the moment that the technical experts are all busy working on billable projects.
Periodically this results in very large profits from large projects or from projects that provide us with a lot of leverage. To self-fund from consulting revenues is a slow, painstaking process that requires very unusual dedication to the long-term shareholders.
The question has always been whether this venture can scale up in a highly-leveraged manner, requiring only a small amount of capital, such as the amount that can be self-generated from consulting profits. How many decades are you willing to wait for that slow process to unfold? Entire industries have been born, boomed, and died in the span of time that we have tried to self-fund.
With capital we can scale up not only our global expert witness and forensic services, and our expertise with startups, but we can also bring our dozens of technically-sound, highly-scalable and profitable tech products and automated information services to market cost-effectively so that they produce leveraged profits.
With capital we can also secure patent protection for our most valuable inventions, which is a necessary first step in any startup and a step we help our clients and the co-developers of our Public Startups complete already.
The amount of capital that has been invested in our tech venture and our Public Startup Company crowdfunding platform since 2006 has been so small that we have gotten the growth we have paid for, just like most companies. It appears that we have finally built the infrastructure, slowly and capital-efficiently over time, for the launch of our products and services that are able to grow without every dollar of growth costing us a dollar of capital.
As soon as our new operational metrics become clear, for Homeland Forensics and Public Startup Company, we will publish these metrics along with real-time financials. Quarterly financial reports will be forthcoming, also, but Public Startup Company, Inc. has a mechanism for real-time raw financial data disclosure that we are going to be using ourselves, as the first "public startup" and as the proof-of-concept model for others to follow. Stay tuned.
LVVV can distribute the Adia probiotics if they wish to do so.
There is nothing to distribute unless there is capital with which to manufacture additional inventory. Do you blame LVVV for choosing to use their limited capital to manufacture their own products rather than manufacturing ours? That was a no-brainer.
The problem with the previous LOI was that we were expected to pay LiveWire to take the Adia probiotics brand from us. How on earth did that ever make sense? If Wen and Shelly had the money required to manufacture additional Adia probiotics inventory, why wouldn't they have used it to manufacture Adia probiotics inventory?
After doing that manufacturing, the least-cost way to achieve widespread distribution, sales and marketing is to do it yourself.
The probiotics business is becoming just one of our Public Startups and it will be more likely to produce value for us in this way than if we had paid LiveWire to take the business from us.
Pre-Empt has always been valuable and useful for many applications, not just Host Intrusion Prevention security.
It is going to be updated in a new release, and ported to other platforms (mobile, tablet, Android, non-Windows, plus virtual machine hypervisor/cloud platforms) to re-launch as an updated and fundamentally-better security software product, yes. But it will also become other products that we are not ready to announce yet.
The method of securing the compute device that was employed in 2005, reverse engineering of vulnerabilities and development of custom security fixes that the Pre-Empt software attempts to inject (as unauthorized arbitrary code) at runtime into vulnerable software, was not economical and it was not easy for customers to manage.
The theoretical security benefit of being able to fix a security flaw between the time of its discovery "in the wild" and the time that an official vendor security patch became available did not outweigh the actual difficulty of managing the quality assurance and stability risks that were posed by our attempt to force our unauthorized "fix" code to execute in place of the vulnerable software from the original software vendor. In every case, the official software vendor security fix is the preferred remedy to specific security vulnerabilities, so it never made any sense to me that our product would knowingly tolerate out-of-date software just so we could try to sell customers subscriptions to our custom security fixes!
Here's just one example of what DOES make sense, a strategy in which the product lets the owner of a compute device digitally-sign the software they want to allow to execute on their device while blocking the execution of everything else, including malicious code that might attempt to hijack vulnerable software that we all receive and use daily from OS and application vendors:
http://www.google.com/patents/US20080025515
We stopped accepting new paying customers in 2006 because we did not have funding with which to keep the intrusion prevention definitions up-to-date and to switch to a strategy that was more commercially-viable compared to this approach. We have always had more commercially-viable strategies available, but the company must raise substantial new capital before most of those options will become achievable in practice. It was always expected that it would take years to turnaround the company and to raise that new capital.
I am happy with the progress that has been made since 2006, especially considering the significant new products, computing platforms, prototypes and lines of business that we have been able to launch primarily around our core expertise and our intellectual property in forensics, security, social networking, crowdfunding and expert witness services -- this core expertise was the source of our previous software products, including PreView Security and ThreatFocus, and between 1999 and 2013 that expertise has itself been the source of millions of dollars of revenue while we did not previously achieve any significant scale of software product sales or licensing revenue.
