Plastic2Oil Inc (PTOI)

[Artiztic1]

I think the SEC rightfully wants their heads!


34. Almost immediately following the filing of JBI’s Form 10-K on March 31, 2010,
Baldwin, Bordynuik, the business consultant, outside counsel, and newly hired accounting and
audit firms consulted about perceived problems associated with the 10-K filing. Baldwin himself
acknowledged that by at least this time he became aware that GAAP required the media credits
to be booked at cost, rather than the valuation used, and approved by him, for the Form 10-K
Case 1:12-cv-10012 Document 1 Filed 01/04/12 Page 15 of 2816
filing. By this time Baldwin also reviewed information relating to press articles and other media
obtained by JBI that were charged against the media credits and knew that the media credits had
little to no real value. As a result, Baldwin knew, prior to JBI’s Annual General Meeting
(“AGM”) on April 24, 2010, that listing the media credits at $9.997 million was, at the very
least, a substantial overvaluation and would have to be restated.
35. Despite this understanding Baldwin made a presentation at JBI’s Annual General
Meeting, attended by JBI shareholders, that misrepresented JBI’s financial position. Baldwin
failed to inform the shareholders that the media credits were erroneously booked and would have
to be written down significantly and potentially in their entirety. Instead, Baldwin made
misrepresentations about the media credits being a current asset at a nearly $10 million valuation that would not be on the balance sheet at the same time the next year because they would need to
be expensed. In making these misrepresentations Baldwin failed to inform the shareholders that
he then believed the media credits to be, at a minimum, overvalued by nearly $9 million, and at
worst, completely worthless and needing to be written off entirely. Baldwin also failed to inform
the shareholders that he believed the company most likely would need to restate its financial
statements as a result of the overvaluation of the media credits.
36. Bordynuik was present at JBI’s Annual General Meeting and was aware, both
before and after, of the representations Baldwin made about the value of the media credits. At
the time Bordynuik also was aware that the media credits were significantly overvalued in JBI’s
financials and that the company likely would have to restate as a result. At the time of JBI’s
Annual General Meeting, Baldwin and Bordynuik both were aware that JBI was still soliciting
investors for one of the PIPES that ultimately raised approximately $8.4 million during the
period of overstatement.

They both knew before the AGM that the credits were worthless. Yet,they continued selling shares via a new private offering.

SEC Form D:

http://www.sec.gov/Archives/edgar/data/1381105/000121390010001807/xslFormDX01/primary_doc.xml


X New Notice Date of First Sale 2010-04-15

Total Offering Amount $4,000,000 USD
Total Amount Sold $1,330,316 USD
Total Remaining to be Sold $2,669,684 USD

On May 20, 2010, JBI, Inc., (the “Company”) consummated a confidential private placement (the “Private Offering”) with certain accredited investors for the issuance and sale of 488,779 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) at per share price of $4.00 for aggregate offering proceeds of $1,955,116.

http://www.sec.gov/Archives/edgar/data/1381105/000121390010002141/f8k052010_jbi.htm

Then on May 21st 2010 right after ending the PIPE offering, they announced what they knew all along that the credits were worth nada!

They let everyone know that via 8K that the Company’s previously issued audited financial statements for the year ended December 31, 2009, filed on Form 10-K with the Securities & Exchange Commission (“SEC”) on March 31, 2010 and the interim financial statements for the period ended September 30, 2009, filed on Form 10-Q with the SEC on November 16, 2009, should no longer be relied upon due to questions regarding: 1) the accounting treatment and related disclosures of two acquisitions which were completed during 2009 and 2) the valuation of media credits acquired by the Company during 2009 through the issuance of common stock. The Company’s former independent registered public accounting firm Gately and Associates, who was dismissed on May 13, 2010, was informed of the matters disclosed above.

I hope they both lose everything, like some of their shareholders probably did.