DD Support Board and Research Team

[nodummy]

EXPU illegally using a Form D 504 offering?

Expert Group Inc (EXPU) is a pink sheet stock that filed a form 15 way back in 2000 making them a non-SEC reporting entity.

EXPU filed a Form D on November 7, 2012 to register $25,000 worth of stock through a 504 exemption

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8899947

Recently EXPU did some OTC filings that help explain how the offering was used

At first EXPU claimed to have done a private placement of 66,000,000 shares in October of 2012, but they rescinded the transaction replacing it with an 80,000,000 share offering on November 5, 2012 which they also ended up rescinding

http://www.otcmarkets.com/financialReportViewer?symbol=EXPU&id=97030

That was followed by the issuance of 80,000,000 free trading shares of stock towards a convertible debt Note of $25,000 on November 28, 2012

See Note 3 at this link http://www.otcmarkets.com/financialReportViewer?symbol=EXPU&id=98526





A $25,0000 convertible Note was clearly listed on the balance sheet for 9/30/12 here:

http://www.otcmarkets.com/financialReportViewer?symbol=EXPU&id=98525

That is a conversion rate of $.0003/share on a day that EXPU opened at $.0025/share, hit a high of $.003/share, and closed at $.002/share. Quite the discount to the market price.


It seems obvious that the Form D 504 offering ended up being used to register the 80,000,000 free trading shares of stock issued for the $25,000 "long term convertible debt", but before I get to the legalities of the way that EXPU used the Form D filing, let's look through the filings and find out exactly how old that $25,000 debt Note actually was.


According to the annual report for the period ending December 31, 2011, EXPU had no debt notes on December 31, 2011

http://www.otcmarkets.com/financialReportViewer?symbol=EXPU&id=76585

EXPU had extinguished all the debt Notes ($146,377 according to the filings) that were on the books on September 30, 2011 thanks to the issuing of over 400,000,000 shares of stock during the last 3 months of 2011

Ugly, ugly stuff

Anybody that does even the most basic DD could see that the EXPU shell has a very long history of ugly dilution including 5 big reverse splits.


Convertible Notes suddenly started showing up after the new year. By March 31, 2012 there were 2 new convertible debt Notes listed ($27,000 and $40,000).

http://www.otcmarkets.com/financialReportViewer?symbol=EXPU&id=80899

That means the oldest the $25,000 convertible debt Note could have been that became 80,000,000 free trading shares on November 28, 2012 was 10 months.



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Now back to the way the Form D 504 exemption was used.

On November 28, 2012 EXPU issued 80,000,000 free trading shares of stock towards $25,000 in "long term convertible debt" which was obviously the same amount registered in the Form D filing

If you look at the EXPU chart and the historical volume you will see how a pump&dump campaign was run on the stock immediately surrounding the issuance of those 80,000,000 free trading shares of stock which included some timely press releases issued by EXPU management





It is illegal to use 504 to issue free trading shares of stock. Period.

504 does not allow an investor to sell the shares they purchase in market transactions. It is an issuer exemption not a resale exemption. Thus, the issuer could solicit and issue shares without a legend. The purchaser of those shares receives restricted securities unless they are registered on a Scor offering which requires among other things that the shares have a minimum price of $1 per share. There are no states that allow the issuance of unrestricted securities based upon an accredited investor exemption.

On top of that EXPU is a shell and a former shell. They cannot issue free trading shares upon debt conversions.

EXPU is like many other pink sheet stocks. They all do conversions either improperly relying upon (i) Rule 504; or (ii) Rule 144. Neither is available. There is no "convertible debt exemption" from the securities laws.


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Another observation:

EXPU does not even include a signature at the end of their most recent filing

http://www.otcmarkets.com/financialReportViewer?symbol=EXPU&id=98620

What kind of management won't even sign the filings on OTC markets?

Also EXPU has had no attorney sign off on any of the OTC filings since 2010. They list their counsel as "none" in the most recent OTC filing linked above.


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I won't even get into the history of the executives controlling EXPU which includes an ugly history of using debt Notes and preferred shares for insider enrichment for one and allegations of thief/breach of contract for another. I'll just say that there is a lot of reasons to be very wary of trusting EXPU based on the history of the shell and some if its insiders.