10 Jan AI Document Services Inc (AIDC) – stock research report
Last week on Wednesday, January 6th, AI Document Services Inc (AIDC) saw its first ever volume then the ticker exploded with over 3 million shares traded on January 7th quickly making it a ticker of interest to us.
Sometimes when a ticker sees that much volume all in a tight price range immediately when it starts to trade for the first time ever it can be a sign of boiler room activity, or a sign that the ticker is being set up for some kind of paid promotion, or it could end up being nothing at all. Because of the possibility that something might be brewing for AIDC we decided to take a closer look at the ticker.
What immediately jumped out at me when I scanned the filings quickly for anything that might point to a possible future paid promotion was 42,000,000 shares that were issued at the end of 2013 at $.001/share to cover $42,000 in debt originally owed to the attorney used to take the ticker public back in 2009, Gary B Wolff, for his going public services.
According to the filings, Gary B Wolff sold portions of that $42,000 debt Note to some unnamed third parties who then converted the debt into 42,000,000 shares at the end of 2013.
Though AIDC only lists its float at 22,000,000 shares as of October 2015 on the OTC Markets website, the filings give us no reason to think that any of those 42,000,000 shares issued for that $42,000 debt are restricted. We believe that all 42,000,000 shares can be made free trading if they haven't all become free trading already. Since AIDC never traded before last week, those 42,000,000 shares had yet to enter the market. At the initial trading price of $.13/share those 42,000,000 shares issued for just $42,000 in debt are currently worth $5,460,000 which is plenty of motivation for some kind of paid awareness campaign for the ticker.
Now that we know that AIDC has the right set up for a paid promotion, let's back up and take a bigger look at the ticker itself.
AI Document Services Inc was incorporated in Delaware on March 19, 2007 by Mark A Cohen.
Mark A Cohen was issued 9,230,000 shares as the founder of the company and assigned the position of CEO. Another 770,000 shares were sold to a group of 39 seed shareholders at $.001/share raising $770 cash. Included in that group of seed shareholders were Mark Cohen's wife, Elizabeth Cohen (10,000 shares), Mark Cohen's son, Richard Cohen (100,000 shares), three other children of Mark Cohen (10,000 shares each), Gary B Wolff (300,000 shares), and Gary's son, Brian Wolff (10,000 shares).
The business plan for AI Document Services was to take over the pension writing segment from a company named Actuarial Ideas Inc which was also controlled by Mark A Cohen.
At the time that AI Document Services Inc filed to go public in June of 2007, the company had no cash because all of its revenues were being paid back into the company to cover management fees.
It took 16 months and several amended filings, but finally in October of 2008, the SEC granted AI Document Services' request to go public. AI Document Services Inc was given the ticker symbol AIDC.
Gary B Wolff
The attorney used for to provide the legal opinion for AI Document Services Inc (AIDC) was Gary B Wolff. Since AIDC had no cash, it had to issue Gary B Wolff a $42,000 convertible Debt Note to cover payment for his services. We've seen the name Gary B Wolff before in past reports, but until now I never really realized that he also took convertible debt notes from several of the other tickers that he participated with. Like with AIDC, the convertible debt note would later be transferred to other parties so that it can be converted into free trading stock at a fraction of the market price creating millions of dollars of free trading stock for his small amount of debt. The following are some other examples of tickers that Gary B Wolff used to create millions of dollars of free trading stock out of debt owed to him for legal services:
- Ehouse Global Inc (EHOS) - Wolff was owed $12,000 for legal services provided taking the ticker public. That $12,000 was turned into 1,200,000 free trading shares which became 40,800,000 free trading shares after a 34:1 forward split.
- Interactive Health Network (IGRW) - Wolff was owed $50,000 for legal services provided taking the ticker public. That $50,000 was turned into 50,000,000 free trading shares between November 2009 - September 2010. IGRW was an exact mirror to AI Document Services Inc (AIDC) when it went public including some of the same seed shareholders and other insiders.
