Rim Semiconductor Company (fka RSMI)

[mayu]

http://www.smartmoney.com/onthestreet/index.cfm?story=20031131&pgnum=2

I think you need to reread this article Elder,


On the Street
What in the Name of God?

By Scott Patterson
December 10, 2003
Downloads


· "Christian Investing" Special Report
· Alpha Analytics Research Report
Stock-Watching Tools

· Map of the Market
An interactive view of 600 stocks.
· Your Portfolio
Track up to 500 stocks in 10 portfolios.
· Tear-Off Watchlist
Track your stocks wherever you go on the Net.
· Daily Briefing
Hot stocks, earnings, analyst ratings and economic reports.
· Breaking News
In-depth stories on today's top business news.
· Updated Market Overview

User Options

· View Archive
· Send Us Your Comments
· Email This Story
· Print This Story
· Save This
Advertisement
Smith Barney


· In-depth market analysis
Today on SmartMoney


Tradecraft
· My Holiday Wish List
Say What?
· Leap of Faith
Stock Screen
· Some Insiders Are Buying Big
Consumer Action
· Talk Is Cheaper
One-Day Wonder
· If You Can't Beat 'Em, Buy 'Em


(Page 2 of 2)

Kingdom spokesman Lambert admits that the company seems to have been involved in some shady behavior. He places the blame squarely on Resource Capital Management, which was responsible for arranging a number of Kingdom's business deals earlier this year, including the one with YourNetPlus.com.
"Resource took them down a primrose path that turned out to be horrible for the long-term value of the stock," says Lambert.

RCM concocted the YourNetPlus.com agreement, he says, to "improve [Kingdom's] balance sheet to get them closer to a Nasdaq listing." Lambert characterizes the deal as "a shell game that Kingdom Ventures found out about after the fact."

In fact, Lambert says RCM was probably behind the stock-gaming activity the SEC is investigating. When asked whether he thinks RCM, or people associated with it, had a connection to the bogus Undervalued Quarterly ad, he says, "Not a doubt in my mind. There was clearly gaming going on in the stock, and that's the basis for the SEC investigation."

There were a number of huge leaps in the trading volume of Kingdom's stock earlier this year. On April 29, volume jumped more than 200% to 1.2 million shares from 393,100 the day before. Then, on May 27 — the same day Kingdom announced its deal with YourNetPlus.com — volume went into overdrive, trading at one million shares, 1.1 million, 3.8 million, and one million shares in four consecutive days as the share price fluctuated 38% between 80 cents and 58 cents. In mid-June, volume again leapt to the million-share range for several days in a row. Its average volume is about 114,000 shares, according to Reuters.

RCM held a sizable position in Kingdom Ventures at the time. On Feb. 2, 2003, Kingdom filed a Form S8 with the SEC providing for the issuance of warrants to purchase 7.85 million shares of its stock to RCM as compensation for services. Converting those warrants — five million of which were convertible at one cent per share — later "contributed $942,217 to [Kingdom Ventures'] operating expenses during the three months ended July 31, 2003," according to the company's second-quarter 10Q.

A spokesman for RCM who asked not to be identified flatly denies Lambert's accusations and any connection to the bogus Undervalued Quarterly ad. "It sounds like they have some problems, and they're trying to throw them at us," says the spokesman. He says RCM hasn't heard from the SEC.

But despite RCM's denials, there does appear to be a direct link between the Undervalued Quarterly ad and RCM. The ad appeared in the May 2003 issue of Charisma magazine, published by Strang Communications, a Lake Mary, Fla., Christian multimedia company. An ad-sales representative for Charisma said a company named Beuphoria placed the insert. The CEO of Beuphoria, said the representative, was listed as Peter Luhanto, and its marketing director was listed as Alvie Merrill. Beuphoria doesn't exist anymore; it was dissolved on Sept. 10, according to the office of the Secretary of State of Nevada. Merrill, who lives in Lake Jackson, Texas — the city listed as the mailing address for Undervalued Quarterly — denies having any roll in placing the Undervalued Quarterly ad.

Merrill also denies having any connection RCM. Jackson, however, says RCM referred Merrill's company, Merrill Zurich, to Kingdom Ventures to produce Kingdom's press releases. "Merrill Zurich was referred to us by RCM, and they were chosen as the press agent for Kingdom Ventures," says Jackson.

Merrill says he has no business relationship with Luhanto. But recently the two served as executives of a public company based in Las Vegas. A search of Nevada's corporate records shows that Merrill was chief executive of American Market Support Network, which was sold earlier this year and renamed Arizona Aircraft Spares (AZAAE.OB). On the OTCBB Web site, Merrill is listed as chief executive of AMSN. Luhanto, who couldn't be reached for comment and is thought by at least one source to be in Europe, is listed as its secretary.

