March 27, 2012
TO ALL CMKM SHAREHOLDERS:
Greetings to each of you from company headquarters! I hope this update finds each of you and your families in good health and with positive outlooks. This update is being published to summarize the details and activities from my recent trip out West on CMKM business.
Since my last update on February 15, 2012 I have had the privilege to communicate with many shareholders by phone, e-mail, and text. I have enjoyed getting to know each of you, and to exchange information and thoughts about CMKM - it’s past, present, and future. I consider our large and diverse shareholder base to be one of CMKM’s biggest assets.
As a brief introductory statement, let me say that my recent trip was both fascinating and very productive. I made stops in Texas, Las Vegas, and multiple cities in California. I met with numerous people and looked at numerous properties on behalf of CMKM. I truly believe that the things I saw and learned, the people I met, and the seeds of progress that were planted will reap benefits for the company in the days ahead.
MEETING WITH LAW FIRMS WITH REGARD TO POSSIBLE NAKED SHORT ACTION
My first stop was in Houston, Texas where I met with two law firms – one firm that specializes in litigation with regard to naked shorting of specific stocks by brokerage firms. The meeting was attended by Bill Frizzell, who knows as much about the history of CMKM as anyone, and by an attorney from the second firm that specializes in securities law.
It is an understatement to say that the meeting was truly fascinating. The law firm specializing in naked short cases is indeed highly qualified, well financed, and has been successful in obtaining settlements for companies that have suffered from naked shorting of their stocks. Typically, a case of this type costs literally millions of dollars to bring to trial, and is usually worked by multiple law firms on a contingency basis. The case must be very strong in order to entice these high-powered law firms to sign on and expend the funds and effort to bring the case to trial.
There is little doubt that CMKX stock was naked shorted during the time frame the stock was being traded. It has been speculated that anywhere from 800 billion to two trillion phantom shares were sold into the marketplace by brokerage firms without shares in hand to cover the sales. However, we face a major obstacle in pursuing a naked short action due to the fact that the statute of limitations limits litigation of this type after five years, and CMKX stock was delisted over five years ago.
There are other avenues that may allow us to pursue this naked short issue in spite of the statute of limitations problem. The three law firms in attendance are studying how to best tackle this case, and will do everything possible to find a way – most likely beginning with a RICO action in a single state with favorable RICO statutes, and expanding from there if successful.
Although I am not at liberty to name the law firms involved, I am confident that we have some of the best legal minds in America chewing on this matter. I will provide more information to you as decisions are made in this pursuit.
WELLS FARGO LAWSUIT
While in Houston, I met with one of two additional law firms we have brought on board to assist with the Wells Fargo lawsuit. These two firms have been successful in previous cases against Wells Fargo Bank, and add much firepower to our case. Due to the fact we have an ongoing case against Wells Fargo, I cannot share more details at this time. However, I am confident that we have excellent representation, and am determined to make sure that our lawyers pursue this case with intensity and vigor to insure CMKM the best chance of recovery in this matter.
MEETING WITH MR. EMERSON KOCH
My next stop was Las Vegas, where I had the pleasure to meet Mr. Emerson Koch in person. He is a fine gentleman, and truly has a heart for the CMKM shareholder base. We are very fortunate to have him as our partner in the 1010 Joint Venture.
Mr. Koch has maintained the 1010 claims in good standing for several years at his expense, and has drilled core samples on the 1010 lands that are stored in his warehouse in Saskatchewan. The 1010 JV agreement calls for CMKM to put up substantial sums of cash at intervals to follow the terms of the agreement. However, CMKM has not had the capital to honor our side of the agreement to date. By rights, Mr. Koch could have walked away from this deal long ago, but has been extremely patient as CMKM management attempts to rebuild the company’s finances.
It is clear that all of us want to know what the core samples consist of – are they filled with diamonds and other valuable minerals, or are they worthless samples? Many shareholders have contacted me with questions as to why we haven’t tested these core samples, and the simple answer is that we have not had the funds to honor the terms of the 1010 agreement, or the funds to test the samples.
The 1010 JV is a critical piece to the puzzle for CMKM’s future. A few shareholders have offered to put up money to help with the cost of testing the samples. Well, the day is fast approaching when the opportunity to invest in the core sample testing will be available.
Mr. Koch and I agreed that he will get quotes immediately and put together a budget for the testing of the core samples, and I will find a way to raise the money to get the testing done. I have several avenues to pursue in an effort to raise the funds needed for testing, with the most logical being the offering of “preferred shares†to individuals willing to invest in this venture. I am investigating the legalities of offering preferred shares, and looking at other funding options, including private venture capital.
