Just saw this on RB.. Another report..
Jupiter Global Holdings, Inc. - Thinking Ouside the VOXBOX
Investigative Reports
July 1 2005
Companies, like people, tend to fall into familiar patterns, repeating previous successes and, yes, past failures. To borrow a phrase from George Santayana (and posters adorning the walls of countless college dorms since at least the ‘60’s) “those who cannot remember the past are condemned to repeat it”. And, he might have added, investors who fail to recognize the past may mistake it for the future.
The latest case of déjà vu comes courtesy of Jupiter Global Holdings Corp. (Pink Sheets: JPHC). Recent events at Jupiter should strike a familiar chord for those who have been following the Company since it was calling itself LiveStar Entertainment Group. LiveStar, which aspired to make a splash in the entertainment world, instead came up dry. Back in 2003, LiveStar was touting plans to acquire a Toronto, Canada nightclub called “The Sequel” as its initial foray into entertainment. After a prolonged courtship, on August 12, 2003 LiveStar announced that it had acquired “The Sequel” from an individual named Terence Lall in exchange for a generous package of LiveStar stock and cash. See, Livestar Entertainment Group, Inc. — This Sequel Has A Surprise Ending.
Then the story changed. Less than a week later, LiveStar revealed that it was about to be acquired by a Toronto group controlled by Lall. And, just that quickly, the acquirer became the acquiree. That too would soon change. Lall’s group did not gain control of the Company, apparently content to settle for a heaping helping of LiveStar stock instead. Then, on June 4, 2004 LiveStar disclosed that it would not acquire The Sequel after all, because the nightclub had failed to provide audited financial statements required by the SEC. Instead, LiveStar would lease the Toronto venue, and Lall apparently would receive rental payments in addition to the cash and stock paid in connection with the original transaction. See, Update: Livestar Entertainment Group, Inc. — Sequels Seldom Live Up To The Hype.
Flash forward to late 2004, as LiveStar shifts its focus from sexy show biz to the sizzling VoIP market. VoIP - Voice Over Internet Protocol - allows users to make telephone calls over the Internet, offering an alternative to traditional telephone services. In November 2004, LiveStar threw its hat in the VoIP ring, declaring plans to acquire 50% of something called VOXBOX, an aspiring but fledgling VoIP company that did not appear to have any operations at the time. See, Update: Jupiter Global Holdings, Inc. - What? And Give Up Show Biz?
Major, well-financed players and established businesses, including Vonage, Time Warner and Comcast, already are firmly entrenched in the industry, and prepared to spend millions of dollars to capture customers. That did not deter VOXBOX’s President Ray Prescott, who proclaimed in a February 15, 2005 press release that “we are planning for VOXBOX to become a leading provider of VoIP services to consumers and businesses.”
Mr. Prescott proved to be as ubiquitous as LiveStar’s earlier partner of choice, Terence Lall. Just days after announcing the VOXBOX acquisition, Jupiter revealed that it had signed a letter of intent to acquire wireless telecom assets from an entity called Global Bancorp, Inc. The CEO of Global Bancorp was none other than Ray Prescott.
Soon the Company, which by now had changed its name to Jupiter, was extolling the success of VOXBOX. On March 8th, the Company issued a press releasing stating that it had entered into an agreement to sell “a minimum of 10 territories over a number of states” to a single unidentified telecom development and marketing firm. The Company later explained that dealers would have the opportunity to build a VOXBOX service in their assigned area. Emboldened by this development, the Company declared that it planned to become “the dominant force in the VoIP communications industry.”
Look out Vonage, Time Warner and Comcast. Here comes Jupiter. VOXBOX, it seemed, would be the foundation for Jupiter’s business.
Subsequent press releases continued to reflect VOXBOX’s standing as the cornerstone of Jupiter. On March 30, 2005, Jupiter disclosed plans to enhance its VOXBOX operations. The Company claimed that it was engaged in “discussions” with a “U.S.-based telecom services company that is generating over $12 Million in annual revenues,” and that would become “the Backbone” of its VOXBOX venture. Although the Company did not name the potential acquisition candidate, it described the target as a “facilities-based telecom applications service provider” that would provide VOXBOX with instant revenues and a customer base.
