Excerpt taken
.from Sharesleuth.com '07
Dennis L Mast:
"The SEC said HydroFlo repeatedly published false statements claiming that its subsidiaries were providing water filtration equipment and water purification consulting services to government agencies engaged in Hurricane Katrina relief efforts.
The complaint said the company had not shipped any products nor provided any relief services. It also said that HydroFlo had touted a positive report by a stock analyst as being independent and unbiased without disclosing that it paid $19,500 for the coverage. The SEC said the false releases increased the trading volume and price of HydroFlo’s stock.
UTEK’s SEC filings show that the company sold 364,956 shares of HydroFlo’s stock between Sept. 13 and Sept. 22, 2005, generating about $226,000 in proceeds. UTEK reported holding 6.34 million shares of HydroFlo on Sept. 30, 2005. At the time, UTEK valued the stock at $3.68 million, which made it the company’s second most valuable holding.
Hydroflo’s shares fell sharply in October 2005 after the company issued a long press release clarifying its earlier announcements. The stock has continued to decline through 2006. It closed Tuesday at 2 cents a share.
UTEK gave away or abandoned its right to the remainder of its HydroFlo stock in the second quarter of this year. The company said in an SEC filing that it donated 5.1 million shares of HydroFlo’s stock worth $663,000 to four nonprofit institutions. UTEK said it discovered that HydroFlo had been structured as a closed-end management investment company -- like UTEK -- and that its holdings in HydroFlo conflicted with regulatory limits for those types of entities. UTEK said it also abandoned its rights to another 400,000 HydroFlo shares.
UTEK did not disclose in its own SEC filings the regulatory actions against HydroFlo and Mast. Nor has it disclosed any of the SEC cases against other partners, even though those actions invariably led to declines in the share prices of those companies and the value of UTEK’s portfolio.
George Moore, who took over as HydroFlo’s chief executive in July, told Sharesleuth that the public statements that drew the SEC’s attention were the result of Mast’s overexuberance about the company’s prospects and were not an attempt to manipulate the market for the company’s shares.
“He’s an entrepreneur,’’ Moore said. “His whole mindset looks to the future, and his cup is always full. That’s a dangerous thing in today’s corporate world.’’
HydroFlo has been selling water pitchers and other products that incorporate the arsenic-removal technology it licensed from UTEK, Moore said. It has announced plans to spin off that subsidiary to its shareholders, creating a new company.
“It’s a very good technology, to be honest, and has a very good future,’’ Moore said.
Moore declined to say how much revenue it was generating from the technology it licensed through UTEK. The company’s most recent annual filing with the SEC listed no sales.
It seems Mast may have had an earlier patent on the air bubble thingy...
