I am concerned that the SEC enforcement team is not taking seriously concerns regarding the fraud that is Southridge Enterprises (SRGE). As I have pointed out on numerous occasions, SRGE is a non-reporting company who until recently was led by CEO Alex Smid of Supatcha Resources (SAEI). Supatcha, if you recall, was shut down by the SEC after posting false mineral assessment reports and after making claims that Russian Billionaire had made a bid for the company:
Dec. 2010: The SEC said in a statement that the suspension order was issued "because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, a geological report concerning the company's mining prospects in Ukraine and a purported tender offer for the company's outstanding shares."
Supatcha said in a news release earlier this week that it had received two unsolicited bids from Russian buyers to purchase the company's outstanding shares. Supatcha's stock price briefly soared after the announcement.
In an almost identical play, Southridge (SRGE) has laid out a scheme that is resulting in identical runs on the market.
1. Southridge claims to hold concessions to mining in Mexico; Cinco Minas Property. Southridge has posted to their shareholders a copy of the concession certification number 221864 signed by a Tatiana Siglar Baca. (http://investorshub.advfn.com/boards/read_msg.aspx?message_id=81760639). The problem is, this concession is also being claimed by a second public company, Bandera Gold and the Mexican Registry supports the claim that claim 221864 is current owned by Bandera Gold (http://www.siam.economia.gob.mx/siamweb/security/cargaTarjeta type in 221864). Southridge claims the purchase of these rights came off a company called Novamex Mineral S.A. Research into this company reveals no internet signature beyond an affiliation with Southridge. ( On March 30, 2009, the Company paid a deposit of $5,000,000 for the properties by issuing a total of 800,000,000 restricted shares at $.00625 to Comercalizadora, Servicios Y Distribuidora Track, S.A. DE C.V.(400,000,000 shares) and to Omar Alejandro Flores Madrigal, Principal Officer, (400,000,000 shares). On April 6, 2009, the 800,000,000 shares were assigned to Novamex Mineral S.A..)
The fact that two penny stock publicly traded companies are claiming the same concessions should be cause for the SEC to step in and investigate.
2. Southridge claims that their operations are being financed by a fund operating under the name of Rockridge Capital Holdings Corp. SRGE claims in a recent filing with OTC markets that starting in July 2010 Rockridge has provided funds in conversion for shares as follows:
On July 14, 2010, the Company received a notice from Rockridge Capital Holdings Corporation to convert $800,000 of its outstanding loan to the Company and 80,000,000 restricted shares were issued at $.01 per share to retire this portion of the debt outstanding, per agreement. (Math is correct @$0.01/share)
On August 10, 2011, the Company converted $86,800 of its outstanding debt to Rockridge Capital Holdings Corporation, at their request, and issued 86,800,000 restricted shares at $.01 per share to retire that portion of the debt outstanding, per agreement. (Math is not correct @$0.01/share)
On November 4, 2011, the Company purchased 200,000,000 restricted shares at $.00625 from Novamex Mineral S.A. and retired these shares back to the Company treasury as part of the Share Buy-Back Program. The Company entered a 3 year, 6% interest promissory note for the original cost and purchase price of $1,250,000.
On November 23, 2010, the Company converted $76,147 of its outstanding debt to Rockridge Capital Holdings Corporation, at their request, and issued 76,147,000 restricted shares at $0.01 per share to retire that portion of the debt outstanding, per agreement. (date is incorrect/out of sequence; Math is not correct @$0.01/share)
On April 10, 2012, the Company converted $82,254 of its outstanding debt to Rockridge Capital Holdings Corporation, at their request, and issued 82,254,000 restricted shares at $.01 per share to retire that portion of the debt outstanding, per agreement.( Math is not correct @$0.01/share)
On May 21, 2012, the Company converted $74,562 of its outstanding debt to Rockridge Capital Holdings Corporation, at their request, and issued 74,562,000 restricted shares at $.01 per share to retire that portion of the debt outstanding, per agreement.( Math is not correct @$0.01/share)
The layout of these funds conversions and share structure changes do not align on several fronts. Beyond Rockridge having no internet presence beyond an affiliation with Southridge, SRGE has made many public releases disclosing their share structure and stock repurchase program. The structure posed to the public is based entirely on the levels identified in this layout of conversion. However, the filing made by SRGE does not then account for the monies received for funds issued. Based on the proper math conversion, SRGE would have received $860K in Aug. 2011 not $86K. Similarly November 2011 would have been $760K and not $76K, April 2012 would have been $820K not $82K, and May 2012 would have been $740K not $74K.
