06 Feb Primco Management Inc (PMCM) – updated research report
Today the Primco Management Inc (PMCM) stock price took a tumble down from $8.50/share to $.15/share.
If the tumble wasn't strange enough, the way the trading happened was even more unusual. Two quick little 2,500 block trades took the PMCM share price down from $8.50/share to $.25/share at 1:39 pm. and down again to $.20/share at 1:43 p.m. No more trades took place until a flurry of 19 small block hit during the last 6 minutes of trading further taking down the price to $.15/share. That was topped off with some big t trades after the close. 637,500 shares cleared after hours.
Nothing like a 98.2% drop in market cap in a single day of trading. The market cap fell from an astonishing $1,571,572,000 to $27,920,000.
In all fairness prior to today, it only took 2,100 shares to get the price from its opening trading price of $.25/share in July to the opening price of $8.50/share today, but it today's action is still notable enough event to take a closer look at PMCM to see what might be going on.
We already labeled PMCM a high probability for a future paid promotion on October 20, 2012 when they first announced their plans for a 20:1 forward split. The following is a re-post of that original research report
Primco Management Inc (PMCM) filed to raise the authorized share count from 25,000,000 to 500,000,000 and effect a 20:1 forward split last week. Because PMCM stock is all insider owned (including over 24,000,000 free trading shares held by seed shareholders now) and uses Jody Walker as legal counsel this automatically puts PMCM on watch for a future paid promotion.
The set up
PMCM was incorporated as a business entity in the state of Delaware on October 14, 2010.
Neal Friedman (only 22 at the time) was given the positions of president, CEO, CFO, and director of the shell.
Alexander Spira was given the secretary position.
According to his bio, Neal Friedman got his Bachelors degree from Isreal Torah Research Institute in 2008 (at just 19 years of age). His work experience included working at a dental technology company when he was 17 - 18, an attorneys office when he was 19, and a venture capitalist company when he was 20 - 22.
Isreal Torah Research Institute seems like an interesting place - see this link.
The dental office that Neal Friedman worked at was Implant Logic Systems. The COO for Implant Logic Systems is Neal's father, Dr. Murray Friedman.
The venture capital company that Neal Friedman worked for is Sapphire Capital Ventures. The Managing Member of Sapphire Capital Ventures is Neal's father Dr. Murray Friedman.
Who is Dr. Murray Friedman (like father like son)?
Dr. Murray Friedman was the long time CEO of former TBX play - Preventia Inc (PVTA) - which just so happened to also use Jody Walker as legal counsel. See our PVTA research report here.
Neal Friedman owned all 8,000,000 outstanding shares at this time which he got for $12,100 ($.0015/share).
That was the almost the exact same set up that PVTA had - Dr. Murray Friedman (Neal's father) owned all 8,000,000 outstanding shares when PVTA filed to go public which he got for $8,000 ($.001/share).
The plan for PMCM was to raise money to start a Real Estate management company.
The S-1 got approved on November 14, 2011.
Following the approval to go public, PMCM sold 1,245,600 shares to some private investors (seed shareholders) for $.25/share ($153,000).
Like with PVTA, PMCM mentioned a 2:1 forward split in their filings but never did the paper work to have it go through.
Instead on October 10, 2012, PMCM filed to do a 20:1 forward split.
The new share count
The new share count following the 20:1 forward split will look like this:
Authorized shares - 500,000,000
Outstanding shares - 184,912,000
Neal Friedman - 160,000,000 shares (restricted)
Seed Shareholders - 24,912,000 shares (free trading)
PMCM is already out of cash. To date the company has only produced $5,685 in revenues which was no match for its total operating expenses of $191,969.
What to expect next
I think a change of control is probably very likely in the near future. Since PVTA didn't go through a name/symbol change after their change in control PMCM probably won't either.
Once the 20:1 forward split goes through it will probably reset the PMCM share price to around $.05/share - $.10/share.
Knowing past TBX promos, if this one does get picked up by TBX, there will be some opportunity to get in early then flip the stock for some decent profits right after the announcement is made by TBX. Just the fact that I mentioned TBX and PMCM in the same report could lower the chances of a future TBX promo on this ticker.
PVTA never generated a lot of volume during its TBX promo, but insiders didn't get dump happy either. There is no telling what might happen with PMCM. At this point we don't know if it will get promoted at all let alone by TBX and we don't know if insiders will be as willing to control the dumping if there is a promotion on PMCM.
