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

[DERBENSKI]

The Saga Continues....

We left off the story where Steve Peacock and Shane Traveller acquired a 63.2% controlling vote interest in the company through the sale of super voting rights Series B preferred shares for 5K.

But now what? Well, it is now time to reverse the stock! How do you protect your 5K investment? It was also time to turn the company into a "closed end" Business Development Company.

Here are the danger signals....

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

A special meeting of shareholders of Nicholas Investment Company, Inc. was held on November 10, 2003 where the following actions were taken by a majority vote of shareholders:

1. The Company's Articles of Incorporation were amended:

a. To effect a one-for-200 reverse stock split of the Company's common stock (the "Common Stock") by reducing the number of issued and outstanding shares of Common Stock from 165,373,752 to approximately 826,866 (the "Reverse Split"); and

b. To authorize 550 million shares of capital stock of the Company, of which 500 million shares relate to Common Stock and 50 million shares relate to preferred stock, subject to further designation by the Board of Directors of the Company; and

c. To permit action upon the written consent of less than all shareholders of the Company, pursuant to the Nevada Revised Statute.

2. Messer's. Peacock and Traveller were elected members of the Board of Directors.

3. HJ Associates & Consultants, LLP were approved as the Company's independent auditors for the coming year.

4. The Company's sale of common stock at prices below net asset value per share was approved.

http://www.secinfo.com/d16gRg.1d.htm

We now have the situation that once voting control was captured through the issuance of super voting rights, that the above amendments to the articles of incorporation were rammed through.

Now about that 5k investment also from the same filing ....

"On November 14, 2003, the Board of Directors created and approved a new series of preferred stock, Series C Preferred, which consists of 12 million shares. The Series C Preferred Stock does not earn interest, is not entitled to receive dividends and does not have voting privileges. The Series C is convertible into shares of common stock on a 1:1 basis at the election of the holder or, in the event of liquidation of the Company, it converts automatically. The Series C Preferred, while not voting stock, is entitled to name two directors to the Board of Directors. On November 10, 2003, the Company issued 8,450,000 shares of Series C Convertible Preferred Stock to Mr. Traveller in exchange for all of the outstanding shares of Series B Preferred Stock. The Series B preferred stock was subsequently cancelled by vote of the Board of Directors."


Now some of you wise crackers might look at this and say how is it possible to issue Series C shares on November 10th, when the shares were not created and approved until November 14? Have you ever thought about something and thought you did it even though you didn't? Maybe this was one of those situations or maybe there was a holiday in there somewhere......

Anyway, this type of Preferred share was to become a signature of Javelin. These shares were not affected by a reverse split. The holders of these shares were protected from dilution.....

Derb