01 Jul DIMI Research Report
This is a long post so I'm sorry if I overload anybody with too much information, but there was a lot to go through and sort out with DIMI.
A walk through the filings
Some time between September of 2008 and May of 2009, Andrew Godfrey and Jason Smart took over control of the DIMI shell. At this time the shell was still called First Quantum Ventures Inc. We are given no explanation as to how or when the change of control took place because for about a 12 month period DIMI didn't do any SEC filings.
Andrew Godfrey has come up in some of my past research because of his connection to some very unsavory penny stock individuals. Godfrey runs a business called IPC Corporate Services with Robert Bandfield that registers businesses off shore for individuals so that they can remain anonymous. Many of those businesses often end up being used for illegal dirty debt arrangements with stinky pink sheet companies.
Here is one of my past posts that mention his name.
Godfrey's first filing was an 8K announcing that the DIMI shell was going to go through with a pre-approved 1:100 reverse split. The 1:100 reverse split was back dated to February 25, 2008.
The 1:100 reverse split took the outstanding share count down to 340,304 of which Jason Smart owned 250,000.
Jason Smart and Andrew Godfrey have a history together prior to DIMI.
The first financial statement after Godfrey took over showed a company with no assets, no revenues, and no employees. Literally just a shell carrying debts.
Godfrey went back and did the missing financial filings for the periods ending 6/30/08, 9/30/08, and 12/31/08.
The filings showed some disturbing debt Note conversions.
Between June 30, 2007 and June 30, 2008, 10,000,328 shares were issued towards debt raising the outstanding share count to 10,340,632. According to the 10K filed by Godfrey those debt conversions are done post-reverse split:
The 10K doesn't disclose who the 10,340,632 shares went to or how much debt was paid down (we will come to find out later in this post that they probably went to Ramon Pagan). Looking at the balance sheet we see that $24,549 in convertible debts were added to the balance sheet during the year. Since $14,495 in convertible debts existed on June 30, 2007 that means the additional $24,549 in new convertible debt Notes would bring the total up to $39,044.
The balance sheet shows $36,069 in convertible debt Notes on June 30, 2008 meaning that the issuance of 10,000,328 shares paid off only $2,975 in debt.
That means that the debt Note holder got their shares at $.0003/share.
Another $2,697 in convertible debt Notes were issued during during the 3 months ending September 30, 2008 and another 3,594,806 new shares were issued towards past convertible debt Notes (bringing the outstanding share count up to 13,935,438). Those 3,594,806 shares paid off $1,074 in past convertible debt Notes according to the math. A conversion ratio of $.0003/share again. Same exact ratio as before. Again no disclosure is given in the 10Q to show who owns the debt Notes or even how many shares were issued towards old debt Notes. You have to be willing to do the math from the balance sheet to figure it out. And again according to this filing those are post 1:100 reverse split shares.
The next 10Q filing for the period ending December 31, 2008 once again showed an increase in convertible debt Notes. The balance sheet tells us that $4,221 in new convertible debt Notes were issued during the period between September 30, 2008 and December 31, 2008 bringing the convertible debt Note total up to $40,736. No new shares were issued towards debt during this period. The outstanding share count remained at 13,935,438.
Now here is where things get really weird.
The 10Q for the period ending March 31, 2009 suddenly shows the outstanding share count back down to 340,632.
It is like those 13,594,806 shares issued towards $4,049 in convertible debt Notes at $.0003/share (probably to Ramon Pagan) never happened. Those 13,594,806 shares just disappeared into thin air (or perhaps some offshore entity). The balance sheet still reflected the debt having been paid off, but the shares were erased from the outstanding share count numbers. Very dirty stuff. None of the previous financial filings were ever restated. No explanation of the disappearance of those shares were even given in the filings.
More new convertible debt Notes were issued during this quarter (again the recipient is not disclosed) bringing the convertible debt Note total up to $44,949.
DIMI was still just a shell with no assets, no revenues, and no employees.
In August of 2009, the accountant was dismissed which is probably a smart move considering the questionable filings done under the old accountant (Lawrence Scharfman, CPA). Turns out that Lawrence Scharfman, CPA had his certification taken away from him by the Public Companies Accounting Oversight Board (PCAOB).
By the 10Q for the period ending June 30, 2009, the convertible debt Notes had risen to $57,156. The fudged outstanding share count was still 340,632. And the DIMI shell was just that, still a shell with no assets, no revenues, and no employees.
We finally get a little bit of disclosure about the mysterious debt Note holder.