VoIP was not the only venture on Jupiter’s agenda. The Company also pursued and closed the acquisition of an entity called PromoStaffing.com LLC, which it described as “a revenue generating promotional marketing company with clients such as Chrysler, AT&T, PepsiCo, Campbell's Soup, Wal-Mart, Malibu Rum and Coca Cola.” The amount of those revenues remains the subject of conjecture; Jupiter has not yet filed any financial statements for PromoStaffing.
In fact, Jupiter has abruptly stopped filing required current financial information with the SEC. The Company last filed a current financial report on November 22, 2004 - a Form 10-Q for the quarter ended September 30, 2004. On December 3, 2004, Jupiter filed an Amended Form 10-K Annual Report for the year ended December 31, 2003. The Company has provided no current financial information for the period since September 30, 2004 – a full nine months. On March 31, 2005, Jupiter advised the SEC that it would be unable to file its Form 10-K for the year ended December 31, 2004 in a timely manner, but promised to do so by April 15, 2005. That report still has not been filed. On May 13, 2005, the Company requested additional time to file its quarterly report for the period ended March 31, 2005. That report also has not been filed.
Jupiter may not have been filing financial reports but it continued to issue press releases at a rapid pace. On May 12th the Company announced that its planned acquisitions were progressing and claimed that “upon closing and financing all of its current and planned holdings,” Jupiter’s financial statements would reflect $10 to $12 million in revenues and $3 to $5 million in assets. It appeared that VOXBOX and PromoStaffing were expected to form the foundation of this burgeoning business.
There were, however, changes on the horizon. On May 17th, Jupiter announced that it planned to move forward with plans to spin-off PromoStaffing as a separate public company - “but not until the Company files Promo Staffing's audited financial statements.”
Then, suddenly, the VOXBOX foundation began to shake. On June 9th, Jupiter announced that it also planned to spin-off VOXBOX as a separate public company in order to help VOXBOX obtain funding. Would Jupiter continue to control VOXBOX, the foundation of its operations? Unfortunately, that did not seem to be the case. VOXBOX was drifting away from the Company – just as “The Sequel” had a year earlier. On June 13th, Jupiter stated that Global Bancorp would purchase VOXBOX as part of a “restructuring plan.” Global Bancorp, which trades on the Pink Sheets under the symbol GBBI, would then change its name to VOXBOX, and poof, VOXBOX would become a public company – or at least a public company would become VOXBOX.
A day later, on June 14th, the Company announced that it had signed a Letter of Intent to acquire that “US based telecom services company” as a complement to VOXBOX. But who would that benefit – Jupiter or Global Bancorp?
Where will this leave the Jupiter shareholders? According to the June 13th press release, Jupiter would receive “a minority interest” in Global Bancorp and retain the right to acquire up to 50% of Global Bancorp in the future. A June 15th press release said that Jupiter would be receiving somewhere between 3.5 million and 5 million shares of Global Bancorp in exchange for VOXBOX, and that those shares would be distributed to Jupiter shareholders as a dividend “on a reasonable prorated basis.”
Unfortunately the definition of reasonable has proven to be fluid – and quite confusing. On June 21st, the Company announced that all shareholders as of July 1, 2005 would receive “a dividend on a 200-for-1 prorated basis of the common stock JUPITER owns in Global Bancorp.” If shareholders thought that meant they would receive 200 shares of Global for each share of Jupiter, they were wrong. Less than five hours later, the Company issued a second press release clarifying the issue: each shareholder of Jupiter would receive one restricted share of Global Bancorp for each 200 shares of Jupiter owned.
On June 27th those numbers changed once more. Jupiter was now saying that its shareholders would receive one restricted share of Global Bancorp for every 20 shares of Jupiter after giving consideration to a recent 10 for 1 forward stock split by Global Bancorp. What will those shares be worth, assuming they become non-restricted in the future? Global Bancorp does not file regular public reports so the value of that Company remains a mystery.
For months, Jupiter had been extolling the potential of VOXBOX – suggesting that it would provide a foundation for enhanced assets and revenues. Then, as it had in the past, the Company appeared to be abandoning its prized venture. Shareholders may be reassured – or troubled - by the idea that VOXBOX has not really moved far away, even if it has been removed from the Jupiter balance sheets, should they ever reappear in the form of public filings. Jupiter maintains its offices at 62 W. 8th Ave., 4th Floor, Vancouver, BC, Canada. Global Bancorp maintains its offices at 62 West 8th Ave. Suite 400, Vancouver, BC, Canada.
Howdy neighbor.
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