28 Jan Alkame Holdings Inc (PINSD) – updated research report – now ALKM
Since getting a 1:3 reverse split approved earlier this month, Alkame Holdings Inc (PINSD) has been on a nice steady price climb from $.48/share to $.63/share with volume increasing over the past 2 days.
The 1:3 reverse split came just a few months after Alkame Holdings Inc did a 100:1 forward split. It was almost as if originally the shell was going to get used for some kind of major email spam promotion perhaps led by Awesome Penny Stocks or Victory Mark and then the collapse of APS and VM caused the insiders to shift the game plan to a newsletter type of promotion instead. Because we still consider PINSD a future paid promotion ticker and the ticker will carry the 'D' for the reverse split for another week possibly meaning another week of slowly climbing in price, I decided to update our Alkame Holdings Inc research report.
We originally did a research report for Alkame Holdings Inc on February 28, 2013. We updated that report on May 16, 2013. We updated that report again on June 30, 2013. That makes this the 4th edition of our Alkame Holdings Inc report (the most for any ticker to date).
The following is our previous research followed by all updates since June 30, 2013:
Pinacle Enterprises Inc (PINS) announced on June 28, 2013 that they had completed the acquisition of Alkame Water Inc. We knew this acquisition would happen and had written two previous reports about PINS found here and here. At this point in time, PINS appeared to be set-up for a specific type of promotion and that promotion could happen some time before the end of the summer.
PINS has gone through many of the most common stages of a ticker taken public to be used for a future paid promotion. It has foreign seed shareholders, a foreign sole officer/director, no active business operations when it went public, an attorney that can be linked to several other past pump&dump plays, and a huge forward split while all the shares are still insider owned.
Pinacle Enterprise Inc was incorporated as a Nevada business entity on April 19, 2010.
The CEO, president, treasurer, and director at the time of incorporation was Mikhail Kats of Germany.
The secretary was Olga Kats, who is the daughter of Mikhail Katz.
Mikhail Kats received 3,500,000 shares for $3,500 ($.001/share).
Olga Kats received 70,000 shares for $70 ($.001/share).
1,730,000 shares were sold to a group of 23 seed share holders for between $.001/share and $.02/share. Except for the wife of Mikhail Kats, the other 25 seed shareholders all had Russian names.
Mikhail Kats went back to school for 1 year in 2005 to complete a qualifying course to be a technical economist. In 2007, Mikhail Kats continued his education taking courses in technical design skill. Following his schooling, Mikhail Kats started working as an Engineer constructor at a privately owned enterprise, Grune Maschinen in Germany.
Olga Kats studied at Leipzig University from 2004 - 2008. She also spent some time working doing Public and Investor Relations for Syngas International Corp (SYNI) from 2006 - 2007. In 2008, she took a position as a sales executive at Marcus Evans. Syngas International Corp now trades as Energy Quest Inc (EQST).
On June 21, 2011, an S-1 was filed to take Pinacle Enterprise Inc public.
The business plan for Pinacle Enterprise Inc was to to specialize in architectural design, architectural animation, 3D modeling as well as CAD drafting and conversion services. Pinacle Enterprises Inc even had a website set up found here.
Pinacle Enterprise Inc had $0 in revenues and $16,006 in cash when the S-1 was filed.
The attorney helping with the S-1 filing was Jody Walker. Jody Walker is on our list of attorneys to follow for a future paid promotion. She has a long list of p&d tickers linked to her. Some Jody Walker tickers include PVTA, TWDL, MBLV, SUNB, PMCM, and DMHI.
The accountant used was Silberstein Ulgar, PLLC.
The website registration is interesting. It shows information for Mikhail Kats, but the email address used takes us down an interest rabbit hole.
The email address [email protected] belongs to Oxana Avdasseva. Oxana Avdasseva has links to Vancouver, Russia, and Chile. This person also shows up in some SEC filings. Oxana Avdasseva aka Advasseva aka Avdaseva was a director for Park Place Energy Corp (PKPL) and a pre-IPO shareholder in Mantra Venture Group Ltd (MVTG), Novori Inc (BCME), and Lexington Energy Services Inc (LXES).
Oxana Avdasseva is the daughter of Elena Avdasseva who was also a Park Place owner and as David Baines reported, worked for Scott Lower. From the David Baines article focused on Russian nominee officers being used in penny stocks:
"Elena Advasseva works as a stockbroker at Global Securities in Vancouver. Until recently, she worked as an assistant to Global broker Scott Lower (who is also a certified general accountant).