If re-launching Pre-Empt means providing high-value services in the areas of "Managed Forensics" (http://www.managedforensics.com) and "Forensic Social Media" and "Public Startup Company" secure and forensically-transparent collaborative crowdfunding and crowdsourcing so that everyone, everywhere can receive expert help and material support for the productive work they are doing then that will be a huge success even if we never return to the old software licensing sales model.
Our industry has moved away from the old licensing model for software. The future of our business is more likely to look like automated digital services and renewable subscriptions to forensic computing platforms and security features that we provide to every computing endpoint in mobile and cloud ecosystems. The only missing component right now is capital, and we're working on that.
The certificates cannot simply be returned without signatures. The transfer agent must have Medallion Guarantee certification of the signed endorsement on the back of each stock certificate.
The delay is a mix of inexplicable hold-outs who are misinformed (temporarily) and who are resisting becoming properly-informed for emotional reasons, and others who actually do just need more time.
Rob Shively, the co-founder and original CEO of PivX Solutions, died recently, and he is one of the certificate holders in question here. Presumably his son will take care of the return of that certificate in due course, but that can happen months from now without causing any problem.
It doesn't seem to be more expensive, and it provides more than just a notary witness of a signature -- there is an insurance policy of some kind (the "Guarantee" part) that financial institutions subscribe to so they can participate in the program to spread the risk of forged certificates and forged certificate transfer orders.
It takes time to finish the return of the certificates because a Medallion Signature Guarantee is required from the bank where the certificate holder holds a bank account. This ensures that the certificate holder was truly the party who signed to endorse the transfer of ownership (in this case, back to the company, rather than to a new third-party shareholder).
The shares were not issued for consideration.
Shares that were legitimately purchased are not being recalled. According to reports and records available presently, shares were sold for $0.03 per share back in 2011, and those shares are not the subject of this certificate recall.
The first 10,000,000 shares are already in the process of being returned to the transfer agent, and I'm confident more will soon follow. There are two simple ways to compel the return, for anyone who does not voluntarily return the shares, the first step being to file a 1099 with the IRS to report that the shares were paid to the certificate holder in the form of non-employee compensation.
The second step is to contact the FBI and request help with this matter, help that will be forthcoming and has already been offered if it is needed. There are very serious criminal legal issues here that go away when the shares are returned.
Raising new capital is waiting on the return of the share certificates issued improperly by Wen Peng and Shelly Singhal.
We have a fully-functional business, not just a template. And yes it will require capital to scale up in a timely manner.
There is no SEC filing required to commence either a crowdfunding campaign or a general solicitation and general advertising campaign pursuant to the new Rule 506(c) which went into effect on Monday.
There is a new confidential submission process for sending general solicitation materials to the SEC and I have used it and will continue to do so:
https://www.sec.gov/forms/rule506c
There are Proposed Rules that might create a more useful and important pre-solicitation filing procedure, but those additional Rules such as Rule 510T and a revised Rule 503 and a new Rule 509 will likely go into effect within the next 12 months, and probably sooner rather than later.
Prior to commencing our general solicitation and general advertising we must finish recalling the shares that were improperly issued earlier this year. We have the first share certificate in the process of being returned to the transfer agent already, for 10,000,000 shares, and I am sure there will be more certificates returned also.
Our crowdfunding campaigns will be far more effective when we first raise additional capital with which to advertise and promote our crowdfunded product and service offerings, so the priority at the moment remains the commencement of our Rule 506(c) general solicitation. As you noted, that will include the use of social media and other Internet-based advertising. The precise timing has not been decided yet, but it will be started soon.
There was no "trying to take" here at all. The people who invested in the probiotics business directly would have been guaranteed to be the first to receive a future benefit from the growth of LiveWire and the Adia probiotics together.
Your question is irrelevant, and so is the answer.
Adia would have paid hundreds of thousands of dollars for the privilege of investing in LiveWire.
You keep beating a drum to a song that isn't playing anywhere except inside your own head.
The decision not to work on reaching a final agreement had everything to do with what I described in my previous messages, and had nothing to do with price. We were not hung up on price. It was going to be complicated to make it work well for everyone and as I said it was going to place more short-term burden on LiveWire which was not what anyone had expected back in May.
If you have any actual questions, and after you speak with Bill and offer a public apology for your mistreatment of me, then I will be glad to resume answering your questions.
I decided not to ask for shares at all, and it was very challenging to try to figure out what the right terms would be. What made the most sense to me was complicated, as you can probably guess, and what I proposed was that Warrants be issued to Adia and to its key employees (to the co-founders who built the probiotics business, but not to me). I also explained that the Warrants would be put into an escrow account, so that when exercised in the future the shares would be held by a third-party so that they could not just be dumped on the market and so that when sold the proceeds would be used properly, as intended and as required by applicable corporate law for the benefit of stakeholders equitably.
