Replies to post #2212 on SK3 Group Inc. (SKTO)

[stoploss73]

2009
Robert Hipple, a lawyer and the former CEO and CFO of now-defunct business development company (“BDC”)2 iWorld Projects & Systems, Inc. (“iWorld”), overstated the value of iWorld’s primary asset – its investment in several portfolio companies – in three consecutive quarterly filings in 2005. Hipple, who personally performed iWorld’s accounting and financial reporting functions, also misled iWorld’s auditors into believing that the company had independently evaluated the worth of its portfolio companies. As a result of his conduct, Hipple i) violated the antifraud provisions of the Exchange Act, filed false Sarbanes-Oxley executive certifications, misled iWorld’s auditors, falsified books and records, and knowingly circumvented internal controls; ii) violated Section 57(a)(1) of the Investment Company Act; and iii) aided and abetted and caused iWorld’s violations of the reporting, books and records, and internal controls provisions of the Exchange Act, and iWorld’s violations of the BDC books and records provision of the Investment Company Act.
B. RESPONDENT
Robert John Hipple, age 64, resides in Cocoa, Florida. He is an attorney licensed in Florida and Georgia. Hipple and an associate controlled the management and operations of iWorld Projects and Systems, Inc. (“iWorld Florida”), a private Florida company, when it was acquired in early 2005 by iWorld Projects & Systems, Inc. (“iWorld”), a business development company. At the time, Hipple was the CEO of iWorld Florida. After the acquisition, Hipple formally became iWorld’s CEO and remained in that position until he resigned in March 2006. He also acted as iWorld’s principal financial officer.

http://www.sec.gov/litigation/admin/2010/34-61688.pdf

2007
Plaintiff-appellee David K. Broadbent (“Receiver”) in his capacity as Receiver for Merrill Scott & Associates, Ltd. (“Merrill Scott”) was awarded summary judgment against defendant-appellant Robert J. Hipple after the district court determined that Mr. Hipple breached his fiduciary duties as an officer and director of Merrill Scott. Mr. Hipple appeals, contending among other things that the complaint should have been dismissed pursuant to Federal Rule of Civil Procedure 19(b) for failure to join an indispensable party.
Exercising jurisdiction under 28 U.S.C. § 1291, we affirm in part, vacate in part, and remand for further proceedings. We affirm the district court’s denial of Mr. Hipple’s motion to dismiss for lack of jurisdiction, because the court unquestionably had jurisdiction over the action in which the Receiver was appointed, and this action was clearly filed in furtherance of the Receiver’s goals. We also affirm the district court’s decision to strike Mr. Hipple’s motion for summary judgment as untimely

http://ca10.washburnlaw.edu/cases/2007/11/07-4078.pdf

Hope this helps you to understand why I think Hipples a crook, and there is more, but I thought this would be enough. GL

[LiquidateNow]

This is what I have been able to get with DD:
The Regenetech deal as stated in the S-1 was an acquisition of Regenetech by HOTI. It failed because shareholders objected because the Texas law on M&A was not followed. After months of trying to find a way to get it done, it was decided to do a stock swap where shareholders of Regenetech would swap their shares for HOTI shares, with HOTI thereby getting voting control of Regenetech.. One (maybe more) shareholder of Regenetech objected because M&A law not followed in that M&A law requires financial disclosures, audits, etc. Objection was well taken under the law. Even though large percent of shareholders were in favor, it only takes one to block it if not done according to law. By the way, this becomes important with the merger/sale/acquisition of the requirement for shareholders meetings and financial disclosure in the HOTI/SK3/Eneftech deals.
Regenetech was relying on operating capital from HOTI. Since the stock swap was not accomplished, HOTI did not provide so the deal died.
I’m sure there is another side of the story so if anyone can get it from HOTI, please post. My info is limited to what people can disclose and I believe everyone has the phone numbers of Regenetech present and past members to get their side.
Why the HOTI people are still on the Regenetech Board is a mystery.
From publicly available information, it appears that this is a deal that should have been done. If one looks at Xenotis Pty Ltd, OTS and Regenetech, the combination would have been extremely strong. If one were to take the Xenotis Pty Ltd cell scaffolding work and combine it with Regenetech’s cell and tissue growth, Rudd’s Hayfleck work, and OTS’s transport systems, it would be very significant. What this means is you could take a body part, use stem cells with scaffolding to rebuild it and have plenty of time to get it to a person for implantation before it dies. If it were an allogeneic transplant (persons cells to himself), there would be no rejection. This would be like owning the keys to Fort Knox.
There were probably a lot of egos involved here, and that is usually where men get off course. However, it is very bad for business.
If there were a combination, Holder and crew should have been on top. OTS has very strong management as does Xenotis Pty Ltd, but Xenotis Pty Ltd is geographically too far away to run the show. HOTI has so-so management as demonstrated by not calling annual meetings of shareholders and producing financials. Regenetech has weak to very weak management so they really would not have anyone to supply to a combined entity. Still, it appears that this could have been a good deal.
I want to take a minute to discuss why there may have been little or no DD of HOTI by the companies they acquired. We know from the S-1 that these companies were essentially all in need of cash. HOTI has been saying it has a lot of available money. Let us say I own ABC Company and I need $300,000 in operating funds. My cash flow and balance sheet makes it virtually impossible to obtain the funds in this market. Even though my company may be worth $5 million if I get the operating funds, if I do not get it, it may mean Chapter 11. HOTI says they will acquire and provide the operating funds. Since they are going to be vertically integrated, they will not interfere with our operations. Further, they are giving us HOTI stock for our stock and HOTI is going public with an IPO at over $10 per share. If that happens, we are all millionaires. We do not have to do a lot of DD. The only thing we need to protect ourselves is make sure the acquisition has a strong unwind provision that provides if HOTI does not fund the operating funds or go public within a certain time, the acquisition is totally unwound. Now, assume HOTI funds the operating funds but goes no further. We are off and running and have saved our company and got it back. So, as long as we get the operating funds, why do we need DD on HOTI. See the picture?
If anyone can get more on the Regenetech deal, please post.