31 Aug Endeavor Ip Inc (ENIP) – stock research report
On Tuesday, September 3, 2013, Endeavor IP Inc (ENIP) will conduct a 14:1 forward stock dividend. This corporate action which will greatly increase the number of free trading shares owned by the insiders of this infant ticker attracted our attention. The forward split came just a couple months after a change of control/acquisition filing which changed the name of the company from Finishing Touches Home Goods Inc to Endeavor IP Inc. We decided to take a closer look.
Finishing Touches Home Goods Inc was first set up as a Nevada business entity on December 8, 2009 by Daniel A Kramer of Val-U-Corp Services who has helped set up dozens of shells usually for foreign nominee officers. Some of the more prolific tickers set up by Daniel A Kramer include ARTH, PSON, and HMNC.
Originally Daniel A Kramer was assigned the role of sole officer and director, but he was soon replaced by Nikolay Koval (CEO), Ravilya Islyntieva (CFO), Olga Shenberger (Director), and Roman Urkevitch (Director) all from Russia.
Nikolav Koval and Ravilya Islyntieva were each issued 3,000,000 shares for services render valued at $3000 ($.001/share).
Between September 2010 and October of 2010, Finishing Touches Home Goods Inc also sold 3,000,000 shares to a group of 30 Russian seed shareholders for $.01/share raising $30,000.
Despite being made up entirely of individuals from Russia, the "company" used a virtual address in Phoenix, Arizona at 3420 E Shea Blvd. It sort of makes you wonder if their is somebody from the Phoenix, Arizona area hiding behind the Finishing Touches Home Goods Inc curtain possibly controlling some free trading stock in secret.
On February 25, 2011, Finishing Touches Home Goods Inc filed an S-1 to go public and to register those 3,000,000 seed shareholder shares for resale.
The attorney helping with the S-1 filing was Karen Batcher of Synergy Law Group. Other tickers taken public with Karen Batcher's help include AAHC, AAVC, CHLL, EPHO, JUHL, LCMD, PVEN, STTX, and VRCV. So far only STTX has seen a significant paid promotion.
Li & Company PC did the accounting work for the shell.
Finishing Touches Home Goods Inc had a business plan to be an integrated consulting firm that assists individuals, organizations, companies and government agencies in finding solutions to home and workplace-related barriers for seniors and people with disabilities as well as ergonomics consultancy. Basically, the company would focus on providing services and products that make living conditions safer and more accessible.
A service contract was set up with an Ontario company called G-Force Productions Inc which was controlled by another Russian named Alex Tomilov and an independent contract agreement with a Russian company called Haydon Development (English translation) which is controlled by Ivan Rubtcov.
To complete the two contracts, Finishing Touches Home Goods Inc signed a consulting agreement with a Russian company called Urban Bliss Solutions (English translation) which is controlled by Tatiana Medvedeva.
Finishing Touches Home Goods Inc managed $11,423 in revenues from the service contract prior to going public.
The S-1 was approved on June 10, 2011. Finishing Touches Home Goods Inc was assigned the trading symbol FNTU.
After Going Public
Unlike most tickers we see in our reports that only make up fake business operations to get SEC approval just to end up as empty shells waiting to be passed off for a future insider enrichment scheme, FNTU managed to actually set-up a real business operation.
During the first year of operation, FNTU made another $107,511. Not bad, but they had operating expenses of $139,515 for a net loss of $47,929. It was a failing business.
Change of Control
The group of Russians managed to avoid shell status by having real revenues, but business was far from a success. By the end of 2012 all the cash had run out it was time to pass off the shell to new ownership.
On January 27, 2012, Nikolav Koval and Ravilya Islyntieva sold their 6,000,000 combined shares to Mark K Hunter for $30,000.
All of the Russians resigned from their positions and Mark K Hunter became the sole officer/director of the ticker.
Mark K Hunter had spent the last 17 years providing equity and debt finance to small and medium sized businesses in the UK market place most recently as the Investment Director for YFM Equity Partners (formerly YFM Venture Finance Limited), a private equity and venture capital company.
The corporate address was then moved to the UK.
Foreign Debt Notes
All the old business operations of FNTU were sold for $1 leaving FNTU with no real business operations.
On January 13, 2012, Mark K Hunter formed a private company in the UK called Endeavour Principle Capital Limited. He then transferred 100% ownership of Endeavour Principle Capital Limited to FNTU at no charge. The focus was now changed to looking for investment opportunities.
On June 10, 2012, FNTU borrowed another $100,000 from Bay Capital AG.
On July 26, 2012, FNTU borrowed another $200,000 from Bay Capital AG.
All the Notes collected interest at 16% interest and were due on demand. The perfect set up for providing future free trading stock to select insiders in secrecy.
On May 13, 2013, FNTU purchased certain intellectual property rights (patents) from Mesh Comm, LLC and Solid Solar Energy, Inc.
From Mesh Comm LLC, FNTU acquired two U.S. patents and one pending patent application relating to wireless communication networks, as well as all right, title and interest in all related causes of actions and other enforcement rights under or on account of any of such acquired patents $800,000 and a royalty equal to 20% of the net revenues from any Enforcement Activities or Sales Transactions.
FNTU entered into a consulting agreement with Kenneth W. Garrard, the manager of Mesh pursuant to which Mr. Garrard will provide certain consulting services to the Company for a period of 24 months.
