14 Aug Punchline Entertainment Inc (PUNL) Throws First Punch
Insiders have been patiently holding their Punchline Entertainment Inc shares for 5 1/2 years sitting outside of the ring away from any action. Amazing really that 5 1/2 years could go by without any new shares being issued and only 7,244 of the seed shareholder shares hitting the market before yesterday's big volume breakout of 200,000 shares took the share price from $.18/share to $.50/share and today's even bigger volume breakout of 661,457 shares took the share price from $.50/share to $.70/share.
Before you start thinking that the seed shareholders probably feel that Punchline Entertainment Inc is undervalued and they stand to make more money by continuing to hold their shares, let's review a little bit what Punchline Entertainment Inc is all about.
Punchline Entertainment Inc was registered as a Nevada business entity on December 11, 2006 with Nikolai Malitski planted as the nominee sole officer/director. Mr. Malitski grew up and went to school in Russia before coming to the United States. Punchline Entertainment Inc went public with the business plan to distribute amusement game machines, but Mr. Malitski has absolutely no experience in the gaming /video game/entertainment industry. His background was in construction, primarily plumbing.
Nikolai Malitski was given 3,000,000 shares for $3,000 ($.001/share) on February 22, 2007. No doubt the plan from the start was for him to eventually give up those shares and move on.
On March 15, 2007, 1,500,000 shares were sold to 16 Russian nominee shareholders for $15,000 ($.01/share).
On May 9, 2007, 500,000 more shares were sold to 12 more Russian nominee shareholders for $10,000 ($.02/share).
SEC litigation that showed up today explains very very well how the unnamed insiders that are really behind the creation of these "shell factory" shells use nominal officers and nominal seed shareholders.
The SEC alleges that the husband and wife team of Thomas and Elizabeth Coldicutt installed nominee officers and directors in corporations that they secretly funded and controlled, and that they directed and helped the corporate nominees, including Farrell, Weaver, Greenwood, and Gomez, submit materially false and misleading registration statements and reports to the SEC. These false documents gave the companies the appearance of legitimacy and permitted their securities to be quoted on the OTC Bulletin Board.
In the present case, the SEC alleges that the shell companies filed registration statements and reports with the SEC that misrepresented that the companies were formed to pursue mining activities, when in fact they neither conducted nor were intended to conduct any real mining activities. The SEC further contends that these companies' SEC filings failed to disclose that the Coldicutts controlled and funded the companies. In addition, the SEC alleges that the Coldicutts obtained nominees to purchase stock in the companies, and then provided these nominees with all or most of the funds to purchase the stock. Farrell, Weaver, Greenwood, and Gomez each substantially assisted the scheme by, among other things, acting as corporate nominees, recruiting other nominees to hold stock in the shells, and signing materially false and misleading SEC filings. In addition, Weaver, Greenwood, and Farrell each formed, registered, marketed, and ultimately sold at least one shell, together with the Coldicutts.
I personally believe that PUNL is just a "shell factory" company along with most of the companies that we end up identifying as future pump&dumps.
Punchline Entertainment Inc first filed an SB2 to go public on October 25, 2007, but it took them several attempts before the SEC finally approved the SB2 filing on January 17, 2008. By the time PUNL was granted public trading status it had only $9,400 in cash left and only $915 in revenues in its entire history.
6 months later, on June 8, 2009, Nikolai Malitski did a 10:1 forward split while all the share were still insider owned raising the share count to 50,000,000 where it still sits today.
- 1) Nikolai Malitski now owned 30,000,000 shares ($.0001/share)
- 2) Seed shareholders now owned 20,000,000 shares ($.001/share - $.002/share)
Nikolai Malitski's work was done and he stepped aside on August 17, 2009. Kathryn Kozak took over as the CEO. Kathryn Kozak did have a background in Media, but more importantly in Internet marketing and Public Relations while studying in British Columbia.
A few weeks after his resignation, on November 4, 2009, Nikolai Malitski sold his 30,000,000 shares (and control of the shell) to Michael Thiessen for $30,000 ($.001/share). The plumber made a whole $27,000 for his 2 1/2 years of nominal service, but since according to the PUNL filings, Malitski he put $26,053 of his own money into the PUNL shell during his tenure, he pretty much just broke even. He probably had some other kind of agreement for compensation from the unnamed people that really control the shell.
Prior to Michael Thiessen taking over control of the PUNL shell, he was involved with Uomo Media Inc (UOMO) then known as First Source Data Inc. as a seed shareholder. Three of his relatives (Melanie Thiessen, Anna Thiessen, and Henry Thiessen) were also seed shareholders in the UOMO shell. After going being granted public trading status, the First Source Data Inc shell had a change of control, a name and symbol change to Uomo Media Inc (UOMO), and a 4:1 forward split. Yet another Thiessen showed up in the filings. Jueane Thiessen became the CFO, secretary, and director of the shell. UOMO was a big Hunter twin (aka hackthestockmarket) pump&dump - see comments below this research report.
Jueane Thiessen was also the long time president of Portlogic Systems Inc (PGSY). You'll notice many of the same seed shareholders and officers in the PGSY shell that were in the UOMO shell. Jueane Thiessen is still involved in PGSY recently signing a consulting agreement with that shell.
Back to PUNL
I'm not sure how Michael Thiessen could justify that salary since at this point PUNL was completely out of cash and had not gained any more revenues since the initial $915 in revenues they had when they first went public. See the March 2010 10Q for details.
Nothing changed over the next 2 years. The share count remained at 50,000,000 outstanding shares. The last 10Q for the period ending April 30, 2012 still shows that the PUNL shell has $0 in cash, no assets, no revenues since that initial $915, and now over $225,000 in accrued salary owed to Michael Thiessen.
The current business plan hasn't changed much. PUNL plans on placing strength testing amusement machines called "Boxers" in various venues like bars, pubs, and nightclubs in the Seattle, Washington area.
Even the Nevada business entity for the PUNL shell got revoked on December 31, 2011 for failing to file with the Nevada SOS since 2009. Of course with $0 in cash how are they going to pay the $1,800 due to the state of Nevada?
That PUNL financials give shareholders absolutely nothing to get excited about. It is a one man show and his only duty seems to be building up debt for his accrued salary which I'm sure one day he'll collect on with discounted shares or some other arrangement that will amount to far more money in his pocket than he is owed.
So what is up with the recent price movement? The way I see it there are a couple of possibilities.
#1) front loading before a possible paid promotion
#2) insiders manipulating the share price up to draw attention to the stock to attract buyers for future dumping
In this case it is probably some of both. #1 because of the UOMO connection and #2 because of all the free trading insider owned shares. PUNL is a typical pump&dump company. It is really nothing more than a shell with no assets, no real business operations, a defunct business entity, and 20,000,000 free trading shares ready to be dumped at any time.
Either way I wouldn't be surprised to see a press release very soon and a paid promotion in the not too distant future.