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Rainbow International Corp (RNBI) – updated research report

07 May Rainbow International Corp (RNBI) – updated research report

 

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A long time ago on July 12, 2013 we did a research report on RNBI and put it on our list of tickers to watch for a future paid promotion.  The company had just filed for a 400:1 forward split and just completed an acquisition agreement.  All signs pointed towards a paid promotion coming in the following months.  Soon after that report RNBI cancelled its acquisition and took a few steps backwards becoming just a future p&d shell in need of a new acquisition and change of control before it would be promotion ready.  On May 5, 2014, we got an 8K filing from RNBI for that change of control and in that filing we got a few hints about the new business operations coming.  It may not be a coincidence that right about the time of that 8K filing RNBI suddenly started to see some volume after almost never trading before that.  That volume picked up today with a lot of insider selling at the bid taking the price down to as low as $.11/share.  It is definitely time to take our old research report and update it.  Here we go.....

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The Set-up (obvious clues)

Rainbow International Corp was set up as a Nevada business entity on April 22, 2011 with Vladimir Bibik of the Czech Republic as the sole officer/director of the shell.

Vladimir Bibik (only 26 at this time) studied at Saint Petersburg University where he was a history major before starting a job installing and operating amusement machines in the Czech Republic. This was Mr. Bibik's first time involved with a public company. Obviously he was just recruited to act as the front man to help babysit the shell until it got approval from the SEC to publicly trade.

Vladimir Bibik was issued 3,000,000 shares for $3,000 cash.

The business plan for Rainbow International Corp was to start a business as a distributor selling Bohemian crystal produced in Czech Republic. Rainbow International Corp even had a purchase agreement with Autodily Rachot S.R.O. of the Czech Republic to acquire the Bohemian crystal to be resold.

Helping Vladimir Bibik to pull the wool over the eyes of the SEC was Thomas E Puzzo. Puzzo has made a name for himself helping to take these types of shells public many of which end up becoming big pump&dumps in the future with paid promotions. Thomas E. Puzzo sits number 4 on our list of attorneys to follow for a future paid promotion. Other pump&dumps linked to Thomas E Puzzo include LOTE, NSRS, RAYS, SNTN, TQLA, TRTC, and TUNG.

Thomas E Puzzo helped draft the S-1 filing for our puppet CEO which was filed on July 5, 2011. With Puzzo's help, Rainbow International Corp convinced the SEC that if they approved the S-1 filing, Rainbow International Corp would sell 2,000,000 shares raising $80,000 to use to initiate their forward looking business plan.

Thomas E Puzzo and Rainbow International Corp laid out the plan to the SEC as follows:

If 2,000,000 shares are sold they would be able to pay for their filings, their office, their website, marketing and advertising, a sales person, and all their administrative costs.

If 1,500,000 shares are sold they would be able to pay for their filings, their office, their website, marketing and advertising, and administrative costs (no sales person would be hired and there would be small cuts to the amounts spent on other expenses).

If 1,000,000 shares are sold they would be able to pay for their filings, their office, their website, some marketing and advertising, and some administrative costs (no sales person would be hired and there would be big cuts to the amounts spent on other expenses).

If 500,000 shares are sold they would be able to pay for their filings, their office, their website, and some administrative expenses (no marketing and advertising, no sales person, and there would be large cuts to the amounts spent on other expenses).

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Thomas Puzzo and Rainbow International Corp would not end up being entirely honest, but that should be no surprise. Pretty much no Thomas Puzzo ticker has ever spent any money on their business expenses as promised to the SEC. They are not being taken public to be real businesses. They are being taken public to issue stock to anonymous insiders at next to nothing to be dumped later for huge profits (an insider enrichment scheme).

Accountant Thomas J Harris (also linked to several pump&dump tickers) was hired to provide the required auditor's consent.

The SEC approved the S-1 filing on September 14, 2011.  Rainbow International Corp was given the trading symbol RNBI.

 

Failed business (more clues)

As could have easily been predicted based on the bad actors involved, Rainbow International Corp (RNBI) only managed to sell 540,000 shares at $.04/share through their public offering putting them on the low end and not giving them enough money to achieve the forward looking business plan that the SEC approved. The real plan was to fail and then pass off the shell to new ownership making sure the anonymous insiders were set up for future enrichment.

