@JasonCoombsCEO
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Question: what is the proposed share structure of Homeland and what is required at this point to execute the spin off?
Answer: the number of shares that will initially be outstanding will be only those shares issued by way of the dividend, plus any shares purchased by investors who participate in a new private placement coinciding with the incorporation event. I expect the share structure (shares authorized) to be identical to that of the parent company. To officially declare a dividend, ADIA must first obtain approval from FINRA, even though the shares of Homeland Forensics, Inc. will need to receive a separate Form 211 approval in order to be quoted Over The Counter. It will take longer to obtain FINRA approval if we attempt to dual-track the Form 211 approval with the dividend/spin-out approval, and the only reason to do that would be if we also file a new Registration statement with the SEC or seek alternative methods for the issuance of free-trading securities to some or all of the dividend recipients, if there is any way to issue free-trading dividend/spin-out shares to holders of free-trading ADIA shares other than registering the shares under the 1934 Exchange Act. To accomplish all of the above, ADIA just needs to form the new corporation and finish raising the required seed capital for the spin-out.
Question: Do you a a possible target date (in a perfect world scenario)?
Answer: the timeline depends on available capital. That in turn depends only in part on ADIA, because a new private placement Offering can be commenced, and a Form D can be filed with the SEC, prior to incorporation. When everyone who needs to do their part to finish the spin-out is ready to do so then things will either move swiftly or the new corporation will begin to operate while regulatory approvals are obtained for the preferred mechanism of startup -- that preferred mechanism might be something like an Emerging Growth Company IPO. To utilize this, or any other provision of the new JOBS Act to kickstart Homeland Forensics, Inc. the SEC must publish final Rules, which means the new SEC Chairman must be confirmed by Congress and get to work!
While Wen is focused on other things, and while investors are being located for a Homeland Forensics, Inc. private placement Rule 506 Offering, there is nothing more that can be done on this. Everyone is waiting for clarity, and the growth of the probiotics business of ADIA helps to provide that clarity. Maybe it will also help with capital formation. I have suggested that Wen launch a Kickstarter campaign, but she hasn't responded specifically to this idea. If the shareholders were all to join together in a collaborative effort to design a Kickstarter campaign for her then I'm sure she would approve and execute it without hesitation.
Any volunteers?
Sincerely,
Jason Coombs
Maybe a comprehensive competitive analysis would be helpful to supplement the iBox for this discussion board.
We have all seen the competition's television ads, paid for by big pharmaceutical companies or vitamin brands. Such as:
http://www.digestiveadvantage.com/
But nobody has On-The-Go Probiotics other than ADIA from what I have seen. Why would anyone try to swallow pills when drink mix and chewables are so much more enjoyable and practical?
Does Adia have a patent pending yet for powdered drink mix or chewable probiotics? Anyone know of any similar patents already issued to anyone else?
Regards,
Jason Coombs
The $10K of seed capital is an equity investment in Homeland Forensics, Inc. that was promised by Wen and her investment banker after Wen joined PivX Solutions and together we designed the plan for 3Me, Inc. which was originally going to be not just Adia Nutrition but two other initiatives, also. The two other lines of business for 3Me, Inc. would have built a platform for direct-marketing and television infomercials that would have sold more Adia Nutrition products than have been sold to date through retailers. The existing business would be stronger today if the 3Me, Inc. plan had been executed fully. Wen and her investment banker have not explained why they changed the plan and renamed the company Adia Nutrition, but I have always supported them in doing what they thought was best -- it is their job to execute a workable plan, not mine, and execution is very hard.
When Wen and her team proposed renaming the company 3Me, Inc. they also proposed that they would spin-out Homeland Forensics, Inc. -- I agreed to resign, and we agreed that none of the ongoing expenses of the Homeland Forensics business would be paid by 3Me, Inc. so that the cash flow of 3Me, Inc. would be available to fund growth. The company's previous accountant, lawyer, and landlord in New Zealand have been waiting for two years to be paid, and the amounts due altogether exceed $10,000.00 -- Adia Nutrition has essentially drawn on these vendors' goodwill and vendor credit in order to buy it time to conclude the spin-out. To ask the spin-out to pay these expenses itself out of its future seed capital made sense, and it still makes sense.