- Creative Edge Nutrition (FITX) - Wolff was owed $50,000 for legal services provided taking the ticker public. That $50,000 was turned into 50,000,000 free trading shares starting in 2009. FITX was an exact mirror to AI Document Services Inc and IGRW. Creative Edge Nutrition Inc (FITX) would do a share exchange with AI Document Services Inc (AIDC) in 2013.
- 3d Makerjet Inc (MRJT) - Wolff was owed $50,000 for legal services provided taking the ticker public. The ticker issued Wolff 1,200,000 for the first $12,000 of debt in 2011. The other $38,000 was satisfied/forgiven during a change of control that took place in 2014.
Other Gary B Wolff S-1 tickers that had links to AI Document Services Inc (AIDC) through the seed shareholders included Innocap Inc (INNO), High Performance Beverages Co (TBEV), and Cerebain Biotech Corp (CBBT).
In the cases of FITX and IGRW, JW Financial LLC was named as one of the third parties to receive a large chunk of the Gary B Wolff debt. JW Financial LLC is a Georgia entity controlled by J. Scott Watkins. Watkins and Wolff previously showed up together in TIA IV Inc which was a blank check company that never made it public. FITX also named First Trust Management as one of the third parties to receive a large chunk of the Gary B Wolff debt. First Trust Management is controlled by John Zukowski. John Zukowski is an executive manager involved with Clinton Greyling in Charms Investments Ltd. Clinton Greyling is the son of Leslie Greyling a career con artist that can be linked to the mob on wall street busts from the late 90s through his involvement in E-pawn.com. Charms Investments Ltd has a who's who of dirty attorneys and dirty tickers that can be linked to the company.
The accountant used for nearly every Gary B Wolff ticker mentioned above including AI Document Services Inc (AIDC) was Li & Company PC.
In 2012, the SEC suspended Gary B Wolff from practicing in front of the Commission because he was providing SEC legal services for SEC entities without a valid attorney's license. Wolff's license was suspended by the state of New York in 2010 because of past due fees and a delinquency in his required continuing legal education credits. The State of New York reinstated Gary B Wolff in 2013, but in June 2015, the SEC imposed additional sanctions on Wolff extending his suspension another 2 years because Wolff continued to provide legal services after his initial suspension by the SEC. All of Wolff's issues with the SEC only prevented him from providing legal services for public Issuers, it didn't prevent him from participating in the Issuers as a debt holder/shareholder which he obviously did.
Many of the above tickers became involved in the pot industry after going public and nearly all of them became message board pump type tickers, but none of them really saw any high profile paid promotions. Despite the absence of any big name stock promotions, the shares created by Gary B Wolff easily netting tens of millions of dollars in profits.
After going public
Everything remained unchanged for AIDC for the first 2 years after going public. Then in December of 2013 lots of things started to happen.
AIDC did a share exchange with Creative Edge Nutrition Inc (FITX) issuing the company 30,000,000 shares in exchange for the exclusive right to manufacture and sell the natural nutraceutical supplements of Chesapeake Nutraceuticals and Innovative Fulfillment. At the same time as the acquisition, the Cohen family resigned from all of their positions, spinning their operations out of the ticker returning 3,000,000 of the shares they controlled in the process.
Leonard Armenta, Jr of Creative Edge Nutrition Inc (FITX) became the new Chairman and CEO of AIDC. Paul Freet became the new CTO and director. AIDC moved its corporate address to the state of Georgia.
In 2009, Creative Edge Nutrition Inc did a share exchange agreement with Laufer Bridge Enterprises Inc (LBGE) leading to that ticker eventually becoming Creative Edge Nutrition Inc (FITX) in 2012. It was right after Creative Edge Nutrition Inc did its share exchange with LBGE that Gary B Wolff started converting his $50,000 debt note in that ticker. Between August 2010 - October 2010 alone, Wolff dumped over 15 million shares of FITX into the market.