Your personal insults are what is over the top. Did you even read the original LOI ?? The way it was described in the press release was not very clear, and I think you are overreacting (and have always been overreacting) to the $1M stated "value" of the proposed transaction. That number was never as meaningful as you seem to think it was. I don't know exactly what your problem is, but please talk with Bill before you hurl any additional misinformation or insults here. Thanks.
Your insults and your attempts at ridicule are misplaced and wrong.
You should apologize. Seriously. Go ask Bill yourself, there could have been an agreement but it did not seem workable, and there is no point in trying to make something work that just won't work. Adia Nutrition needed LiveWire to do too many things that Adia was supposed to have done, itself. Our ability to make up for this near-term shortcoming in the future, including delivering new sales growth from our continued efforts in cooperation with LiveWire, were never in doubt. But if you are LiveWire, why do you want to add a new product that will create near-term hardship when not adding that product is easier, less risky, and a better use of your own limited cash flow and sources of capital?
The bottom line was clear enough: if LiveWire was willing to wait until later to receive material help from Adia, then there was an agreement to be had. You need to retract your outrageous accusations and stop with the insults. From my point of view, the unprofessional conduct of my potential minority co-owners is a material factor in deciding how eager I am to invest my future efforts, and how willing I am to entrust my past investment and my shareholder value, in a third-party's hands -- when you engage in these accusations and insults, you do real harm to the potential for anyone else to be willing to align with you in a business where you are a minority owner. This is the same basic point that I made previously about your insulting language "penny CEO" which, when you use this language habitually as you have because you think it hurts me emotionally what you are in fact accomplishing is to let everyone else in the world (whomever you have the ability to influence with your words) know that if they ever become a CEO of a small OTC-quoted startup company that they too can expect to be insulted from the start and they can expect to be disparaged as a less-than-human, less-than-ethical, lesser person who should be tarred and feathered for the wrong they have done by being a CEO whose "public" company is not big enough to list on an exchange.
Before you continue hurling unfounded and misinformed insults, perhaps you would like to watch the video interview with the CEO of OTC Markets where Cromwell Coulson says many of the same things that I have been saying here. See:
http://www.otcmarkets.com/stock/OTCM/video-and-presentations?cmdId=83
What makes you think that cancellation is a negative thing for anyone here, and why would you blame this not-harmful-thing on me? That is weird.
Nothing "happened" between me and LiveWire. Ask Bill yourself. It is outrageous that you would make such an accusation.
I did not swoop in and try to "pig out" -- given the circumstances as they already existed as of July 15th there was a possible agreement if, and only if, LiveWire was going to be able to shoulder more of the burden than they had been led to believe would be necessary originally.
LiveWire did not want the burden of growing two startups and trying to make two groups of startup investors happy. The fact that the decision to cancel took a month and a half after I was appointed the new CEO says everything you need to know here: this was not at all a harmful outcome, nor was it anyone's fault, the facts and circumstances themselves determined the outcome and we had no problem working together efficiently during the remainder of the discussions. You need to retract your outrageous accusations to the contrary.
The co-founders of Adia Nutrition don't know the scale of their own sales, are they not co-founders?
There was a bizarre separation between the operations (which is what LiveWire wanted to acquire) and the backoffice (which LiveWire was going to take over management of itself, obviously) and there is no other way to say it than the backoffice walked out the door.
Yes, I am the CEO. The previous CEO appointed me as her replacement, which was the right thing to do at the end of a long series of wrong things.
Anything worth doing is worth doing well, and anything that somebody else is doing that is worth investing in is worth the effort to comprehend fully. I agree that words get in the way of comprehension, but we have few alternatives today as a substitute for words, other than big sales numbers, to communicate about what a startup company is and why anyone would want to invest. Do we really want startups attracting capital by forecasting big numbers and pointing at industry estimates of the size of the market for the startup's products or services?
In case you did not see this, please take a moment to read:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=91492548
What I want to know, and what I am working on, is how to bring together technical talent, experienced leadership and talented capital to do something more than just place product on shelves where consumer brand loyalty dynamics and our purchasing behaviors as customers are the source of future sales. There is nothing wrong with having an outstanding product that people go out of their way to buy from you instead of the competition, but achieving scale and building brand loyalty without spending millions of dollars on advertising is hard. Google famously never had to advertise, and Apple advertises but frequently says they don't need to advertise because of all the free publicity they receive from the media and the public.