Do we want to micromanage Adia Nutrition or do we just want the company to make good choices and to grow? If micromanagement would help Wen then I would repurchase my Preferred stock and micromanage. I don't want to run a probiotics business, so I would in that case spin-out the probiotics assets and provide Wen with seed capital. What is it about this that would not make sense? You think I should repurchase my Preferred shares and then insist that Wen and her team buy the probiotics business from me for $10K? How would that make sense?
I appreciate your good questions. Thanks for asking.
Sincerely,
Jason Coombs
The reason for the spin-out of Homeland Forensics, Inc. is that everything that PivX Solutions, Inc. created with its previous capital and its investors prior to 2006 is still owned by Adia Nutrition, Inc.
The spin-out vests ownership of those assets into a new entity so that Wen Peng and her team are not involved in the management of the spin-out yet the shareholders of ADIA still own the company.
If you do not wish to be an owner of Homeland Forensics, Inc. shares at the time of the spin-out then you can decline the dividend shares.
Sincerely,
Jason Coombs
Do you believe that a company exists for the benefit of the people who control it, or for the benefit of its owners?
I believe a company exists for the benefit of its owners.
Out of the approximately 1,000 owners of ADIA the vast majority of us acquired our shares when the company was under the control of the PivX Solutions, Inc. management.
Adia Nutrition's current management team may not have a short-term financial incentive to finish the spin-out, but that is irrelevant because the company doesn't exist for their personal benefit. If you believe that it does then you should send them your money instead of using it to buy shares.
Anyone who does not wish to receive shares of the spin-out is free to decline when that time comes.
Sincerely,
Jason Coombs
An 8-K previously announced the planned spin-out. See:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82510143
Your question "How do you spin out with $100K" is unclear. I am not saying that Adia will be providing $100K to Homeland Forensics, Inc. when the spin-out is finished. I said that my team raised $100K of new capital last year. We are expecting to raise much more than that this year, and some of the capital will be allocated to grow Homeland Forensics, Inc. especially to relaunch its product development and sales cycles.
Adia agreed to provide just $10K and that is sufficient to cover the startup costs. Were you trying to ask "How do you spin out with $10K ?" The spin-out does have products to sell, yes, but more immediately it has forensic services and information security-related services to provide on a consulting project basis, and yes it has clients. It will have revenue immediately, when the seed capital is provided and when the costs to incorporate and finish the issuance of shares to all of the ADIA shareholders are paid. I understand that Adia needs to raise some additional capital in order to finish this spin-out, and in order to distribute the dividend shares of Homeland Forensics, Inc. to the existing ADIA shareholders.
Any other questions?
Sincerely,
Jason Coombs
My companies raised $100K in new capital last year and we are ready for the spin-out of Homeland Forensics, Inc. to be concluded, as Adia and its lead investment banker agreed.
I have been trying to get clarity from Wen about all of this, but she has chosen to defer to her investment banker to decide how, and when, to provide any information to me and my team about either Adia or Homeland Forensics, Inc.
We acquired JOBS-ACT.COM and have been laying a foundation for raising additional capital in accordance with the JOBS Act when those pending rules finally go into effect under the next SEC Chairman.
If Wen needs time to comprehend and adapt to changing regulatory and capital formation dynamics then that is not surprising and she should be supported in moving forward slowly and deliberately, but I am also becoming impatient and would like to see some action by Wen to bring the company to the next level soon.
As my own experience showed me while working on building a new public company, with the starting point that was acquired in 2004 when PIVX was listed on the OTCBB, there are many people who pull any publicly-traded company in many directions simultaneously. Only Wen or the majority vote of the shareholders can assert the final decision-making authority about what the company will do to attempt to grow, but too often that reality ends up being obscured by the noise of everyone's competing self-interest. Hopefully Wen has good advisors guiding her.
Sincerely,
Jason Coombs
New investors want to see substantial sales. A unique and compelling product is rarely a reason to invest. When the idea alone is good enough it must still have a compelling management team executing a ready-to-scale strategy, otherwise investors usually prefer to wait until a practical deadline appears. Take a position now or miss the opportunity. It isn't enough to have a large list of impressive friends like Whole Foods.
Fear that Bayer might be considering acquiring Adia Nutrition is the kind of thing that brings in substantial new investors!
Where is the business development strategy that will scale up sales without such M&A?