I believe that this sloppy math is based on a complete lack of factual financing and that it is more associated with a poorly executed fraud. For the record, all of these conversions are taking place well above market value as each took place during a priod in time where the market in SRGE was at $0.0005. The filings with OTC Markets for May 2012 identified the first quarter in which the company had any revenues ($980K) and identified immediate profitability of over $300K. The financials posted to the public would be significantly different had the math above been corrected for actual conversion costs.
3. Southridge, like Supatcha has made claims of bids for their mineral concessions by two NYSE companies. SAEI had two unsolicited bids, not one, and SRGE now has two bids with SRGE making a public release that has claimed one is in the value of $550 - $600M. In the November 21 press release SRGE stated:
The Company and its advisers are currently evaluating alternatives and are in advanced discussions with two major NYSE listed metal producers regarding their Jalisco mineral concessions and properties. One of the firms has already signed preliminary documents for the full acquisition of the Cinco Minas property. Southridge would like to give its shareholders an indication of how the funds will be used in the event a full sale is affected for its Cinco Minas Property. The company would like to state that shareholders will definitely participate in a direct, immediate, tangible benefit of such sale (i.e. special cash dividend for 20% of the proceeds from the sale of the Cinco Minas Property or a flat 20 cents per share special one-time dividend). Southridge and its Board of Directors can only state at this time that the amount being discussed is in the range of $550,000,000 and $600,000,000 for its Cinco Minas Property. Due to certain reasons the company cannot fully disclose exact details at this time. However the company felt it was very important to release some details to explain what's in it for shareholders and what the company and its Board of Directors are discussing as this time.
a.) Concessions are rights to mine and not ownership of property. Who owns these concessions are in dispute.
b.) Posting a $0.20 dividend to the public, at a time when the market is trading at $0.007 can be considered highly manipulative.
c.) The company claims the float is 215M shares and yet the stock traded over 98M shares on the day of this news and well below any $0.20 level but well above the prior market. On Friday November 23, more than $400K in shares were traded, again, well below the dividend level.
4. On Friday November 23, 2012, the day the company had stated they would file their next quarter financials with OTC Markets, SRGE announced that they would not be filing on time due to a change in their legal council. Carillo Huettel had been the prior legal represenatives of SRGE. Prior to the most recent filings made in October 2012 there had been very little visibility to the filings of SRGE due to a lack of trade volume and thus risk to the public. Starting in September 2012 with public releases, and with the most recent filing and attorney letter, Carillo Heuttel (Legal representatives to many pump and dump operations) became highly visible. and suddenly they are gone.
DALLAS, Nov. 23, 2012 /PRNewswire/ -- Southridge Enterprises Inc. (Pink Sheets: SRGE) ("Southridge" or the "Company") is pleased to announce today that Southridge Minerals, Inc., its wholly owned subsidiary, has hired new legal representation to meet the Company's expanding legal needs going forward. The new firm is now transitioning to file all of the Company's future disclosures with the OTC Markets and will be the liaison for the Company while facilitating all corporate and legal matters.
Due to the change in legal representation, the Company will be filing its 2012 annual report in the coming week. Southridge will report its fourth quarter and annual results ending August 31, 2012, reflecting record mineral production, revenues and profits as per the Company's new release of September 04, 2012.
Why is the name of the new legal council not identified? Why did the company wait until the day of the filing to make this announcement and how can new council accurately sign off on financials only a week after being retained?
5. Finally, the team of stock market investigators on I-Hub have done extensive research into the executives of Southridge (SRGE) and have identified that the bio's identified for these officers are plagiarized from bio's of successful and researchable players from the industry. Like the funding sources for Southridge, CEO Michael Davies and his executive team have absolutely no internet presence beyond Southridge despite claims of more than 30 years in the industry. Over the past year the research into the fake bio's are summed up here: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=79438940
And with all this consideration I suggest that the SEC finally take into account their recent filings with regards to share ownership and executive compensation. The filing would allude to the fact that none of the officers of this company own any stock in the company (by their accounting of shares) and that Rockridge is a majority owner. The filing would also indicate that the officers are working near free with no account for excecutive salary or compensation. This in itself is a major red flag to the accuracy of the public filings and statements being made by SRGE.
There are slam dunk opportunities to cease acts of fraud before they get too large and unfortunately it does not appear that the SEC is willing to step in and take advantage of such. SRGE is claiming that they are executing a stock buy back program and yet SRGE shows up on the Reg SHO list for excessive FTD's. The FTD's are easily attributed to real shorting matters or more likely, associated with paper hitting the street as officers dump shares into their pump and dump.
Please act responsibly and protect the public from further abuse.