The balance sheet for Mesh Comm LLC showed no cash and no revenues since 2011.
From Solid Solar, FNTU acquired two patents relating to remote access energy monitoring systems and electric alternating current sensors for measuring alternating currents in circuit conductors, as well as all right, title and interest in all related causes of actions and other enforcement rights under or on account of any of such acquired patents for $100,000, 666,666 shares of the Company’s common stock, and a royalty equal to 20% of the net revenues from any Enforcement Activities or Sales Transactions.
No balance sheet was provided for Solid Solar, but Solid Solar Energy Inc had previously attempted to go public back in 2012 and filed to get approval for their S-1. The S-1 showed no revenues and almost no cash.
The above named patents are listed below:
Change of Control
Upon the closing of the Acquisitions, Mark Hunter resigned from all officer and director positions he held with the Company and Cameron Gray was appointed as the Company’s Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and director and Andrew Uribe was appointed as a director of the Company. In connection with his resignation, Mr. Hunter cancelled his 6,000,000 shares.
Cameron Gray was issued 133,334 (post-split shares). Cameron Gray, 42, has served as a special advisor to Elysian SSG since March 2013 and as an outside consultant to Pine River Convertibles Fund Ltd. and Pine River Master Fund Ltd since April 2013. Mr. Gray co-founded Claims Capital in March 2012. From June 2009 to January 2012, Mr. Gray served as the Senior Vice President of ICAP Patent Brokerage and served as a Director of IPXI from June 2008 to March 2009.
Andrew Uribe, 57, has served as the President and Director of INVO BioScience Inc (IVOB) since July 2006. IVOB has been dealing with some bad debt issues. Mr. Uribe served as the sole officer and director of Southridge Technology Group, Inc. (SOUT) which now trades as RxElite Inc (RXEI) from April 13, 2007 through July 13, 2007. RXEI was destroyed by debt. On December 29, 2011, Andrew Uribe became the CEO and CFO of American Strategic Minerals Corp which now trades as Marathon Patent Group Inc (MARA). MARA just did a big reverse split in July of 2013. Andrew Uribe was also a seed shareholder in Icarus Wind Energy Inc which attempted to go public in 2012 and failed to get the S-1 approved and Solid Solar Energy Inc which attempted to go public in 2012 and failed to get the S-1 approved.. Icarus Wind Energy Inc and Solid Solar Energy Inc were mirrors of each other.
More Debt Notes
Congruent with the asset purchase agreement, FNTU issued new Promissory Notes totally $1,500,000 to an anonymous lender. That raised the amount of debts owed by FNTU to $1,900,000.
On May 15, 2013, Finishing Touches Home Goods Inc (FNTU) changed its name to Endeavor IP Inc to reflect the new focus of business operations. The name change came with a symbol change to ENIP approved by FINRA on June 19, 2013.
New Business Operations
Upon closing of the Acquisitions, ENIP was the owner or assignee of certain patents, licenses and applications. ENIP said it intended to become engaged in the commercialization and development of those patents, but subsequently press releases make it clear that the main objective will be to basically function as a patent troll.
On August 13, 2013, ENIP announced it was filing patent infringement lawsuits against Itron, Inc. and Elster Solutions in the United States District Court for the District of Delaware (Case Nos. 1:13-cv-01343-and 1:13-cv-01344) related to U.S. Patent No. 7,379,981 (the ‘981 patent), entitled “Wireless Communication Enabled Meter and Network.”.
See the ENIP website here.
14:1 forward stock dividend
On August 28, 2013, ENIP announced a 14:1 forward stock dividend (which is basically just a forward stock split without having a 'D' added) to go into effect on September 3, 2013.
Since the only shares that would be effected by the 14:1 forward split is the free trading shares owned by the seed shareholders who got to see their ownership grow from 3,000,000 share to 42,000,000 shares, it seems obvious that ENIP is more about setting up the insiders that now control all the free trading stock (I doubt it is the nominee Russians still) to get very very rich than it is about anything else.
The New Share Count
Following the 14:1 split, the new share count will look as follows:
Authorized - 200,000,000 shares
Outstanding - 42,800,002 shares
Cameron Gray - 133,334 shares
Solid Solar Energy Inc - 666,666 shares
Seed Shareholders (could be in anybody's hands now) - 42,000,000 shares (free trading) costing $.0007/share
ENIP leaves a bad taste in my mouth. From the set-up, to the history of Andrew Uribe with past tickers, to the failed attempt to go public by Solid Solar Energy Inc, to the patent trolling, to the huge foreign debt Notes, to the way the forward split was obviously done just to create more free trading shares for the insiders that now own the seed shareholder shares.
Because there are 42,000,000 free trading shares, a link to both the UK and Switzerland, and the foreign debt notes, ENIP might get past the bad taste to amount to some kind of successful paid promotion. Guess we'll have to wait in see.
For now, we'll see the share price get reset from the current $6.00 price to around $.43/share when it opens on September 3, 2013 thanks to the 14:1 forward split. $.43/share is towards the high end of where a good promotion would kick off for a stock with 42,000,000 free trading shares, but at this point I'm not sure if we'll see a good promotion. We'll continue to watch for signs of some kind of possible paid promotion and keep our members updated accordingly.