Competing products don't have the same on-the-go enjoyment qualities, the probiotics that I've seen advertised elsewhere are packaged in capsules. Is there any direct competition for gummy chews and probiotic drink mix?
http://www.ispot.tv/products/nn/probiotics
Bayer TruBiotics
http://trubiotics.com/
www.youtube.com/watch?v=g0S7SzkDUbI
Feb 26, 2011 - Uploaded by work2166
Faulding Probiotics TV Ad. ... Culturelle probiotic "Bacteria is Beautiful" TV ...
Culturelle Probiotic TV Commercial - 2011
Yes, 5,000,000 restricted and 20,000 free-trading.
I also hold the option right to re-acquire from Wen's team the 10,000,000 Preferred shares until those shares are retired by being repurchased by ADIA itself, at which time the 50,000,000 votes that the 10,000,000 Preferred shares represent will be extinguished. This way, at least for the duration of a single vote by the shareholders, only the owners of the Common stock will have a vote on whatever issue the company has on which a shareholder vote is required. The steps required for ADIA to be able to complete this redemption and retirement of the Preferred stock have not yet been concluded.
Can somebody please explain why Investors Hub policy prohibits posts directed to or about other users? Is it policy for Admins at IHUB to remove posts even if they are not otherwise improper merely because the posts are discussions between or about other users?
Thanks,
Jason Coombs
JCoombs@HomelandForensics.com
A direct investment cannot always be priced based on a discount to market, particularly not in the case of a private startup that is raising seed capital or an early-stage thinly-traded OTC-quoted company like ADIA that is raising capital for immediate growth.
gamood wrote:
"Buying shares directly from the company require a substantial investment, usually and the shares have a one year restriction. That is why restricted shares are sold at a discount to the market."
Under the revised Rule 144 that went into effect on February 15, 2008, a registered, fully-reporting, 1934 Exchange Act-regulated company (as ADIA was when it was known as PivX Solutions, Inc. from 2004-2006) the holding period for restricted shares is only six months.
Consider, in the case of ADIA, the price you would pay to acquire millions of free-trading shares through a broker. If you offer to buy at current market price, who will sell to you in such large quantity? How much do you think you would need to offer above the current market price to attract new sellers and fill your order?
If the company won't even sell to you at current market price, then you have a choice to make: pay a higher price or you don't get shares. Are you willing to pay brokerage fees every day to buy a few thousand shares on the bid? After 12 months, how many shares would you have by doing this in the case of ADIA? With an average daily volume under 40,000 shares it would take a very long time to accumulate shares in that way, which leaves the same choice to make: pay a higher price or you don't get many shares.
If this remains your only choice to make, then it makes no sense to wait for free-trading shares. Investing directly in a private placement offering is what Accredited investors would do in a situation like this one, if they want shares. The private placement gives the company capital, immediately and directly adds value to the shares being purchased. Plus, the price paid by the investor will still be lower than the price they would have had to pay to acquire shares through a broker in secondary market transactions.
The direct investment approach can also form a strategic partnership for the investor. How much are existing distributor relationships such as Whole Foods worth to an investor who would like to expand their own product sales channels with the help of the Adia management team? When the investor is able to benefit from working with the company, and when the strategic partnership adds value for everyone, why does it make sense to price that investment at a discount to market? Discounts make no sense for strategic investors unless the market price is too high, which is why most M&A transactions price at a premium to market not at a discount.
Quality capital, smart capital, from well-positioned long-term strategic investors, can (and does) price shares with a different calculus when the free-trading market is pricing backwards-looking or worst-case market conditions. Buying free-trading shares at a discount to the value that the company actually represents in the next 12 months gives you a position from which to benefit from the future investments that Accredited and strategic investors will be making, and the only reason such investors would not make those new investments is if the company isn't doing business development and isn't engaged in conversations with private investors.
I have confidence that Wen and her team are doing their job competently, and despite the slow movement on all fronts there is no doubt that there is movement. What is the right price for everything that will likely happen in the coming 12 months? That is the question we all ask every day, is it not? That question is the one we all ask about everything we own and everything everyone else owns, and everyone knows that we don't always estimate value at a discount to what the last person paid.
