I guess I am mental and so are the people at Dow Jones. Here is the latest from Dow Jones columnist Carol Redmond. Released today at 12:00. Read it and weep Gateway. Your a dope.
21 Mar 2006 12:02 ET =DJ IN THE MONEY:Hybrid Shoots For Moon,SEC Asks Questions
By Carol S. Remond
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--Hybrid Technologies Inc.'s inflated press releases are finally catching up with the company.
Hybrid (HYBT) said in its latest quarterly report filed last week that the Securities and Exchange Commission started an informal inquiry into the company's press releases and communications with companies named in these releases. Hybrid's sister company Zingo Inc. (ZNGO) also got questions from securities regulators in early February according to Hybrid's SEC filing.
Hybrid's stock dipped as news of the SEC probe made its way through the market Monday. The stock is rebounding Tuesday and was recently trading at $10.45 a share, up 10 cents.
As reported in two previous "In The Money" columns, Hybrid, on at least three occasions, issued misleading press releases that were disputed by some of the companies or people mentioned in them.
Apparently unmoved by the SEC's scrutiny, Hybrid last week announced that NASA has agreed to test three of its battery-powered cars at the Kennedy Space Center. That's no small feat for a company with no revenues and one that recently defaulted on more than $3 million in debt.
In a March 13 press release, Hybrid announced its space act agreement with NASA.
NASA transportation officials confirmed to Dow Jones Newswires that the agency has agreed to test three Hybrid vehicles retrofitted with lithium batteries at the Kennedy center. NASA said the move was prompted by U.S. government's interest in alternative fuel. NASA said it didn't authorize the March 13 press release. The same press release was reissued by Hybrid on March 15. It's unclear whether that announcement was approved by NASA.
Endorsement Publicity Challenged
NASA said it was first approached by Hybrid 10 to 12 months ago. A NASA official said they had not seen or tested Hybrid's vehicles before agreeing to the deal but that the company provided the government agency with brochures and testimonials from people using them.
NASA "looked at their documentation. They have testimonials from various folks that are driving them," said Wayne Gookin who was NASA's logistic transportation manager when Hybrid first contacted the space agency.
Pressed for specifics, Gookin said: "They have Jay Leno."
Here's the rub though - "they" don't have Jay Leno.
The Tonight Show host told Dow Jones last November that his attorney had asked Hybrid to stop using his name. Leno said he never got a car from Hybrid, as the company claimed in a press release last April. "I'm not connected to it and have no interest in it," Leno said in a telephone interview. "I'm a car guy. I get calls and I look at things. That's it," Leno said.
Leno isn't the only one objecting to Hybrid's press releases.
Volkswagen AG and Frito-Lay, two companies mentioned in Hybrid press releases over the last few months also questioned the accuracy of those releases.
After Hybrid announced an "historical partnership" with Volkswagen last November, a VW spokesman said the press release, which wasn't approved by VW, "overstated things". The release disappeared from Hybrid's Website after VW asked that it be pulled.
Meanwhile Frito-Lay Inc., the snack food unit of PepsiCo Inc. (PEP) told Dow Jones that it terminated discussions to purchase two to four vehicles from Hybrid after that company hyped the deal in an unauthorized press release on Dec. 5.
A Frito-Lay spokesman said the company had told Hybrid not to issue the press release before it was disseminated by several corporate services. "Under no circumstances would a press release like (the one issued by Hybrid) have been authorized or even considered," the Frito-Lay spokesman said.
Scott Meehan, a lawyer for Hybrid, didn't reply to questions faxed to him.
Hybrid Defaulted On $3M Loan
Exaggerated press releases aside, there are plenty of other reasons for investors to question the prospects of Hybrid. According to its latest quarterly report, Hybrid had a net loss of $8.5 million for the six months period that ended Jan. 31. Losses since inception in 2000 reached a whopping $30.1 million by the end of January. According to the consolidated balance sheet included in Hybrid's most recent SEC filing, the company had $51,702 in cash as of Jan. 31. But later in the filing, the company said it had $4.3 million of cash on hand as of March 16. The company doesn't explain in the filing how it dramatically improved its cash position from Jan. 31 to March 16.
The company has about $5.3 million in liabilities and has fallen behind on some of its obligations. Hybrid said on Feb. 24 that it defaulted on a $3 million loan from Sterling Capital Inc. A Vancouver lawyer representing Sterling declined to identify the controlling person(s) behind Sterling. The lawyer, Gregory Yanke, said that, as far as he knows, Sterling hasn't declared Hybrid in default and that therefore 9 million shares of Hybrid used as collateral for the loan are still sitting in escrow.
According to SEC filings, Salim S. Rana Investments Corp., a private Nevada company controlled by Salim Rana, was Hybrid Technologies' second largest shareholder after Sterling, as of March 9 with 20% of its shares, down from 80% in 2002. Hybrid is the controlling shareholder of another struggling small-cap company called Zingo. The two companies share some of the same executives, including Holly Roseberry who acts as chief executive officer for Zingo and president and CEO for Hybrid. Roseberry appears to have limited experience running publicly traded companies, having managed a dry cleaning laundromat in Las Vegas from 2001 to 2003.
(Carol S. Remond is an award-winning columnist and one of four who write the "In The Money" feature. Most recently, she won a 2005 Gerald Loeb Award for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks.)
-By Carol S. Remond; Dow Jones Newswires; 201 938 2074; carol.remond@dowjones.com
(END) Dow Jones Newswires
March 21, 2006 12:02 ET (17:02 GMT)
Copyright (c) 2006 Dow Jones & Company, Inc.
Hybrid Tech Discloses Informal SEC Inquiry
DOW JONES NEWSWIRES
March 17, 2006 6:52 p.m.
WASHINGTON -- Hybrid Technologies Inc. (HYBT) disclosed Friday in its 2005 annual report that the company and a subsidiary are the subject of an informal inquiry by the Securities and Exchange Commission regarding press releases the company issued within the past year.
Hybrid Tech said the company and its Zingo Inc. unit are cooperating with the SEC's request for documents and information related to the press releases, communications with companies named in the press releases and bank and brokerage account records.
No further details about the inquiry were provided in the report filed with SEC.
Hybrid Technologies, based in Las Vegas, is a development-stage company focused on converting products such as land vehicles, watercraft and lawn and garden equipment to lithium power.
-By Ed Welsch, Dow Jones Newswires; 202-862-1356; edward.welsch@dowjones.com