"The Company has entered into a convertible line of credit payable, which bears a 10% interest rate, a maturity date of December 31, 2011 and is unsecured. The line allows for draws up to $100,000, of which the Company has drawn $57,156. It is convertible at the option of the holder at the lesser of 60% of the 3 day prior closing price, $0.01 or the price shares are sold to a third party"
Interesting that in the past the debt Note holder got a much better conversion ratio at $.0003/share. Of course despite proof still existing in the earlier filings, the later filings like to pretend that never happened.
The convertible debt Note continued to grow over the next two quarters, while the outstanding share count remained the same:
September 30, 2009 - convertible debt Note = $77,156, Interest owed = $11,785, O/S - 340,632
December 30, 2009 - convertible debt Note = $77,156, Interest owed = $13,730, O/S = 340,632
Then something else very fishy happened. In March of 2010, 20,000,000 shares were issued for services valued at $200,000 at $.01/share.
The DIMI shell had no employees at this time. The DIMI shell had never disclosed any consultant agreements. The DIMI shell had one officer = Andrew Godrey.
So I find extremely disturbing that the 20,000,000 shares ended up in an offshore account under the name Kesgood Company, Inc. Which according to the 10K for the period ending June 30, 2010, is not an officer or director of the company excluding the offshore entity king himself, Andrew Godfrey, from being the owner of those shares. The DIMI filings do not disclose who actually owns those shares, but they give us an address for the entity:
By March 31, 2010 the convertible debt Note had grown to $97,156 with Interest owed up to $15,753. The Outstanding share count was now 20,340,632.
Then on May 4, 2010, $90,886 of the $112,900 owned in convertible debt Notes and interest was paid off with the issuance of 9,088,600 shares after some formalities took place with the Seminole County courts. A conversion ratio of $.01/share.
Here is that court docket:
So we now know the revolving convertible debt Note belongs to National Business Investors Inc.
Interesting that National Business Investors Inc which is now a defunct Florida entity shares the same address as First Quantum Ventures, Inc (nka DIMI).
National Business Investors Inc was an entity controlled by Ramon Pagan.
Ramon Pagan current runs a few active Florida Business Entities:
Single Source Investment Group, Inc
Royal Palm Creative Solutions, Inc
Ponce De Leon Consulting Group, Inc
(all of which share the same address as First Quantum Ventures Inc in 2010):
Ramon Pagan is currently the CEO of Medical Makeover Corporation of America (MMAM)
Prior to Ramon Pagan taking over as the CEO of Medical Makeover Corporation of America, Jason Smart was the CEO
Prior to becoming the new CEO of MMAM, Ramon Pagan was a director of MMAM and a long time large shareholder of MMAM through his entity, Ponce de Leon Consulting Group, Inc.
Back to DIMI
So the court proceedings were just a formality for Jason Smart and Andrew Godfrey to pay their good buddy, Ramon Pagan, discounted shares towards his convertible debt Note. The DIMI shell went 2 years without conducting any business operations so their only operations amounted to borrowing money from Ramon Pagan so they could pay in back later with really cheap shares helping him to make a huge profit.
The next quarterly report for the period ending September 30, 2010, showed a new convertible debt Note balance of $30,000 and interest owed of $4,026. The outstanding share count was now 29,429,232.
On October 15, 2010, DIMI had another accountant resign because they had their certification revoked by the PCAOB. Larry O' Donnell was dismissed and Malcolm Pollard Inc was brought in as the new auditor.
The December 31, 2010 quarterly report showed that the debts had grown. The convertible debt Note was now $44,500 and the interest owed was now $4,964. The outstanding share count remained unchanged at 29,429,232.
The March 31, 2011 quarterly report showed that the debts continued to grow. The convertible debt Note was now $50,000 and the interest owed was now $6,124. The outstanding share count still remained unchanged at 29,429,232.
The September 30, 2011 quarterly report showed that the debts continued to grow. The convertible debt Note was now at $55,995 and the interest owed was now $8,822. The outstanding share count remained at 29,429,232.
On October 27, 2011, the First Quantum Ventures Inc shell entered into a share exchange agreement with DiMi Telematics, Inc. In exchange for all of the outstanding shares of Dimi Telematics, Inc, the Dimi Telematics, Inc shareholders would receive 87,450,000 newly issued shares of First Quantum Ventures, Inc.
Those shares were divided up as follows:
Roberto Fata - 12,000,000 shares
Barry Tenzer - 10,800,000 shares
Lyle Hauser - 60,960,000 shares
Hal Cook - 300,000 shares
Tomark Supply Inc - 600,000 shares
World-Wide Auric International - 600,000 shares
Peter Thompson - 150,000 shares
EM Squared Management Services - 600,000 shares
Anthony Ivankovich - 1,200,000 shares
Paul Kaplan - 120,000 shares
Roger Mouallem - 120,000 shares
The share exchange agreement also called for 15,000,000 of the 20,000,000 shares owned by the anonymous Bahamas entity, Kesgood Company, Inc, to be cancelled.