Sincerely,
Jason Coombs
JCoombs@homelandforensics.com
This is off-topic, per IHUB rules, but the answer is no, I was referring to your remark about long-term investors wanting to invest in growth companies. After successfully raising capital from both short-term and long-term investors, both Accredited and non-Accredited, for businesses in tech and in other sectors, I assure you that most long-term investors care more about whether the terms and circumstances of an investment help to create value and opportunity for a large number of people who will in return stay invested and work to grow an ethical and stable economy that benefits everyone, and they care less about whether they could have screwed existing investors, and everyone else in the world, just to make a bigger profit for themselves. The way the profit gets made actually matters, and it is almost never the intent nor the desire of most Accredited investors to exit their investment at the top of the market while leaving everyone else with losses.
If everyone invests ONLY in the things that are already growing quickly then everyone would be investing ONLY in derivatives linked to the US national debt, which pretty much explains all macroeconomics since 2001.
The academic and investment banking industry studies that I have read suggest that long-term investors are not driven by strategy of growth company investing, that is more often associated with speculators and aggressive investing for short- and medium-term capital gains. Long-term investors prefer positions that are safe from the adverse effects of inflation (especially energy and food price inflation) and represent companies that are well-managed for the benefit of all stakeholders, not just shareholders.
Nobody wants a long-term investment in a company that makes enemies and burns bridges, even if it does create growth and profit along the way. Taking care of people matters.
The price per share must climb above $0.03 and stay there, on a closing basis, for an extended period in order for the moving averages on both the short- and long-term charts to reflect a positive crossover. Without this technical feature to examine and follow for market support, the only investors who would be likely to invest in Adia Nutrition, in my opinion, would be fundamental investors who buy and hold for eventual organic growth that can be financed relatively easily with conventional credit and sources of self-funding from satisfied customers and better-capitalized business partners.
However, most long-term fundamental investors should be buying shares directly from the company, so that there is capital to fuel growth at faster-than-organic speed. When they do, that might cause the free-trading shares to price in that technical analysis event above $0.03, but that depends on the price at which the new shares are sold. If new restricted shares are sold at discounts to the market price of the free-trading shares then why should anyone pay a premium for free-trading shares acquired through a broker? The solution to this Catch-22 is to successfully raise capital from fundamental investors who make substantial direct equity investments in Adia, investment decisions that are only partly due to the fact that the free-trading shares provide an objective indication of the potential market value of the long-term investment.
For most long-term investors the market price is a tool of monitoring and self-governance, to encourage the company to make good business decisions, rather than being viewed by those investors as a mechanism for future liquidity. From my studies of capital formation and equity markets over the last 20 years it is my firm belief that the most likely exit strategy for a big long-term investor is to buy the rest of the company, either directly or through another company in which they are also invested for the long-term. I am looking for Adia to begin sharing details of such long-term investor relationships, at least in terms of some numbers and some prospects if not also with some names.
Sincerely,
Jason Coombs
JCoombs@homelandforensics.com
The PreEmpt product still does what it did back in 2005, which is irrelevant for most people but it is still available because there's no reason to remove it. I disabled the update server after ensuring that all existing copies of the software would remain functional until the updates could be resumed.
Adia Nutrition, Inc. is no longer a 1934 Exchange Act-registered reporting issuer. There are no requirements for disclosure, not even of material events. I always followed a policy of announcing material events through voluntary SEC filings, but Adia Nutrition, Inc. has not continued that policy for some reason. Here is the 8-K filing in which the spin-out of Homeland Forensics, Inc. was previously reported:
http://www.otcmarkets.com/edgar/GetFilingPdf?FilingID=7772832
No offense taken. Wen has made it clear that she has no intention of providing anyone with updates about the spin-out of Homeland Forensics, Inc.
In 2010 I personally produced enough new capital (unrelated to PIVX) to set in motion everything that has happened since that time, and I am actively negotiating multiple avenues for new capital specifically for the Homeland Forensics, Inc. spin-out. The amount of capital, and the mechanism for it to be received, in terms of the probiotics business is being determined by Wen and her team.
If you were following the events and the disclosures from 2006 to 2011 then you know that I have not revealed anything new in answering questions here again recently. There is news to report already, and there is no urgency to report it just now. When it gets reported, I will be the one who reports it so that it gets reported accurately.
Yes, the PivX PreEmpt software, and the other software products of PivX Solutions, are still a viable and saleable asset. They are long-term capital impaired assets, as you know, because they have not been updated since 2005. It will definitely be possible to re-launch these and other PivX products and services. This is part of what Homeland Forensics, Inc. will do when the spin-out is complete.
