XTMS NEWS
(recap)
Four Market Makers Allegedly Sell Naked
Posted on Tuesday, March 13 @ 02:00:00 CDT
By Sherri Snyder
MN1 Staff Writer
BAKERSFIELD, Calif. (March 12, 2007) – Xtreme Motorsports of California Inc. (XTMS.PK) today, requested a Non-Objecting Beneficial Owner List (NOBO), a current Depository Trust Corporation Shareholder Position Report (DTC Sheet) and hired a forensic accountant to investigate possible naked short selling.
Responding to shareholder concern of dilution surrounding Xtreme, the company has secured the cancellation of about 394 million of its 839 million shares of common stock issued and outstanding. Xtreme President and CEO, Alan McCaa, announced in a press release that he has cancelled all of his restricted common stock, totaling about 254 million shares, to express his concern for the situation, shareholders and his belief in the success of Xtreme.
“While we have identified at least four market makers perpetrating significant shorting of our stock, our efforts to cause these groups to cover and improve our quoted price per shares through the issuance of dividends have not had the desired effect,” said McCaa. “By way of this immediate cancellation of a substantial number of our outstanding shares, we are bringing an immediate benefit to shareholders who have purchased stock in the open market -- each now owns 47 percent more of the company.”
McCaa added that, following regulation SHO and NASD Rule 3360, NASD member firms have reported their short positions monthly; those reports show a 4,208 percent increase in January to February short position. McCaa made it clear the company intends to investigate and take proper actions against anyone involved in naked short selling.
“Our understanding is that the findings of forensic accounting firms are admissible in legal proceedings and we intend to pursue all legal action to address this shorting abuse, no matter how far it may go. Illegal short sellers need to be brought to account,” he said.
Naked short selling, illegal it may be, still happens quite often. But when it’s your company in the headlines and you’re “baring all,” it’s a different matter.
“We have all often read of or experienced the growing problem of naked short selling seen in many publicly traded stocks. Until this year, this has never been a concern for Xtreme, but given the recent volatility and subsequent decline of our stock price, we are now painfully aware of the issue. Other than growing our business, I have, over the last few days, taken several steps that I hope will convey to shareholders that the company believes the shorting to be a mission critical issue.”
In a press release earlier today, the company gave an update on the company’s sale structure and letters of intent. Current company sales under contract total about $2.1 million. This includes $1.7 million in dealer orders and about $400,000 under order from private buyers. Additionally, a letter of intent with a dealer for an additional $850,000 in 2007 vehicles is in the works. Xtreme is also handling about $9 million in outstanding customer quotes, $5 million of them potential new dealer purchases, $3.5 million in private customer quotes and $500,000 for an opportunity with the Olympic Games.
“We will continue to update shareholders regarding the status of this recapitalization effort, as well as any developments in our naked short selling forensic investigation,” McCaa continued. “We also wish to assure shareholders that the company has no plans to further dilute shareholders, other than the distribution of dividends which will take place as previously announced, or increase our authorized capital.”
As of Monday afternoon, shares of Xtreme Motorsports (XTMS.PK) were trading at $0.004.
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