I will provide more information on this project during the online company meetings which begin in April. The good news is that we will may soon be testing core samples if the needed funds can be secured!
VISITS TO NUMEROUS PROPERTIES BEING PURSUED FOR RECOVERY
I personally visited and viewed various properties in Nevada and California that CMKM is pursuing through legal actions. These properties were purchased by former CMKM insiders, and the company hopes to secure title and ownership to these properties through the large judgments we hold against these insiders. Once the company gets possession of these properties, I will attempt to sell them to generate operating funds and improve the CMKM balance sheet.
I looked at every property that we know about at this time, but we believe that there are many more properties that we will uncover eventually. There is an ongoing, daily effort to locate these properties, much of which is done by shareholders investing their valuable time for the CMKM cause. I offer a hearty word of “thanks†to these individuals for their great work.
The properties I saw rank from C+ to A- in terms of salability, in spite of the weak real estate market that exists in most of the U.S. These properties are just another piece to the CMKM puzzle – we need the chunks of cash that each parcel could generate to stabilize and strengthen company finances.
I also took a long ride from Los Angeles into the sparsely-populated areas of southern California, and located a large parcel of land that is pledged as collateral against a loan made by a former insider to another company several years ago. Due to judgments against these insiders, CMKM is entitled to the proceeds from the loan repayment, which is currently in excess of $900,000, but is in default. I have instructed our legal team to pursue collection/foreclosure efforts diligently in this matter. Due to the anticipated litigation, I cannot comment further on this matter at this time, but will update you at the appropriate time.
VISIT WITH MR. AL HODGES
My final stop was to meet with Mr. Al Hodges and Mr. Dennis Smith. I felt that meeting with Mr. Hodges was a very important part of my trip, and I was pleased and thankful that both men took time to see me in spite of busy schedules.
Our meeting was very cordial, pleasant, and informative. I came away from the meeting more convinced than ever that Mr. Hodges believes in his cause with all his heart. I truly believe he has invested all of himself, his reputation, and his legal expertise into seeking a return for the plaintiffs, and ultimately all CMKM shareholders.
I informed Mr. Hodges of all the efforts that are ongoing from the company side to rebuild value into CMKM. He assured me that none of our company efforts are or could be a hindrance to his efforts for recovery. I offered my assistance if it is ever needed to help bring closure to his recovery efforts, and he assured me that he would let me know if I could help somehow.
I asked Mr. Hodges what he would want me to share or relay to the shareholders at this time. His response was that he feels very strongly that the long-awaited funds will be released very soon, and that the battle is nearly over. So, I am reporting this to you, the shareholders, per Mr. Hodges’ comments.
Please understand that I have no “inside†information one way or another. However, I truly hope and pray that Mr. Hodges prevails for the benefit of all shareholders.
UPCOMING COMPANY WEBINARS
I am planning a minimum of two (probably more) shareholder meetings in the month of April. I am in the process of getting the necessary training to host these meetings, so I cannot announce firm dates at this time.
The web meeting room will allow up to 1,000 attendees, and will be recorded and archived on the company website for those who are unable to participate in the live event. During these meetings I will provide updates on company activities, and then allow plenty of time for questions.
My hope is to continue increasing company transparency and building shareholder unity and trust through these meetings. I may not have the answer to every question, but will provide honest answers to the ones that I can answer.
Please watch the company website for firm dates and times for these meetings, plus instructions on how to sign up and participate.
SALE OF CLAYTON, GEORGIA PROPERTY
We have a firm contract on the 24 acre tract in Clayton, Georgia. The closing is scheduled for April 11, 2012. I will report more about this sale during the online shareholder meetings.
SUMMARY
My current business plan for CMKM is very simple:
1. Cut overhead to the bone and keep it low.
2. Bring in cash from any and all available sources – recovery and sale of properties, collection of funds owed, and ongoing/future litigation recoveries.
3. Raise funds for the purpose of testing the 1010 core samples.
4. Provide honest, accurate information to shareholders.
5. Build shareholder unity and trust.
Of course, I hope all of these efforts translate to the rebuilding of a viable, profitable CMKM, and a return to trading. I am passionate about providing a return to you, our shareholders.
If you believe in prayer, pray for the company and for me as I endeavor to rebuild CMKM. I look forward to speaking to many of you during the online meetings. Take care, and God bless….
Steve Kirkpatrick
February 15, 2012
AI