With AIDC the same thing happened. Right after Creative Edge Nutrition Inc (FITX) did its share exchange agreement with AIDH, Gary B Wolff started converting his $42,000 debt Note. In the case of AIDC, however, none of those shares ever hit that market and as of last week, all 42,000,000 shares remain ready and waiting to be dumped.
In August of 2015, without any explanation, AIDC apparently discontinued its business association with FITX and entered into a new acquisition agreement with Asante Restaurant LLC.
Asante Restaurant LLC
In August of 2015, Creative Edge Nutrition Inc magically disappeared from the AIDC filings and a new acquisition was done with Asante Restaurant LLC.
In exchange for 35,330,000 shares of stock, AIDC acquired control of Diaspora Foods International, L.L.C. and Asante Restaurant LLC - both of which are controlled by Marvin Woods. The 35,300,000 shares of stock were not newly created shares of stock, they were taken from FITX (their 30,000,000 shares they had previously owned) and from Mark Cohen (5,300,000 shares he previously owned). Leonard Armenta Jr and Paul Freet resigned and Marvin Woods became the new Chairman and CEO of AIDC.
Marvin Woods can be considered a little bit of a Celebrity Chef having cooked for Oprah Winfrey and for Michelle Obama's Let's Move event and because of his many TV appearances including the Today Show, Home Plate, and Casting Call.
Asante Restaurant LLC was incorporated in Georgia in 2014 and is a wholly owned subsidiary of Diaspora Foods International, L.L.C. which was incorporated in Georgia in 2008. The company website can be seen here. Currently business operations consist of one restaurant in Atlanta which is conveniently called Asante Restaurant. The restaurant got off to a slow start in 2014, but has seen revenues grow to $409,736 during the first 6 months of 2015. The problem is that after payroll and expenses the restaurant actually lost $174,095 during that same span. Between the costs of getting operations rolling and keeping up with expenses, Diaspora Foods International LLC has had to borrow $459,850 at 25% interest from Enoyloh LLC. The loan is secured by all of Diaspora Foods International LLC's inventory and personally guaranteed by Marvin Woods. The debt starts to come due in 2016 at which time if it isn't paid back it can be converted into AIDC stock. The loan agreement with Enoyloh LLC has no signatory listed and its Wyoming business entity shows no officers listed. The AIDC filings only say that Enoyloh LLC is controlled by a minority shareholder of AIDC. They seem to be making a conscious effort to keep whoever controls Enoyloh LLC anonymous. Though Enoyloh LLC doesn't list any officers, following the address of the corporation at 3322 Forest Vista Dr. Dacula, GA 30019 does lead us to Joel Stohlman and one document found at the end of the exhibits for the amended acquisition 8k uses Stohlman's long time business partner, Ricardo Richardson (aka R. A. Richardson), to represent Enoyloh LLC.
Joel Shohlman shows up in some other publicly traded companies including Rotate Black Inc (ROBK) back in 2004 when it was Sun Rayz Beverage Inc and ProConcept Marketing Group Inc (PRMK) which he took over in 2008 with his business partner Reid Stone. The most important tickers that Joel Stohlman has been involved in, however, are Interactive Health Network (IGRW) and Creative Edge Nutrition Inc (FITX) both of which included Gary B Wolff and JW Financial LLC. Mr. Stohlman was part of the group of investors along with Ricardo Richardson that took over the HPC POS System Corp shell in 2009 through an acquisition agreement involving Mohan Corporation shortly after it went public. Stohlman then became a paid consultant for the ticker. HPC POS System Corp eventually morphed into IGRW. It was after that acquisition agreement that Mr. Wolff started to convert the $50,000 in debt owed to him through legal fees he accumulated in the going public process. Mr. Stohlman was also the original control person and CEO of Creative Edge Nutrition Inc when it merged into Laufer Bridge (LBGE) in 2009. It was right after Stohlman merged his company into LBGE that Wolff started converting his $50,000 in debt owed to him through legal fees he accumulated in the going public process. Ricardo Richardson also became an LBGE/FITX insider after Shohlman took over the ticker. Stohlman served as the CEO of FITX until 2011 then stepped down remaining involved as a consultant. It obviously is no coincidence that Joel Stohlman and Ricardo Richardson are now involved in AIDC which is yet another ticker that was set up as an insider enrichment scam using debt created by Gary B Wolff in the going public process.