ADIA will provide details of other spin-outs directly. The other two questions can't be answered here without violating the IHUB guidelines.
Adia Nutrition, Inc. is formerly known as 3Me, Inc. which is formerly known as PivX Solutions, Inc. which is formerly known as Drilling, Inc.
PivX Solutions, LLC conducted a reverse merger with an OTCBB shell company, Drilling, Inc., back in 2004 when Drilling, Inc. became PivX Solutions, Inc. Then, In May of 2011 all 10 million Preferred Shares were sold and PivX Solutions, Inc. became 3Me, Inc.
It was the plan of 3Me, Inc. to pursue new lines of business in three distinct market segments using new capital that the company had located. The terms of the sale of the Preferred Shares included the requirement that the Preferred Shares would be repurchased, redeemed and retired by the company in the future, so that the Common Shares would be the only shares authorized and outstanding.
The debts of PivX Solutions, Inc. are the debts of Adia Nutrition, Inc. there is no difference between the two and Adia Nutrition, Inc. was launched by PivX Solutions, Inc. -- this is not a case of a reverse merger with a shell company because PivX Solutions, Inc. was never a shell company. It was an insolvent and struggling company that needed a dramatic change to its business strategy and new business partners who know how to create value from an insolvent starting point in a long-term corporate turnaround.
Here is the ADIA / PIVX Form 4 filing for former PivX Chairman/CEO Jason Scott Coombs on May 23, 2011:
http://www.otcmarkets.com/edgar/GetFilingPdf?FilingID=7954743
Explanation of Responses:
( 1) Jason Coombs holds a right of repurchase for the 10,000,000 Preferred shares if the Preferred are not redeemed by the company from the
current Preferred shareholder prior to September 22, 2011
( 2) Jason Coombs holds a right of repurchase for the 10,000,000 Preferred shares if the Preferred are not redeemed by the company from the
current Preferred shareholder prior to September 22, 2011
5. Amount of Securities Beneficially Owned
Following Reported Transaction(s)
Common 5,020,000
Your question is a great one, and I'm happy to answer it to the best of my ability. Yes, the bulk of the long-term debt is from 2004-2005 when the company raised millions of dollars of capital from hundreds of private investors, and accumulated debts such as lease debt on the company's headquarters in Newport Beach, California. The debts rose faster than the revenues, and a number of factors converged that made it impossible for the company to raise additional capital in 2005 to remain in its Newport Beach headquarters with its previous staff and business strategy.
There is a statute of limitations on the enforcement of debts, and it is my understanding that the time period in which most of the creditors might file lawsuits seeking to enforce old debts has expired as of a number of years ago. There are a few outstanding judgment creditors.
I am not a member of Adia Nutrition's management team and I never have been one. I am not a director nor officer of Adia Nutrition. My role is exclusively Homeland Forensics, Inc. and the spin-outs that Adia Nutrition agreed to facilitate as part of the long-term turnaround plan for the company. Changing the corporate name to 3Me, Inc. and then later changing the name to Adia Nutrition was the strategy that the new management team decided upon in 2011.
The debt of Adia Nutrition, Inc. will remain with Adia Nutrition when the spin-out of Homeland Forensics, Inc. is concluded. However, there is room for business judgment on this point especially in the case of the two or three long-term creditors who hold debts that are secured by the intellectual property of the PivX Solutions software product, PreEmpt. It makes sense for those secured debts to follow the PIVX legacy intellectual property when a new venture is formed to attempt to commercialize it in the future.
You will need to direct any accounting questions, such as whether the company intends to remove old debts from its books at some point, to Wen Peng. It is my understanding that the debts continue to exist unless the creditor issues a 1099, and in that case presumably the IRS would deem Adia Nutrition to have taxable income equal to the amount of the write-off. See:
http://www.nolo.com/legal-encyclopedia/tax-consequences-settled-forgiven-debt-29792.html
Thanks for the question, and I hope the Admins at IHub don't object to hosting actual discussions on this discussion board. I am happy to answer questions by email as well. I've done my best to stay in contact with as many of the PIVX investors (and creditors) as possible over the years.
Sincerely,
Jason Coombs
jcoombs@homelandforensics.com
Adia Nutrition will be concluding the spin-out of its computer industry legacy assets including by launching Homeland Forensics, Inc. as was previously announced. When this spin-out occurs, I will be the CEO and Chairman of Homeland Forensics, Inc. and will remain an investor in ADIA.