Rainbow International Corp (RNBI) would not even end up spending the money to register a domain name making it very obvious that they never intended to follow through with what they promised the SEC.

 

Change of Control #1

On March 26, 2012, Less than 7 months after taking Rainbow International Corp public as its puppet CEO, Vladimir Bibik sold 2,856,312 of his 3,000,000 shares to Emine Ozer of Turkey for an undisclosed amount of cash giving Ms. Ozer voting control of the RNBI shell.

On April 1, 2012, Vladimir Bibik resigned from all of his positions and Donald L Perks was assigned the new role of sole officer/director of the RNBI shell and gained control of the other 143,688 shares previously controlled by the original babysitter of the shell, Vladimir Bibik, for an undisclosed amount of cash.

From 2003 - 2012, Donald L Perks was officer/director for Global Immune Technologies Inc (GIMU).

 

Private Placement / Acquisition (taking care of her brother)

On May 15, 2012, the control person for RNBI, Eminie Ozer, sold 2,207,508 shares to her brother, Aslan Ozer, also from Turkey in a private placement for $264,867 ($.12/share).

On July 31, 2012, Eminie Ozer issued another 2,500,000 shares to her brother, Aslan Ozer, to acquire a Turkish business entity controlled by Aslan Ozer called Aslanay Madencilik Sanayi Ve Ticaret Limited Sirketi, (translated -Aslanay Mining, Industry, and Trade Limited Co.). Aslan Ozer was the sole member of the Turkish business entity.

Aslanay was established and registered in April 2012 with offices located in Istanbul, Turkey. Aslanay is a mineral exploration company engaged in the acquisition and development of gold, silver, lead, zinc and graphite.

Through the acquisition, Aslanay became a wholly owned subsidiary of RNBI. Aslanay came with mineral licenses for seven properties located in Turkey from the Republic of Turkey Ministry of Energy and Natural Resources. Two of the properties now make up two mining projects, the Havadan project and the Gumushane project. The balance sheet for Aslanay prior to the acquisition showed $361,059 in cash, $401,606 in property claims, $667,584 in liabilities which include $658,842 owed to Aslan Ozer, and $0 in revenues. Later filings would show a sharp reduction in cash and liabilities. Most likely, the $264,867 paid by Aslan Ozer for his first 2,207,508 shares was just deducted from the Aslanay balance sheet.

With his 4,707,508 shares, Aslan Ozer became the new control person for Rainbow International Corp (RNBI).

On September 27, 2012, Robert M Allender Jr. provided a technical report for the Havadan project and a technical report for the Gumushane project. How nice of Mr. Allender Jr to fly from Arizona all the way to Turkey to do this. Past penny stocks that Robert M Allender Jr provided technical reports for includes AMEL and BFGC.

 

Forward split (the biggest clue)

We already had plenty of clues that RNBI was set up from day one to be a future paid promotion, but on July 9, 2013, RNBI gave us the biggest clue by executing a 400:1 forward split. This gave insiders their stock at a ridiculously cheap price and gives them a ridiculous amount of free trading stock.

Prior to the split on June 28, 2013, RNBI raised their authorized share count to 700,000,000 shares. and authorized 50,000,000 preferred shares.

As things stood the new share count would look at follows:

Authorized - 700,000,000 shares
Outstanding - 3,299,003,200 shares
Aslam Ozer - 1,883,003,200 shares
Emine Ozer - 1,142,524,800 shares
Vladimir Bibik - 57,475,200 shares
Anonymous Seed Shareholders - 216,000,000 shares (free trading) costing just $.0001/share

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Obviously based on those numbers, RNBI would be almost 2,600,000,000 over their limit. That means that most of the shares currently held by the Ozer siblings will either get cancelled or converted into preferred shares. It really doesn't matter since those are all restricted shares anyways. What matters is the 216,000,000 free trading shares now in control of anonymous insiders directly linked to the future stock promoter for RNBI. With that many free trading shares, only Awesome Penny Stocks at their prime would have been able to run any kind of successful promotion for RNBI.

