Scam Plays and DTC "Chilled" Stocks - Beware of Both

[DERBENSKI]

How to fund your company Javelin style.

Gain control of a company

1. Create an amendment to the articles of the corportation authorizing a class of preferred stock.

2. Designate super voting rights to those preferred shares at 100 votes per share.

3. Sell 2,000,000 shares of preferred stock to your buddies for 5k.

4. Your buddies sell the shares back to your private company (Peak Solutions owned by Steve Peacock and Shane Traveller who are both directors and officers of the public company).

5. Get the public company to buy your private company for 200,000 shares, 250k and a line of working capital of 500k, all through sales of stock from the company that you are an officer and director of.

Item 1. Change in Control of Registrant

On June 3, 2003, Nicholas Investment Company, Inc. (the "Registrant") filed an Amendment with the Nevada Secretary of State, designating 2,000,000 shares of Preferred Series B stock. On June 4, 2003, 2,000,000 shares of Preferred Series B stock was issued to MRG California, LLC. ("MRG"), pursuant to a Resolution of the Board of Directors dated June 3, 2003. MRG paid $5,000 in consideration of such stock issuance, paid from cash on hand. The owner of each one (1) share of Preferred Series B stock is entitled to one hundred (100) votes for any matter presented to the shareholders of the corporation at any regular or special meeting of the shareholders, or for any matter that may require approval of the shareholders of the corporation. With the issuance of the stock to MRG, it represented 63.2% of the voting stock of the Registrant.

On September 17, 2003, MRG sold all of its interest in the Preferred Series B stock to Peak Solutions ("Peak") a private partnership. As a result of this sale and transfer of Series B Preferred Stock, Peak now represents 63.2% of the voting stock of the Registrant.

Peak is a private partnership, formed on January 6, 2003, with a principal place of business at 4443 Birdie Dr., Corona, Ca 92883. The partners in Peak are Steven Peacock and Shane Traveller, both of whom serve as directors and officers of Registrant.

http://www.secinfo.com/d16gRg.2c.htm

Item 2. Acquisition or Disposition of Assets

On November 18, 2003, the Company acquired 100% of the issued and outstanding capital stock of Javelin Holdings, Inc., a California corporation in exchange for 200,000 shares of Nicholas Investment Company, Inc. common stock, a note payable to Javelin Holdings for $250,000, and a commitment to provide a working capital line of credit for the benefit of Javelin Holdings in the amount of $500,000. The funds associated with this acquisition are expected to be obtained through the sale and issuance of common stock of Nicholas Investment Company. Prior to this acquisition, Javelin Holdings, Inc. was 100% owned by the Chief Financial Officer of Nicholas Investment Company. The acquisition was approved by a unanimous vote of the Company's independent directors. Other than the receipt of the 200,000 shares of common stock, Mr. Traveller did not receive any other benefit from the transaction. Mr. Traveller is expected to remain the President of Javelin Holdings.

Javelin Holdings, Inc. was incorporated on December 31, 2002 for use as a shell corporation. In June 2003, Javelin acquired a 100% interest in Peak Solutions in exchange for 100% of Javelin's then-outstanding common stock. This transaction was accounted for as a reverse merger since the management of Peak Solutions became the new management of Javelin. Accordingly, the historical activity of Javelin described herein refers to the activity of Peak Solutions.

Located in Temecula, California, Javelin is a private investment, management and consulting company. Historically, Javelin has generated income from consulting services with expertise is working with micro-cap and small-cap companies across various industries in "turn around" scenarios. In this capacity, Javelin has extensive experience in fund-raising, operations, and management. To a limited extent, Javelin has provided some direct investment into client companies. The Company anticipates increasing its level of direct investment participation in companies that have strong management and fundamentals.

Going forward, Javelin is expanding its operations to include the acquisition of publicly-traded, but inactive, shell companies, infusing them with capital, and then managing the new companies as they acquire and operate subsidiaries.

Javelin Holdings fills the current void in financing for small, developing companies. Operating as a hybrid between a management group, a consultant firm, and a holding company, Javelin expects to generate revenues from multiple sources.


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Revenues

Javelin's business model generates revenues by both assisting client companies in raising capital, and acquiring and operating businesses ourselves. Specifically, Javelin anticipates engaging in the following activities:


1. Locating and acquiring inactive public companies (shells).
2. Bringing the shells into compliance with the provisions of the 1933 and 1934 Act and then infusing them with capital.
3. Using the capital in the companies to invest in operating businesses.
4. Assisting with the management of the operating companies.
5. Consulting with publicly-traded clients to assist them with raising money.
6. Making limited, short-term investments into client companies in the form of convertible debentures.
7. Assisting client companies to create liquidity in their stocks through PR, strategic acquisitions, etc.
8. Financing client companies through private placements and other stock sales.


In light of all of the above list activities, Javelin expects to generate revenues from several areas:


Consulting Fees. Javelin has heretofore generated fees from consulting to various micro-cap and small-cap public companies. Typically trading on either the OTC.BB or "pink sheets," these companies can often benefit from several services offered by Javelin including
assistance with capital raising
merger/acquisition structure and negotiation
improving stock liquidity, market development
conversion into business development company
quarterly and annual report preparation/SEC compliance
audit committee and board of director services

In each instance above, Javelin charges consulting fees ranging from hourly billing to flat monthly fees payable in either cash or free-trading stock.


Purchase of convertible debentures. Convertible debentures, while devastating to a company in large amounts or when used as long-term financing, can be used effectively and without harm in limited quantities and for relatively short-term cash needs. A convertible debenture is a debt instrument that allows the holder to convert their debt position into common stock at some pre-determined discount to market. Because the conversion rate is fixed rather than the conversion price, convertible debentures can have the effect of spiraling down a stock price through wanton conversion by the holders. Javelin will buy debentures from select clients in instances where there is limited other convertible debt on the client's books and where the client has entered into management contract with Javelin.
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Purchase of Stock. Once a public company has been "cleaned" (is fully compliant and has a favorable equity structure), and is in a position to issue stock, Javelin proposes being a primary source of this investment capital for our clients by purchasing common stock from them at a discount to market and then selling the stock at market rates.

Management Fees

In select instances, Javelin will acquire a controlling interest in a public shell with the intention of cleaning them up and preparing them to receive a capital infusion. Javelin intends to charge such companies management fees as compensation for our efforts to clean up the shell, provide financing, and provide ongoing management support. Our intention is to centralize all management and overhead of all subsidiary companies in order to reduce costs and better control operations.

http://www.secinfo.com/d16gRg.2p.htm

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