That made the new outstanding share count 101,870,232.
The share exchange agreement also allowed for 12,975,000 Share Warrants (12,487,500 of which can be exercised at $.10/share and 487,500 of which can be exercised at $.15/share any time before September 30, 2015) to be issued:
Roberto Fata - 12,000,000 warrants
Peter Thompson - 75,000 warrants
EM Squared Management Services - 300,000 warrants
Anthony Ivankovich - 600,000 warrants
Andrew Godfrey stepped down. Barry Tenzer became the new President, CEO, CFO, and director, and Roberto Fata became the new director, and Executive VP of Business Operations.
As a final stipulation for the agreement, DiMi Telematics Inc announced a future 2:1 forward split.
The financial statements for DIMI for the period ending November 30, 2011, showed a company with a little more cash ($262,663), less debts ($7,498), but still no revenues.
According to the most recent 10Q for the period ending February 29, 2012, DIMI sold 5,050,000 shares of common stock during the quarter for proceeds of $815,000. That's a rate of $.16/share. As of February 29, 2012 those shares remained unissued.
That brought the cash proceeds up to $950,695. The company still showed no revenues.
In March of 2012, the name of the shell was changed to DiMi Telematics International Inc and the trading symbol was changed to DIMI.
The 2:1 forward split would come later in May of 2012.
The new share count looked something like this based on the April 13, 2012 count:
Roberto Fata - 24,000,000 shares
Barry Tenzer - 21,600,000 shares
Lyle Hauser - 121,820,000 shares
Hal Cook - 600,000 shares
Tomark Supply Inc - 1,200,000 shares
World-Wide Auric International - 1,200,000 shares
Peter Thompson - 300,000 shares
EM Squared Management Services - 1,200,000 shares
Anthony Ivankovich - 2,400,000 shares
Paul Kaplan - 240,000 shares
Roger Mouallem - 240,000 shares
Jason Smart - 500,000 shares (assuming they weren't sold yet)
Ramon Pagan - 18,177,200 shares (assuming they weren't sold yet)
Kesgood Company Inc - 10,000,000 shares (assuming they weren't sold yet)
Other shares - 180,608
Capital Investors - 10,100,000 owed shares
We aren't told how the outstanding share count grew from 203,740,464 on April 13, 2012 (post forward split) to 427,716,928 on June 12, 2012.
We come to find out that Lyle Hauser had his holdings increased from 121,820,000 to 243,840,000 shares according to the share exchange agreement he signed to transfer 100,000,000 common shares into 1,000 Series A Preferred shares.
The press release for the event falsely called the share exchange a 'share retirement'
Funny that if the company doesn't start making some revenues ($.01 earning per share), Hauser loses his preferred shares and gets his 100,000,000 common shares back.
I noticed on the PR that Dodi Handy is the IR for DIMI. She was IR for AWSR which was the victim or lucky recepient of an AwesomePennyStocks fake out.
That means that Lyle Hauser had increased his holdings by 122,020,000 shares. That raises the total from 203,740,464 to 325,760,464 and accounts for all but 101,956,464 of the new shares.
With the transfer of those 100,000,000 shares owned by Lyle Hauser, the outstanding share count comes down to 327,716,928.
If we so some math we can probably come up with those other 101,956,464 shares.
The capital investors must have gotten their 10,100,000 shares.
The share warrants must have been exercised before the split making 25,950,000 shares.
But that still leaves 65,906,464 shares unexplained.
I guess we'll have to wait for the next financial report to help explain all of the new shares. Maybe other officers also got share increases. Maybe more shares were sold for capital.
So where does this leave us?
We know for a fact that there are a lot of free trading shares out there ready to be sold.
The original DIMI shareholders that received shares in the share exchange that are not officers may be looking to sell their shares.
The capital investors that got 10,1000,000 shares at $.08/share will be looking to sell their shares.
Ramon Pagan who got his shares at $.01/share pre-forward split surely has some more shares to sell based on the volume history.
Kesgood Company Inc who got shares for free in exchange for unexplained services surely still has some of those 10,000,000 shares left to sell.
DIMI currently has an incredible market cap of $563,673,116.16. Unbelievable for a company with no current business operations (revenues).
Just as amazing is that insiders have sat tightly on their shares while the price has slowly climbed
But all the information in this post points to a huge crash in the share price at some point in the near future. There is no telling when, but when some of the selling starts, the bottom is going to drop out for DIMI. Be sure to take profits while they are there on this one. They won't last.