Advasseva and Lower -- along with a private company called American Dream Holdings, run by Vancouver certified management accountant Aarif Jamani and Vancouver realtor Anish Somani -- were seed shareholders of Novori Inc., a Surrey- based online jewelry retailer that, with Penny Green's assistance, was ushered onto the bulletin board in 2005.
Last October, Vancouver police named Lower, Jamani and another Vancouver promoter, Bob Vokovich, in search warrant information in an alleged stock bribery case. They are alleged to have provided secret commissions on three separate occasions to an undercover FBI agent in New York.
No charges have been laid, but Lower is no longer working as a stockbroker, Jamani has allowed his membership in the CMA association to lapse, and Lower is under investigation by the CGA association.
This daisy chain of interconnections keeps extending and expanding. What we have is a tightly-knit group of people, all with Russian and Ukrainian connections and strong links to Vancouver, helping to bring a swarm of sham stock deals and ugly stock promotions onto the OTC Bulletin Board in the United States"
Kerrie McHugh, the spouse of Scott Lower, was a seed shareholder in Manta Venture Group Ltd with Oxana Avdasseva.
This research report which talks about Oxana Avdasseva also focuses on Faiyaz Dean who now runs Dean Law Corp and Penny Green (aka Penelope Olga Green) of the Bacchus Law Group Corporate and Securities Law (the former employer of Faiyaz Dean) and how they commonly use Russian seed shareholders with their shells. Here and here are two more articles that criticize the practices of Mr. Dean.
What is interesting is that the company that Olga Kats did IR work for, Syngas International Corp (SYNI) nka Energy Quest Inc was using attorney Penny Green. It was probably during that time that arrangements were made to have Olga Kats and her father help take a shell public using a bunch of Russian nominee seed shareholders.
Perhaps we just found a link to who the real insiders are that may be planning on using the PINS shell for insider enrichment in the future.
After Going Public
Pinacle Enterprise Inc acted like a typical future p&d ticker after going public. No real progress was made with the business plan. They did manage to purchase some computer software valued at $1,180, but it didn't get much use.
By the summer of 2012 all the cash was used up and PINS started borrowing money from an anonymous shareholder. At one point, PINS owed this anonymous shareholder $62,986, but as part of the acquisition agreement with Alkame Water Inc that debt was forgiven.
On February 19, 2013, Mikhail Kats filed an amendment with the Nevada SOS to do a 100:1 forward split and to raise the authorized share count to 900,000,000.
On that same day an 8K was also filed for the same event.
New Share Count
Following the 100:1 forward split the new share count will look as follows:
Authorized - 900,000,000 shares
Outstanding - 530,000,000 shares
Mikhail Kats - 350,000,000 shares
Seed Shareholders - 180,000,000 shares (free trading) purchased between $.0001/share and $.0002/share
Predicting what would happen next
It was at this point that we realized that there was no doubt that PINS was being set up for a future paid promotion. With the very large forward split, the huge free trading share count, the link to Germany, the link to Oxana Avdasseva, and Jody Walker as legal counsel, PINS screams out future email spam promotion. PINS reminds us of another entity with 180,000,000 free trading shares linked to Germany that start getting promoted by Victory Mark right before we did our first PINS research report. That Luis Carrillo entity was Red Giant Entertainment (REDG). Jody Walker, the PINS attorney, just so happened to be the attorney that helped draft the share exchange for the other Luis Carrillo/Victory Mark ticker with recent major dumping action, DMHI.
Knowing that all that was left would be a change in control combined with a change in business operations and possibly a name/symbol change before a future paid promotion could start we added PINS our list of tickers to watch for a future paid promotion. on February 28, 2013.
Change in Control
On May 3, 2013 after the 100:1 forward split cleared, PINS filed an 8k for a change in control.
Mikhail Kats agreed to transfer his 350,000,000 shares to Robert Eakle for $20,000 ($.000057/share).
Mikhail Kats resigned from all of his officer/director positions. Robert Eakle replaced him in all positions.
Mikhail Kats also agreed to forgive the PINS shell for all liabilities owed to him in exchange, Mikhail Kats got to take all of the original assets and liabilities with him.
More about Robert Kemper Eakle
Robert Eakle is from Las Vegas. He formed Alkame Water Inc as a Nevada business entity on March 1, 2012.
Prior to that, in 2008, Mr. Eakle formed US Beverages Service, LLC, and was the owner/manager of that company.
Change in Business Operations
At the same time that PINS announced their change in control they said the following about their new business operations:
"We intend to pursue the sale and distribution of the Alkame brand of bottled waters, as well as other various applications for the water treatment technology"
It seems pretty obvious by that statement that Robert Eakle was planning on merging his new Alkame Water Inc business into the PINS shell.