For now I am adding PMCM to our watch list for a future paid promotion.
What has happened since?
As predicted in the original research report, a change of control took place. PMCM filed for a change of control on October 23, 2012.
Zahoor Ahmad of Ontario, Canada bought all 8,000,000 shares from Neil Friedman for $346,380 – which became 160,000,000 shares after the 20:1 forward split.
Both Neil Friedman and Alexander Spira resigned from their positions and on October 27, 2012, Zahoor Ahmad (who has already been assigned as a Director) took over all of the vacant officer positions.
Zahoor Ahmad has spent that last 2 years working as a Real Estate agent. Before that he worked for Orkin exterminators for 8 years.
PMCM filed an 8K on December 10, 2012 just repeating the information about the change of control and 20:1 forward splits from several weeks earlier. That is the last time that we heard from the PMCM shell until today's unusual trading activity.
What will happen next?
So far there has been no disclosure about any plans to change the business operations. Fact is that PMCM is cash poor and does not have any business operations so there will have to be some kind of announcement about a merger or share exchange or acquisition in the works. Whether this leads to a name/symbol change there is no knowing for sure (usually it does).
My best guess about what will happen next is that Zahoor Ahmad will either merge the Primco Management Inc shell into a new Nevada business entity he created on December 7, 2012 called Legendary Ventures Inc or he will do a share exchange/acquisition using the Legendary Ventures Inc entity.
Zahoor Ahmad added himself as an officer for the Legendary Ventures Inc shell on January 31, 2013 so something could be in the works very soon. Legendary Ventures Inc has 410,000,000 authorized shares which will be enough to absorb the 184,912,000 outstanding shares of PMCM stock.
The name of the new shell suggests that the business plan may be changed to something having to do with mineral exploration.
PMCM seems like it has a little ways to go to be completely ready for a paid promotion, but that won't stop the speculators from wanting to take a position in PMCM which could make for an interesting day of trading for PMCM tomorrow.
Late Night Update
PMCM just released a late night press release that changes everything. PMCM has announced that ESMG Inc (Eat Sleep Media Group) has purchased majority control of the PMCM shell (over 80% of the outstanding shares) which was probably all of the shares owned by Zahoor Ahmad.
The EMSG Inc is a Southern California based company. Their website can be found here. It was only just registered as a domain on October 18, 2012. I have no idea who Leonard Lavallo is (the person that signed the PMCM press release - probably the IR for the company). EMSG Inc was only just registered as a business entity in Nevada on October 9, 2012.
According to the website, EMSG Inc is a new standard in innovative, consumer driven interactive entertainment content. A dynamic, highly motivated team that can act rapidly to acquire and develop new artists and seize targeted, new strategic opportunities. They use the leverage of their 5 operating units to integrate and maximize each investment in talent.
The following is the ESMG Inc management team:
Chief Executive Officer
David is a music mogul - with over 25 years of industry success and experience. He has produced and/or owned eighteen gold and platinum albums, with Artists Candyman, Sandra Gillette, Nate Dogg, 12 Gauge, Brotherhood Creed, Shi and many others. David has served in an executive capacity for a number of top music industry labels, such as A&R for MCA Records (1990-1993), Head of Urban Music for All American Communication, D.B.A. Scotti Bros./BMG and Zoo/BMG (1993- 1997) and founder of Breakaway Entertainment (1997-1999). In addition, David served as President of Death Row Records (1999-2001), where he worked on releasing records of hip hop superstars such as, Tupac's Greatest Hits, which includes the #1 hit single; "Changes", Snoop Dogg's The Dog Pound, The Movie "Deathrow Uncut" and Deathrow's; "Chronic 2000." David served as the top music executive for American Music Corporation (2001-2007), where he released in excess of one hundred titles. More recently he has worked on a number of special projects, such as DMX and he is currently overseeing the new and upcoming releases of DMX and Bone Thugs-N-Harmony and his new breakthrough artist: Bruce-E-Bee.
Alan J. Bailey
Chief Financial Officer and President, Eat Sleep Film & Eat Sleep TV
For 35 years, until March 2009, Alan served as a Senior Financial Executive for Paramount Pictures, both in the Netherlands (their International head office), New York and Hollywood, California, including being its Senior Vice President & Treasurer. Prior to joining Paramount Pictures, Alan was Vice President of Gulf & Western Industries in Bermuda, handling their offshore financial operations. Alan is an alumni of Ernst & Young and Grant Thornton ( CPA firms).
