The Jailhouse

[nanuck 370]

The Wolfson/Surber/Chapman Clan at it again...

Dark Dynamite, Inc. - Implosion for Investors

These are dark days for holders of Dark Dynamite common stock – but not for Richard Surber. Surber, the corporate consultant and penny stock deal-maker remains firmly in control of Dark Dynamite, Inc. (OTCBB: DDYN), with his holdings virtually intact. Public investors are less fortunate On March 22, 2005, the Company disclosed plans to implement a 1000 for 1 reverse-split of its common stock. As a result of the Company’s action, the authorized common stock will be reduced from 5 billion shares to 5 million shares. Public shareholders will see their holdings diminish accordingly; someone holding 1000 shares of Dark Dynamite will now own a single share.

This is not the first time around the floor for this dance step. On November 8, 2004, the Company implemented a 1 for 2000 reverse-split, reducing the authorized common stock from 5 billion shares to just 2.5 million shares. Two weeks later, on November 22, 2004, the Company amended its Certificate of Incorporation once again, restoring the 5 billion authorized shares.

It did not take long for Dark Dynamite to begin handing out those shares once again. In December 2004, the Company registered over 250 million shares on Forms S-8 for "The Amended 2004 Benefit Plan of Dark Dynamite, Inc." Later, on January 21, 2005, the Company filed an amended Form S-8, withdrawing from registration all of the shares previously registered for the 2004 Plan, but not issued. Since Dark Dynamite did not say at the time how many of the shares it had issued, it was not possible to determine how many were being withdrawn from registration.

That was just the start – even if it marked the end of the “2004 Benefit Plan.” On January 25, 2005, Dark Dynamite filed a Form S-8 registering 2 billion shares of common stock for the "2005 Benefit Plan of Dark Dynamite, Inc.(our emphasis)" The shares were targeted for employees, officers, directors, consultants and advisors – although no recipients were identified.

Names may not have been mentioned, but the faucets had been opened and stock was beginning to flow from Dark Dynamite. On January 28, 2005, the Company filed a Form 8-K saying that its Board of Directors had authorized the issuance of 809,500,000 shares registered 2005 Benefit Plan. The shares, which were issued to still unnamed "employees and contractors," brought the total number of issued shares to 1,046,839,355.

Shares have continued to pour liberally from the Dark Dynamite coffers. According to a Form 14C Preliminary Information Statement, filed by Dark Dynamite of March 23, 2005, disclosing the latest reverse split and shrinkage of authorized common stock, 1,660,839,355 common shares were outstanding as of March 1, 2005.

Dark Dynamite had yet to disclose who received the shares registered under its 2005 Benefit Plan – but there has been sufficient time and ample opportunity for those individuals to sell their shares. Over 1.5 billion shares have changed hands since January 26, 2005, the day after the Company filed a Form S-8 Registration Statement for the 2005 Benefit Plan.

Public shareholders who bought those shares will be licking their wounds now that Dark Dynamite has determined to leave them with a fraction of their original purchases.

One person who will be feeling no pain from the process is Richard Surber, the Company’s designated “consultant” who, by virtue of his control of Diversified Holdings X, Inc., and his personal holdings, is hanging onto 5 million shares of Dark Dynamite preferred stock. Dark Dynamite is not calling for a reverse-split of its preferred shares – all of which are owned by Surber and the companies he controls. Since each of the preferred shares may be converted into 25 shares of common stock, and each preferred share has 25 votes on all corporate matters, Surber wields 125 million votes. He also owns or controls 451 shares of common stock.

Meanwhile, the Company is making no pretense about its future plans. A Form 8-K disclosing the reverse-split proclaims that the Company plans to increase the authorized common shares once again within 45 days. Déjà vu all over again.

Dark Dynamite shareholders must be getting whiplash by now, watching shares increase and decrease at the whim of two men, the Company’s sole director, CEO and CFO, Jared Gold, and its controlling shareholder Surber. Thanks to the decisions imposed by that pair a shareholder who owned 1 million shares before the November 8th reverse-split now would own one half of a share.

Some investment, huh?

http://www.stockpatrol.com/article/key/darkdyn305