The recently filed 10K elaborates even more.
"We intend to pursue the sale and distribution of the Alkame brand of bottled waters, as well as other various applications for the water treatment technology. We intent to enter into an agreement to acquire this new business in the coming weeks"
So Robert Eakle definitely was planning on doing an acquisition which we know would be Alkame Water Inc.
PINS acquires Alkame Water Inc
As expected PINS ended up acquiring Alkame Water Inc.
On June 24, 2013, PINS formed a new Nevada business entity called Alkame Acquisition Corp as a wholly owned subsidiary for the mere purpose of using that wholly owned subsidiary to merge it with Alkame Water Inc making Alkame Water Inc a wholly owned subsidiary of Pinacle Enterprises Inc (PINS).
From the Nevada business entity filing, other officers/directors for Alkame Water Inc include Jeff Crandall, Keith Fuqua, and Charlie Grask.
On June 26, 2013, the merging of the two entities (Alkame Acquisition Corp and Alkame Water Inc) took place officially making Alkame Water Inc a wholly owned subsidiary of Pinacle Enterprises Inc.
On June 26, 2013, PINS also filed an 8K disclosing the terms of the merger as well as the financial situation and business plan for Alkame Water Inc.
For the acquisition of Alkame Water Inc, 100,000,000 newly created PINS shares were issued to the Alkame Water Inc shareholders. We are told that Robert Eakle received 64,800,000 of those newly issued shares to go with his 350,000,000 shares that he already owned giving him 414,800,000 shares. We are not told who got the other 45,200,000 newly issued PINS shares.
The new share count now looks as follows:
Authorized - 900,000,000 shares
Outstanding - 630,000,000 shares
Robert Eakle - 414,800,000 shares
Other Alkame Water Inc shareholders - 45,200,000 shares
PINS Seed Shareholders - 180,000,000 shares (free trading) costing between $.0001/share - $.0002/share
Alkame Water Inc comes with a distribution agreement with Xtreme Technologies Inc (Jeffrey Crandall) from June of 2012. Crandall and fellow Xtreme Technologies Inc employee, Keith Fuqua, are both directors for Alkame Water Inc making this an arm's length agreement. The biggest problem with the agreement, however, is not that it is an arm's length agreement. The biggest problem is that Xtreme Technologies Inc went out of business in 2010, 2 years before this agreement was signed. The Idaho business entity was reinstated on April 15, 2013, but that doesn't change the fact that the entity doesn't have any active business operations. Jeffrey Crandall who now only works exclusively as an attorney according to his LinkedIn page, even stops listing Xtreme Technologies Inc as an active business in 2010.
Despite having an arm's length distribution agreement with a dead company, to date Alkame Water Inc has yet to sell a single bottle of water. The balance sheet provided as an exhibit for the merger 8K shows Alkame Water Inc with the following financial numbers:
- Cash - $501,297 ($500,000 was provided after March 31, 2013 in the form of a debt Note)
- Inventory - $0
- Debt Notes - $570,000 ($500,000 of which was provided by an unrelated third party after March 31, 2013 the other $70,000 was issued to a non-related party of the Company for consulting fees and cash advances between December 31, 2012 and March 31, 2013.
- Revenues - $0
So right before signing the merger agreement with PINS, Alkame Water Inc issues an anonymous $500,000 debt Note. There is a good chance that if there is a paid promotion for PINS that this $500,000 debt Note will come into play.
In the 8K, Alkame Water Inc discloses the following:
"We have not earned any revenues since our inception. We are presently in the development stage of our business and we can provide no assurance that we will develop viable products or that we will be to enter into commercial production and generate sufficient sales"
Aside from the arm's length distribution agreement with company directory, Jeff Crandall, Alkame Water claims to be in negotiations to acquire the patents on the proprietary process that they believe is the most technologically advanced in water treatment systems for complete hydration.
If they can secure the patents on the proprietary process and they can afford the manufacturing costs, Alkame Water Inc plans on selling the following products:
More about Alkame Water Inc
The Alkame Water Inc website can be found here.
The Alkame Water Inc facebook page can be found here.
Our Conclusion From the Summer of 2013
Pinacle Enterprises Inc does not look like it will generate a lot of revenues from its new Alkame Water business any time soon. In our opinion future revenues are not the main priority of PINS. PINS was taken public to be used for a future paid promotion and now all the pieces are in place for the paid promotion to kick off whenever the promoter/insider feel fit. It is possible that PINS could go through a name and symbol change, but I'm not really expecting that since PINS chose to merge Alkame Water Inc with a wholly owned subsidiary instead of into the main entity.