It is these "self-advertising crowds" that make new companies grow without substantial capital investment, and LiveWire is attracting a crowd to help advertise. Still, I want to see the answer to the question "what good does it do a startup company to have product on shelves if people aren't thinking about buying the product when it is not right in front of them?"
LiveWire is getting the product in front of people, but that is much harder to do for a probiotics product, even "on-the-go probiotics" like Adia's. Most companies are in the same position, customers must seek out the product on retail store shelves or it doesn't move off the shelf fast enough to create growth. The strategy of convenience store point-of-sale instead of on-the-shelf product placement makes sense for the few products that customers will actually grab on the go. I am not convinced that we can ever achieve that kind of instant value recognition with probiotic drink mix and probiotic chews.
The truth is always "what's permitted to shareholders" which should be obvious to everyone, educated or not, but it is nice to see some recognition that LiveWire's management is smart.
The SEC rule granting a "safe harbor" benefit when making potentially-incorrect forward-looking statements is the only benefit received by a public company when its management restricts the discussion to periodic investor conference calls. Without this benefit there would be a potential criminal fraud prosecution risk, and a much higher probability of shareholder lawsuits, resulting from any misinformation or flawed estimate conveyed.
I'm surprised to see you voice support for management's reliance upon the "safe harbor" -- don't you think that full disclosure without an affirmative defense against fraud accusations would be more likely to result in public company management telling the truth and being precise and accurate more of the time?
I think it is common sense that a policy of full disclosure transparency is superior, at all times and in all public companies, to a policy of hiding behind affirmative legal defenses promulgated by the SEC or established by legal precedent.
Furthermore, neither LiveWire nor Adia Nutrition went public in the conventional forward IPO manner -- when a person reverse-merges and "goes public" without raising capital from the public in an IPO, while their company is still in the startup stage, this action itself is not consistent with common sense. The only tangible benefit that such public startup companies have is the ability to engage meaningfully with public shareholders by way of public discussions and a larger audience of interested people who may choose to help the startup company achieve its business objectives. If nothing of value is created in productive and truthful collaboration with "the crowd" in public then the only intangible benefit of a reverse merger as a way to "go public" is to create the appearance that new private investors who buy shares in a private placement offering might be more likely to be able to resell their newly-acquired restricted shares in the future.
Considering that securities law requires that private placement investors never buy shares "with a view toward distribution" it is hard to see any common sense in NOT making use of the only tangible benefit that comes from a reverse-merger. Why would anyone "go public" without capital, and thereby accept the financial and legal burdens of 1934 Exchange Act compliance, then NOT communicate freely and truthfully with the public in ways that are not achievable in practice by remaining private?
We still do not have an agreement with LiveWire.
The contemplated sale and license would be exclusive to LiveWire with respect to manufacturing and distribution through the regional reps like Adia Asia as well as to all retail points of sale. When we sell the product ourselves the orders would be fulfilled in the same way, as though we are just another retailer or wholesale distributor partner of LiveWire.
If an agreement is reached and an exclusive license is granted, we would need to defer to LiveWire's business process for disclosing sales estimates and sales numbers.
At this moment it is impossible to provide an update beyond the obvious: the existing inventory is selling and the proceeds are being deposited to our bank account. It is not yet clear what the scale of those sales are. Some of the inventory has expired by now and will become promotional material and display props for our future marketing campaigns but will not be sold. It is not yet clear how much inventory has expired, nor how much inventory is still on-hand and still present on store shelves in our distribution channels.
The co-founders of the Adia probiotics business have been deciding what they want to do next, and everyone is exploring options. Any outcome, and any growth strategy from this point forward, that honors the rights of all stakeholders and produces new opportunity to expand the customer base in economic time at a steady pace will be a good outcome here. The most important next step is to finish raising additional capital, and that does not hinge on the status of the probiotics inventory nor the current/historical pace of probiotics sales.
There is no conflict in having conversations and reducing the amount of misinformation and rumor that people are inclined to spread. Deciding whether to accept shares of stock of LiveWire as payment for something of value is a judgment call that depends on all sorts of factors, including whether there will be future conflicts between the equity holders as a result of the shares that would be issued to the seller in the proposed transaction. To be able to reduce conflicts, there must be a way to discover the existence of disagreements and potential problems in advance. In my opinion, public discussion helps reveal those risks.
The other type of conflict, the conflict of interest you reference with your question, doesn't exist in this case. Posting anonymously and leaking information or rumor that might be beneficial or detrimental to the position of either party would be a conflict of interest here, but getting to know one's prospective co-owners and hearing all of the pros and cons from each possible viewpoint is not a conflict of interest. Thanks for the good question.