Steven Brock, owner of GoPublicToday.com, an investment adviser based in Las Vegas that helped take American Market Support Network public, says he's shocked by the Undervalued Quarterly ad, which he hadn't seen until contacted by SmartMoney.com. "It's just mind-blowing to see [Luhanto] take a position like this," he says. "You're bringing something to my attention that is just shocking to me." Brock says he hasn't seen Luhanto or Merrill in nearly a year.

Amazing Disgrace
Who besides Resource Capital Management engaged in speculative trading of Kingdom Ventures' stock? One candidate is J&J Holdings, the majority shareholder in the company. The president of J&J is John Jackson, the brother of Kingdom's CEO, Gene Jackson, and pastor of the Carson Valley Christian Center in Minden, Nev.
According to SEC filings, on March 25, J&J Holdings donated 500,000 shares of Kingdom stock, then trading at 49 cents a share, to Carson Valley Christian Center, which later sold it. Then, on April 21, after Kingdom's stock had run up more than 80% to 90 cents a share, J&J donated 300,000 KDMV shares worth $270,000 to Pastor Jackson's church.

Gary Loomis, a former member of CVCC and investor in Kingdom Ventures, says John Jackson was well aware of RCM's plans to inflate the price of the company's stock with an aggressive investor-relations campaign.

"Before all this began, I told John that this [deal with RCM] has all the hallmarks of a classic offshore pump and dump," says Loomis, who was formerly the emergency operation center team leader for the City of Los Angeles and is now retired. "He wanted to discuss the definition of a pump and dump. He drew a bell-shaped curve and drew a straight line across the bottom of both sides and said, 'If the stock price starts off here and end up here, that's a pump and dump. But if it ends up slightly higher, then that's different.' I just kind of laughed and said, 'John, [Jackson] what happens to all the investors that buy at much higher prices and lose most of their investment when the stock goes down.' And he had no answer."

John Jackson said in an email message that this conversation never took place, and characterized Loomis's insinuations as "laughable."



A Messy World
Intriguing though these connections may be, it will probably take an SEC probe into the activities of Kingdom Ventures and RCM to uncover the truth. Whatever the outcome, Kingdom's management must bear some responsibility for the suspect deals and announcements the company issued throughout the year. Jackson is quoted frequently in the company's press releases, and his name is on each SEC filing.

And while Jackson avows that the company is finished with misleading press releases, a recent imbroglio suggests it still has a tendency to exaggerate the nature of its financial dealings. On Oct. 14, Kingdom announced it had acquired the remaining assets of Christian Times, which had carried the Undervalued Quarterly ad insert that had so disturbed Pastor Walker. "Kingdom Ventures today announced that it has acquired the remaining assets of Christian Times from Keener Communications Group," the company stated in a press release.

Lamar Keener, president of Keener Communications, says that's a lie. "They purchased the name Christian Times," Keener says. "Not the assets. Any claim otherwise is simply not true, and they know it is not true."

When we first questioned Jackson about the deal, he stood by the company's claim that it had purchased the Christian Times assets from Keener Communications. "The reality is that we've claimed very clearly that we bought the remaining assets of the Christian Times" from Keener, the CEO said in an interview. But on Nov. 17, Kingdom issued a press release admitting that it "did not acquire the publishing assets of Keener Communications."

Perhaps the most outlandish episode in the Kingdom Ventures saga is the extraordinary claim by a former Kingdom Ventures executive vice president that the company stole from his credit card. John Howell, who left Kingdom in February, says Jackson requested the use of his American Express credit card to pay company expenses amounting to about $12,000. When he got his bill, he saw that Jackson had charged more than $60,000 to the card. Jackson admits having used Howell's credit card but says Howell himself had made the offer. Howell, now president of California health-food company NutraCea (NTRZ), says he plans to settle the matter with Kingdom Ventures in court in the near future.

Jackson, meanwhile, says he's shaken by the scams he claims others have perpetrated at the expense of his company. "We've been frustrated with the sewer of the OTC," says the CEO from his Nevada home after a cross-country business trip. "It's a messy world to live in, to say the least. If I had it to do over again, I certainly wouldn't have chosen to go this route."

Where will the company go from here? "We have to clean up the image of what Kingdom Ventures is all about," he says. "We just have to stay focused on the business aspect of who we are."

That may prove difficult, however. As of press time, Kingdom's biggest deal yet, the acquisition of Forest, Va.-based American Association of Christian Counselors, which was supposed to add $10 million in annual revenues, seemed to be unraveling. While Jackson declined to confirm that there were any problems with the pact, a mediation hearing between Kingdom and the president of the AACC, Tim Clinton, is scheduled for Dec. 15 in the U.S. District Court in the Western District of Virginia, according to the court's Web site.

Lord, have mercy.