With 180,000,000 free trading shares, an anonymous debt Note, and links to Germany it seems obvious what sort of promotion we should expect. PINS is set up for an email spam campaign. The current price of $.25/share gives PINS a market cap of $157,500,000 which is absolutely ridiculous. Email spam campaigns run on a ticker with this type of share structure have typically been starting in the $.06/range - $.12/share range. I expect we'll see the PINS share price dropped significantly from the current price level right before the promotion kicks off. PINS remains on our list of tickers to watch for a future paid promotion.
Shift in Share Structure #1 - preferred share exchange
On July 10, 2013, PINS authorized 20,000,000 preferred shares. Robert Eakle then immediately exchanged 250,000,000 of his common shares for 10,000,000 preferred shares.
The new share count looked as follows:
Authorized Commons - 900,000,000 shares
Authorized Preferred - 20,000,000 shares
Outstanding Commons - 380,000,000 shares
Outstanding Preferred - 10,000,000 shares
Robert Eakle - 174,800,000 common shares, 10,000,000 preferred shares
Other Alkame Water Inc shareholders - 45,200,000 shares
PINS Seed Shareholders - 180,000,000 shares (free trading) purchased at between $.0001/share and $.0002/share
A new insider with a dirty past is added to the mix
On July 29, 2013, PINS appointed Erwin Vahlsing as Chief Financial Advisor
Erwin Vahlsing has been involved in several very dirty past penny stocks including SUGO, KEPI (suspended), and ICOA.
PINS signs another agreement with Xtreme Technologies Inc
On September 9, 2013, PINS signed a new agreement this time to acquire Xtreme Technologies Inc in exchange for the assumption of $575,000 in debt and the issuance of $1,425,000 in stock to Xtreme Technologies Inc.
Xtreme Technologies Inc does business as Advanced Hydration Technologies and Bio2 PetLabs focusing on bottled water for pets
The acquisition was expected to close before the end of January 2014.
On January 8, 2014, PINS executed a 1:3 reverse split.
According to the OTC markets website, this reduced the outstanding share count from 654,613,992 to 218,204,664 shares.
That means that some time between December 13, 2013 and January 8, 2014, PINS had issued an additional 254,634,107 shares. We really get no explanation what all the shares were issued for. We know PINS had committed to giving Xtreme Technologies Inc an additional $1,425,000 worth of stock and PINS was over $1,000,000 in debt Notes on its books thanks to Xtreme Technologies Inc. We can probably assume the big jump in the outstanding share count is related to some of this.
The reverse split made the new outstanding share count look at follows (based on information in the filings):
Authorized - 900,000,000 shares
Outstanding - 218,204,664 shares
Robert Eakle - 58,266,667 common shares, 10,000,000 preferred shares
Other Alkame Water Inc shareholders - 22,844,167 shares
Anonymous Analysts - 1,166,667 shares
Anonymous Consultants - 1,533,333 shares
Unknown - 74,393,830 shares
PINS Seed Shareholders - 60,000,000 shares (free trading) purchased at between $.0001/share and $.0002/share
According to the Alkame Holdings Inc website, PINS already has several celebrities already drinking their bottled water including Patrick Dempsey (actor), Robert Downey Jr (actor), Jennifer Glava (Miss California), Sean Douglas (Actor), Ray Bones (pro skater), Danny Green (NBA player), Jennifer Dawn (actress), Robbie Gould (NFL Player), and several others. See the complete list here.
That is especially impressive considering that Alkame Holdings Inc only had $17,274 in revenues ever by September 30, 2013.
The photos of celebrities holding their bottled water will no doubt be a nice selling point during a future paid promotion.
In the past two weeks PINS has announced two distribution agreements. On January 13, 2014 it announced a distribution agreement with Avanzar Sales and Distribution, LLC., a California-based beverage focused distribution and consulting company. On January 22, 2014, it announced a distribution agreement with Nature's Best, the largest privately owned wholesaler-distributor of health and natural food products in the United States.
PINS is more than ready for a paid promotion now. All that is left is for the reverse split to clear which should happen within the next week. Once that clears, Alkame Holdings Inc will get a new trading symbol. While Alkame Holdings Inc continues to trade as PINSD it looks like it could continue to slowly climb despite the fact that with 60,000,000 free trading shares the ticker is already a bit over priced for the average paid promotion.
We expect that PINS will probably see a paid promotion some time before the end of February and that it could end up starting in the $.50/share to $.75/share range unless the price is suddenly dipped right before the promotion officially starts.