As the former CEO and Chairman of PivX Solutions, Inc. (the former name of Adia Nutrition, Inc.) it would be helpful for me to moderate this board. All of the shareholders of ADIA will also become shareholders of Homeland Forensics, Inc. in the future.
I am the author of "Setting Up An Internet Site For Dummies" and other computer books, a past columnist for BYTE.COM, Dr. Dobbs Journal, Microsoft Interactive Developer, and contributor to many technical publications in the computer industry.
The work being done to finish the turnaround of PivX Solutions, Inc. including all of the good progress that Adia Nutrition has made since last year deserves more diligent attention on this Investors Hub discussion board.
After the spin-out is complete, my intent is to continue to advocate for ADIA and to promote its interests.
Regards,
Jason Coombs
jcoombs@pivx.com
jcoombs@homelandforensics.com
Technical analysis of the stock chart suggests we have long-term support.
Notice that both the 50- and 200-day moving averages are rising in a steady uptrend at a value that is above the current price. Unless the next long-term price movement is down the technical interpretation is that new value is being created.
I think that's the primary reason that the number of investors following the company has been rising. It will be interesting to see whether conventional financial market technical analysis proves itself to be of value for picking good investments in micro cap companies.
The 50-week moving average is also clearly up trending and the weekly chart really shows how much time and effort is required to successfully turn around a long-term downtrend, you can see the new growth curve starting as the old downward spiral finally came to an end. Fascinating. I will be using this as a textbook turnaround case study in my future work, assuming that 3Me Inc becomes what I believe it can become.
Regards,
Jason Coombs
Homeland Forensics will grow when it has capital. Each of the 3Me / PIVX shareholders will receive shares of Homeland Forensics in the spin-out stock dividend, so at this point the future potential of this spin-out is a relevant consideration when examining the prospects for 3Me. Assuming that capital becomes available for Homeland Forensics in the future my personal contribution to 3Me Inc will be substantial, but at this moment as the Adia probiotics business launches and 3Me focuses on its business development there isn't much that I can do to help. Wen has her own team that is executing her plan, including the spin-out of Homeland Forensics, and I see nothing wrong with slow deliberate steps forward.
It would make no sense to demand that the company spend money doing things in a non-economic sequence just to create the appearance of more exciting activity. PivX Solutions previously misspent millions by trying to create a good story instead of trying to create a good business. Now we're creating a good business first and the story will take care of itself. The fact that Wen and her team are not easily manipulated by a few loud voices and false promises from shady financial backers like the ones who previously helped the company misspend millions of dollars of investor capital represents material forward progress.
As investors you should be focused on making sure that the company has the right sources of capital, constructive and reliable sources of capital, and verifying that the business is being operated in a profitable manner. Wen is not wasting nor misspending resources, which is a fundamental divergence from the PivX legacy.
Regards,
Jason Coombs
JCoombs@HomelandForensics.com
The SEC explicitly warns investors about investing in companies that went public by way of a reverse merger.
In my opinion the extreme disagreement about the future value of PIVX / 3Me Inc and Homeland Forensics Inc is a result of certain market makers and naked short-sellers who are following what they believe is correct fundamental analysis guided by SEC advisories and past enforcement actions. See:
http://sec.gov/investor/alerts/reversemergers.pdf
As the company executes the turnaround plan that I helped to design, we should see a dramatic improvement in the quality and quantity of financial disclosures and at least quarterly reports providing management discussion and analysis of operating results. This is the basis of establishing and maintaining transparency and an adequately-informed market perception of financial value for the PIVX shares. Prior to implementing the turnaround plan it was simply not possible for the company to achieve these management objectives, but it would be a mistake for anyone to believe that the barriers and limitations of the past will continue to impair the company's efforts going forward.
The event of reverse merger from the company's past is now completely irrelevant. The only thing that matters now is operating profitably by creating something of value for customers and taking care of normal corporate administrative obligations without losing money by doing so. Considering the extreme difficulty and hardship that the company experienced from 2005 to 2010 it would be ridiculous for shareholders today to be unwilling to be patient as the company moves forward in economic time. I can't believe that any long-term shareholder would give up at this point, so it is obvious that the persistent selling pressure is not the result of legitimate shareholders exiting their positions. The more that 3Me Inc performs and achieves transparency the less tolerable it will be for market traders to manipulate the price or interfere with market makers who work hard and risk their own capital to ensure that investors are able to accurately perceive the true supply and demand for the company's shares.
