Another in a long line of obvious shells
David Baines, Vancouver Sun
Published: Thursday, May 15, 2008
One of the seed shareholders, Phil Tapley, told me he sold his shares "to a person who came along." He said he didn't know the person and couldn't recall his name, but he remembers that he made a small profit.
Another shareholder, Matt Wubs, said Sharpe "suggested this fellow would be willing to take the shares off my hands for what I paid for them." He also said he didn't know this person, but he made a small profit.
Trevor Kojima also sold his shares, but couldn't recall the circumstances. "I guess I was told what to do," he said. He also made a small profit.
Kelly Uniewski couldn't recall much about the shares she bought. "I think I did sell them. I can't recall the circumstances. You can see I'm not well-versed in this."
As vague as these accounts are, they follow a very familiar pattern. Seed shares are doled out to compliant people who are quite willing to relinquish them at a later date for a small profit. In most cases, the shares are acquired by the promoters, giving them a lock on the stock. At that point, the promotion is shifted into high gear.
In March this year, Sharpe announced that Deeas would acquire Global Trek Xploration, a California company that is developing miniaturized GPS tracking technology that can be used in running shoes.
To pay for Global Trek, Deeas would issue 18 million shares to the shareholders of Global Trek, which would give them control of the company.
Sharpe agreed to cancel his 1.5 million shares for $120,000 cash, which after subtracting the cost of his shares, netted him $90,000. He was also given a generous stock option package and a seat on the board. Concurrently, Deeas changed its name to GTX Corp., completing the metamorphosis of the company from grub to butterfly. With a new name, a new business, and all (or virtually all) of the shares under wraps, it was time to get this party started.
The stock began trading on the bulletin board on March 17 at $1.50. Days later, Geoffrey Eiten, publisher of OTC Financial Network, published and distributed a boosterish report on the company. Eiten has hyped many Vancouver "pump and dumps," including Lamperd Less Lethal Ltd. and Silver Star Energy Inc., which had the distinction of being raided by the Vancouver RCMP Integrated Market Enforcement Team in 2005.
Eiten said the company had already received request for its GPS products from 19 countries. "On average, GTX Corp. receives four to six new inquiries per week from prospective licensees," he reported.
Meanwhile, he said, thousands of individuals had expressed interest in buying the company's GPS units. "With a projected retail selling price of around $200 per pair, the Smart Shoe addresses an immediate marketing opportunity of approximately $31.2 million in hardware sales and $28.4 million in subscriber fees."
This report, and accompanying e-blasts, are not exactly unbiased. The report's disclaimer notes that a third party named Global Corp Services paid OTC Financial Network the colossal sum of $902,500 for marketing services, including publication and dissemination of Eiten's newsletter.
Sharpe said he doesn't know who Global Corp is. Whoever they are, they are certainly enhancing the value of his options. The stock traded up to $2.70 this week, giving the company a total stock market value of about $100 million.
"I have to be honest," Sharpe said to me. "It's pretty ridiculous some of the things stated [in the newsletter]. They have not been sanctioned by the board. We are convening a meeting later this week to consider the best way of letting the public know what's sanctioned and what's not."
This sounds good, but the report has already been out for weeks. I am reminded of the woman who, feigning indignation, gives the man sitting next to her 10 minutes to get his hand off her thigh.