Providing the legal work for AIDC during the Asante acquisition agreement was Jody M Walker. Jody Walker can be linked to dozens of paid promotion tickers including RNBI, ALKM, VHUB, RIHT, RJDG, PVTA, KRED, NAMG, DMHI, and many others. Ms. Walker spent some time arguing back in forth with the SEC in comment letters about whether or not AIDC was a shell company just prior to the acquisition of Disapora Foods International LLC and its wholly owned subsidiary Asante Restaurant LLC. The SEC argued that AIDC had only nominal operations prior to the acquisition and wanted AIDC to amend its 8K to include information that would be contained in a Form 10 while Ms. Walker argued that it had more than nominal operations through its agreement with Creative Edge Nutrition Inc but were limited to only nominal revenues because of issues with distribution. In the end the SEC accepted Ms. Walker's explanation but reminded her that it doesn't clear the company from further scrutiny in the future.
It appears that the controversy surrounding the Asante acquisition is now resolved and things are good to go for AIDC. We can only assume that they are in the process now of trying to get a name change approved by FINRA to better reflect their new operations.
Current Share Structure
Not surprisingly, AIDC has a lot of inconsistencies in its filings as far as the share structure goes. From financial report to financial report the numbers change making it hard to zero in on the exact share ownership numbers. What we do know for sure is that AIDC issued 42,000,000 shares at $.001/share for $42,000 worth of debt that was created through legal fees when Gary B Wolff helped take the ticker public. We'll do our best to accurately sort out the rest of the share ownership numbers in the chart below:
Authorized -99,000,000 shares
Outstanding - 87,030,000 shares (as of November 15, 2015)
Diaspora Foods International, L.L.C. shareholders - 35,330,000 shares (restricted)
Mark Cohen - 900,000 shares (restricted)
Leonard K Armento - 250,000 shares (restricted)
Unnamed service providers - 7,860,000 shares (restricted) issued for services
Private placement shareholders - 170,000 shares (restricted) sold at $.20/share
Gary B Wolff and his associates - 42,000,000 shares (free trading) issued at $.001/share
Seed shareholders - 520,000 shares (free trading) costing $.001/share
It is obvious that AIDC is really just another ticker set up as an insider enrichment scheme using debt created by Gary B Wolff when he helped take the ticker public very very much like FITX and IGRW. Thanks to that Gary B Wolff debt, AIDC now has 42,000,000 free trading shares ready to be sold into the market. AIDC seems to be following the FITX and IGRW playbooks to a tee including using other Wolff associates like Joel Stohlman, Ricardo Richardson, and JW Financial LLC/J Scott Watkins.
It took some time but it seems like things are finally all sorted out with the Asante Restaurant acquisition making AIDC ready to become active. The ticker is just missing a name change to reflect the latest acquisition. With the sudden flurry of first ever volume for AIDC last week it is obvious that the AIDC insiders are not waiting on any name change to get things rolling.
FITX and IGRW didn't see any big name paid promotions, but both tickers were heavily promoted using low level market awareness and message board/social media pumping. History tells us that AIDC will probably see a lot of lower level market awareness and message board/social media pumping in its future too, but for now we have to consider all possibilities that the big early volume creates so we'll watch the ticker closely in the coming days to see what if anything transpires from that early volume. We'll keep PSS members updated on any noteworthy events surrounding AIDC in the comment section of this report.