When 3Me Inc achieves its growth objectives it will be possible to re-register with the SEC and qualify for a proper stock exchange listing. It would be a huge disappointment, from my perspective, if the company were to remain Over-The-Counter traded rather than becoming exchange-listed after it re-registers. The highest standards of disclosure and transparency are found within exchange-listed companies, so that's where both 3Me Inc and Homeland Forensics Inc belong as soon as financial resources and circumstances permit.
Sincerely,
Jason Coombs
PIVX / 3Me will be exchange-traded in the future, yes.
You may be aware that the OTCBB is not a stock exchange, it is an over-the-counter quotation service just like the Pink Sheets. There is no benefit to being quoted on the OTCBB instead of the Pink Sheets.
When the company is traded on a real stock exchange that is when it makes sense to re-register with the SEC to become 1934 Exchange Act-regulated again. Meeting exchange listing requirements is not difficult, the only barrier that will exist after the financial statements are filed with Edgar is that the minimum bid for the company's free-trading stock must stay above the threshold for listing. That doesn't require the phantom naked-short-seller to cooperate, it merely requires successfully raising new capital around a fundamentally-profitable business.
Regards,
Jason Coombs
In my opinion, based on my own private forensic investigation, the short-seller thinks that PIVX is some kind of a reverse merger fraud, similar to the ones that the SEC has recently been suspending from trading. That is the only rational reason for the short-seller's continued actions to keep shorting PIVX. My research points in a particular direction, to a specific short-selling hedge fund as the most likely source of the short sales.
In this case their research is flawed. Although PIVX did conduct a reverse merger in 2004, I have verified every relevant forensic and legal detail of the company's past and there is absolutely no reason for any SEC action against PIVX relating to anything historical. When it became apparent that the company would not be financially capable of becoming fully-compliant with it's 1934 Exchange Act reporting requirements (because it could not prepare and file an audited 10-K report for 2005) the correct decision was to file Form 15 to deregister the Common Stock. This was done in 2008, long before any possible SEC enforcement action would have been initiated for the company's failure to file that delinquent 10-K report. The company is no longer obligated to file reports with the SEC, but it is allowed to do so voluntarily.
The spin-out strategy for turning the company's most promising lines of business into stand-alone companies, starting with the legacy forensics and security business, resolves the barrier to capital formation because it enables every single good idea that any member of the 3Me team develops to the spin-out stage to be capitalized separately without diluting the PIVX shareholders. Every new spin-out adds long-term value to 3Me Inc and dividends a new shareholding directly to 3Me shareholders, without requiring any new equity sale or new capital investment on the part of the parent company. This is a very powerful mechanism for creating new value and capturing it in the form of the company's shares, and it is one more thing that the PIVX short-seller is miscalculating.
Sincerely,
Jason Coombs
Strategy for growth of computer forensics is an excellent question.
You are correct that the business potential of computer forensics is enormous. In my Letter to Stakeholders previously the business model of a publicly-traded law firm was explored in some detail. There is good reason to believe that Homeland Forensics Inc would become very important in the future in countless legal matters just by employing a large number of the best computer forensics professionals in a 'partner' capacity similar to the structure of a law firm and devoting the company entirely to the needs of clients who have urgent legal problems requiring complex computer investigations. Owners of publicly-traded unrestricted shares of the company's stock would participate as limited partners, in effect, with dividends being the mechanism by which both forensics partners and limited partners receive net profits from the casework undertaken for clients.
This professional services business model is not possible within the PivX parent company today because the capital structure and debt load of the legacy company are designed for a product-based business, not a services-based one. This is a core reason for the spin-out of Homeland Forensics Inc by way of the soon-to-be-declared stock dividend. The business of 3Me Inc is product sales, in keeping with the requirements and the limitations imposed by the present financial condition and capital structure of the company.
There was no point in raising new capital just to help assemble a team of legal services professionals and forensics experts around the Homeland Forensics business name. To justify raising new capital required a product-based business strategy, which 3Me now has, and the spin-out enables the formation of the forensic services law firm business model in addition to setting the stage for low-cost further spin-outs of new technology companies from Homeland Forensics Inc.