Alan's responsibilities with Paramount Pictures included managing Paramount's film slate financing (with such financiers as Merrill Lynch and Morgan Stanley), asset securitization financing, key deal analysis and cash planning, worldwide cash operations and bank management, corporate tax planning/corporate structuring, internal audit and financial compliance. More recently Alan founded Dynamic Media International based in Century City, which has 3 operating divisions: Dynamic Media Network to produce digital content for new media; Dynamic Media Music and indie music label, and Dynamic Media Pictures, an indie producer of lower budget movies and tv programs. He co-founded the Energy film Group to acquire indie movies for digital distribution worldwide and he founded, as the executive producer, the Movieville International Film Festival.
Craig Robert Olivas
Chief Technical Officer
Craig Olivas has an exceptional talent for providing practical solutions that engage executive officers and diverse teams at all levels. He possesses in-depth knowledge of converting visionary ideas into operating business ventures both technically and creatively. He is a business and technical professional with broad skill set committed to growing businesses.
Vice President of Operations
Ramiro Guzman was the Co-Founder of United Music & Media Group, Inc. in association with Entertainment veteran David Michery. As the Executice Vice President for almost five years, Ramiro Guzman utilized his expertise and experience in negotiating, signing artists, and filming projects. Ramiro Guzman has an extensive background in management, Human resources and Executive positions in multiple companies which also include development and implementation of investment projects.
J. Holt Smith
Director and Legal Consultant
J. Holt Smith has served as legal counsel for numerous celebrities, film studios and television studios over the last 3 decades. Notable clients include Johnny Carson, Hollywood Studios, and National Lampoon. Mr. Smith has structured numerous deals in Hollywood that have produced some of the most memorable moments in Film and Television. In 1979, he joined The United States Trust Company of New York as Vice President opening their Beverly Hills, California office. In 1980, he became a member of the Los Angeles law firm of Bushkin, Gaims, Gaines and Jonas serving as head of the Securities Department. From 1988 to present he practiced law with his own firm, Smith & Associates during which time he also joined the politically active firm of Kelley, Lytton & Vann in Los Angeles.
President, EatSleep Music
Jason is an experienced and forward thinking music industry executive who started his career at independent music retail. His acumen includes: more than 10 years at WEA now known as the Warner Music Group, SVP at Geffen Records and also heading up and running music sales and marketing departments for: Alan Kovac's Left Bank / Beyond Music, Ted Field's Artist Direct Records and Marc Geiger's iMusic / Reincarnate. Jason was responsible for Tower Records flagship Sunset location changing its iconic red and yellow TOWER RECORDS logo, to a red and yellow Tower style GUNS N ROSES logo on the front of the building in addition to spearheading an alliance with the retail community to start a "NO RECORD CLUB" campaign resulting in a 60% increase in catalog business. Some of Jason's most successful projects have included: Beck, Guns & Roses, Nirvana, Sonic Youth, the Crystal Method, Blondie, Aerosmith, the Roots, White Zombie, Rob Zombie, Cher, etc,
Currently, Jason continues to consult: artists, indie and major label clients along with other digital and physical retail accounts, while running Lunaticworks, his electronic music boutique label.
President, Eat Sleep Radio
LA based veteran radio programmer and industry consultant Mike Marino recently launched the hit radio station KJHM with very successful format that plays R&B hits and classics for a mass-appeal audience who grew up listening to that music. Creator of The Finest Radio Formats; beginning with two Rhythmic AC outlets: one in Denver, one in Palm Springs, CA. Launched KHHT Hot 92.3 Los Angeles, a Rhythmic AC that reached top 5 adult females and top 10 with adults overall in America's top radio revenue market. Launched KMXB Mix 94.1 Las Vegas which became a blue-print Modern AC/HOT AC for CBS Radio stations across America. Hired # 1 morning show Mark & Mercedes-- still together and tops in ratings 16 years later. Other programming gigs included KMEL San Francisco, KGGI Riverside, WKRQ Q102 Cincinnati. Mike also runs prep and audio imaging websites servicing hundreds of radio stations with daily content, including the biggest buzz stories and daily audio; also radio station production and imaging pieces.