With zero debt and initial seed capital provided by the parent company, the Homeland Forensics team will no longer have any barriers to attracting and keeping top forensics talent. We had limited potential to do this before because forensics professionals are not interested in joining a company that has significant legacy debts when there is almost no capital overhead required for the professional services business model of a law firm.
My expectation is that the debt-free Homeland Forensics spin-out will be able to realize the objective of assembling a world-class team of experts who are dedicated to providing litigation support and computer investigative services as one of the facets of the long-term growth business. Our expertise from working in this field positions us to consistently innovate in many areas of technology and to identity very important emerging business needs that should become the focus of additional spin-out companies in the future.
A law firm usually does not apply for patents, develop software and Internet services, launch new hi-tech startup companies, and pioneer new consumer-, corporate-, military-, and government-oriented businesses but there is no reason for a forensics company not to do these things because we do not occupy a position as legal counsel to our professional services clients. Therefore, the conventional law firm partnership business model only provides a reference point for thinking about the guaranteed future profit- and growth-potential of Homeland Forensics. With proper risk management and this spin-out business strategy for all non-core inventions or new business ideas, so that new capital can be raised for each new business venture as-needed without diluting any of the existing owners of Homeland Forensics Inc, not even future business failures within the additional spin-outs of Homeland Forensics will jeopardize the viability and growth potential of the core forensics business. Protecting that business and the people who invest their assets and their careers in it is the most important strategic imperative from which countless new opportunities will emerge.
The exciting consumer product-oriented business of 3Me Inc will, meanwhile, provide Homeland Forensics with a core investment asset that is expected to become a future source of capital for funding these spin-outs and attracting top forensics talent. As such from my perspective what we have designed and are presently launching is a 'reverse spin-out' of the core innovative engine of the company. The 3Me business and new operating divisions such as Adia Nutrition will retain an ownership stake in the innovation engine that it is spinning out, but in actual fact the 3Me business is going to become a productive asset for the shareholders of the spin-out first, while we continue to lay the intellectual property and business foundation required plus design and launch the forensics product spin-outs, individually capitalizing each one separately in non-dilutive share issuances and stock dividends.
This is the strategy that ensures success before the first move is made, and I believe it is profoundly innovative that this has been achieved under the adverse business conditions that existed at PivX Solutions as of June 2006 when I agreed to become CEO and chief architect of this turnaround plan. People have been saying for several years that they have never seen anything like this before and that it will become the model case study of the correct way in which to turn around and recapitalize an insolvent tech company while avoiding dilution or other negative impact on the company's shareholders. Books and magazine articles and a television documentary are distinct possibilities, just to tell this remarkable business turnaround story in its full and fascinating detail and to share the strategic business ideas with others who could benefit from them. A patent application for some of these innovative ideas is also being worked on presently, following in the footsteps of the many world-class accounting and financial services firms who have successfully patented novel systems and methods of value to their clients who seek tax reduction mechanisms or new and better ways to execute their proprietary business strategies within complex regulatory environments and global financial markets.
Sincerely,
Jason Coombs
JCoombs@HomelandForensics.com
Markets are inefficient. Because of this phenomenon it is routinely possible to buy assets for far less than they are actually worth. Last year I personally won a global financial market trading competition, producing greater than 2,000% profit in four months in my personal live trading account. That is one of the primary reasons that I was able to move the time table of the PivX turnaround and recapitalization effort forward this year.
If markets were truly 'efficient' then such large profits would be impossible. The consequences of an 'efficient market' would be that wealth creation would occur by way of a few simple processes which would be accessible only to the ultra-rich and those who hold political control over economies.
I'm personally glad that markets are not efficient because I prefer a world in which wealth can be created by the most skilled and most dedicated competitor in any field.
Sincerely,
Jason Coombs
JCoombs@HomelandForensics.com
RNCH is bigger than Tydus Richards & James King.
I know Tydus Richards very well and he's a real person who brings real value and real expertise to corporate finance.
RNCH just needs to extract oil and gas from its properties at a reasonable overhead cost in order to be an excellent company.
Execution is the key. You can joke about your past investment mistakes, or you can go to work yourself to help RNCH execute its business plan.
Maybe they'll hire you if you stop flipping shares for a living.
Sincerely,
Jason Coombs