Vice President, Eat Sleep Radio
Fred is a highly experienced radio promotion and technical engineer and he has worked in the radio industry radio broadcasting industry for more than 30 years. Fred started as a national radio promotions manager for Top 40's music in 1981. He then joined All American Communications as National Promotion Director (1991-1997) and served as an independent radio promotions executive for Independent Promotion & Rotations (1998-2001). Since 2001 to date, Fred has provided key contract technology and computer consulting services under his Fred Scotti Computer Consulting banner. During this same period, Fred served as VP Engineering for AllComedy Networks (2004-2007), Director of Engineering for National Lampoon Comedy Radio ( 2008-2009), Sr. Engineer for talk radio Network (2011-2012), and Chief Engineer for CRCMedia West and RMB Broadcasting ( 2012-present).
ES Film and TV Producer
Dan has worked in the Movie and TV industry for more than thirty years as a Producer. He is currently President and Chief Executive Officer of Mass Hysteria Entertainment Company, Inc, a publicly traded company. He previously served as the Chairman and CEO of the National Lampoon, a publicly traded company that produced “National Lampoon’s Christmas Vacation” and “Loaded Weapon.” Dan has produced 41 movies over the course of his career including “Bobby,” for which he was nominated for a Golden Globe for Best Picture, and which had an all-star cast. Some of his other popular films include “Powder”, “Blind Fury” and “1969” starring Robert Downey and Kiefer Sutherland as well as scores of other theatrical and television movies with stars such as Alec Baldwin, Ashley Judd, Tim Allen, Richard Dreyfuss, Christian Slater, Jeff Goldblum and Winona Ryder. He has worked with every major studio as well as many of the better-known independent companies. He maintains strong relationships with some of Hollywood’s top actors, writers and directors and enjoys a global reputation for his ability to produce quality projects in on schedule and budget. In 2003-2004 Dan partnered with Franchise Pictures founder Andrew Stevens to produce several action and sci-fi titles that included; “Pursued” for Lions Gate starring Christian Slater, “Blood Angels” starring Lorenzo Lamas for Screen Media and Universal Pictures, “Sea Ghost,” “Deep Evil,” “Glass Trap,” and “Blue Demon” for Blockbuster Entertainment. Dan was also the co-founder of ¬ÝHeartland Entertainment, a television movie company engaged in the financing, production, and distribution of family entertainment for the PAX Network. Dan is a member of the Producer’s Guild of America and for the past 20 years has been a panelist at his Alma Mater USC to grade the Masters Thesis in producing.
David Michery, Alan Baily, and Daniel Grodnik
This is not David Michery's first publicly traded shell. David Michery has been a control person in Seven Arts Entertainment Inc (SAPX) since November of 2011 through preferred shares he received from the sale of some music assets to the SAPX shell and also through shares he received via a consulting/employment contract with SAPX. He has also been listed as the president and director of SAPX.
SAPX is located in the same town and even shared the same street as ESMG Inc. during a stretch.
SAPX was diluted down from $.48/share in November of 2011 to $.019/share by September 3, 2012. After a 1:70 reverse split reset the SAPX share price, the stock was diluted down again from $1.40/share to its current price of $.02/share. SAPX used to trade on the NASDAQ, but got booted in September of 2012 because it was no where near meeting the share price requirements to remain listed there.
This is not Daniel Grodnik or Alan Bailey's first publicly traded shell either. Daniel Grodnik is the long time CEO of Mass Hysteria Entertainment Company Inc (MHYS) and Alan Bailey was his long time sidekick as a director for MHYS. MHYS just happens to share the same exact address with ESMG Inc.
MHYS is another badly diluted shell. Just 3 days ago the shell executed a 1:1000 reverse split after the share price had gotten beaten up by dilution really bad.
Alan J Bailey is also a long time officer of a blank check corporation which currently runs no actual operations, but also shares the same address with ESMG Inc called Hollywood Entertainment Edu Holdings Inc.
Truly ugly stuff and probably gives us a little bit of an idea what to expect in the future from the PMCM shell.
With this sudden surprise change of control things may speed up for PMCM. There is now no need to do a name/symbol change before insiders look to start promoting the stock. It certainly looks like the promotion could start right away tomorrow morning, PMCM will still just be a speculation play until the promotion gets announced so treat it as such.