 

The original website

Two domains currently exist linked to the Turkish entity that was acquired by RNBI:

aslanay.com.tr

aslanaymadencilik.com

The first website discloses yet another Ozer family member involved named Belma Ozer under the contact page for the company.

 

Cancellation of the Acquisition

RNBI would file no 8k for the cancellation of their Turkish mining companies.  What would end up happening is just 7 months after filing their 8k for the acquisition of Aslanay Mining, Industry, and Trade Limited Co, RNBI filed an 8K disclosing that the financial information for those Turkish companies provided by their accountant Thomas J Harris could not be relied upon because it was inaccurate.  Based on that information we can probably assume that the SEC asked some questions and RNBI was unable to satisfy their concerns all leading to Thomas J Harris becoming the scapegoat in the failed scheme and the acquisition being cancelled.

With the cancellation of the agreement came the cancellation of 7,563,820 shares (pre-forward split) which accounted for the 2,500,000 shares issued to Aslan Ozer for the acquisition, the 2,207,508 shares sold to Aslan Ozer in a private placement, and the 2,856,213 shares gifted to Emine Ozer by the sole officer/director of the RNBI shell at this time, Vladimir Bibik.

That left the 143,688 shares still owned by Vladimir Bibik and the 540,000 seed shareholder shares outstanding.

With the 400:1 forward split that would make the share structure look as follows:

Authorized - 700,000,000 shares
Outstanding - 273,475,200 shares
Donald Perks - 57,475,200 shares (restricted)
Seed Shareholders - 216,000,000 shares (free trading) costing $.0001/share

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Sneaky RNBI insiders

What was never disclosed in any RNBI filings was that the Ozer family which cancelled all he shares they received through the acquisition of their mining companies also secretly had control of 192,000,000 of the 216,000,000 free trading seed shareholder shares.

Believe it or not, the original plan looks like it was a scheme for the Ozer family to dump 192,000,000 shares on the public using hype created by two Turkish mining companies they controlled whose true value was grossly overstated by their hired hand, Thomas J Harris, all while Donald Perks lead the way as the CEO of RNBI on paper.

Their illegal insider enrichment scheme failed without consequence.

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Out with the old (well maybe not all of the old) / in with the new

For the next 6 months RNBI sat in limbo with no business operations to help this future paid promotion ticker get promoted.

Finally on May 5, 2014 we got an 8K that Donald Perks was out and Donald Corn was in as the new control person of the RNBI shell.

The most interesting part of that 8K was that we find out that 192,000,000 of the 216,000,000 seed shareholder shares were controlled by members of the Ozer family from Turkey (Aslan Ozer and Lucia Ozer).  As already explained in the above section this was never disclosed in any previous RNBI filings.  All signs pointed to a scheme where the Ozer family were going to secretly and illegally dump 192,000,000 shares on the public using hype created by two Turkish mining companies they controlled whose true value was grossly overstated by their hired hand, Thomas J Harris, all while Donald Perks lead the way as the CEO of RNBI on paper.

As part of the change of control, Aslan Ozer and Lucia Ozer agreed to cancel those 192,000,000 shares leaving the total number of free trading seed shareholder shares at 24,000,000.  Personally I have to wonder if the Ozer family also might still secretly control those other 24,000,000 shares and are still set-up to profit in a huge way from a future paid promotion of the RNBI ticker since those 24,000,000 shares only cost $2,400 ($.0001/share).   At $.10/share the Ozer family would stand to make $2,397,600 in profits.  At $.20/share those profits double to $4,797,600.  At $.30/share those profits triple to $7,197,600.  You get the picture.  Big money.

The 57,475,200 share controlled by Donald Perks were sold to Donald Corn for $25,000.  A great bargain for the RNBI shell.

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Current Share Structure

Authorized - 700,000,000 shares
Outstanding - 81,475,200 shares
Donald Corn - 57,475,200 shares (restricted)
Seed Shareholders (possibly the Ozer family) - 24,000,000 shares (free trading) costing $.0001/share

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More about Donald Corn

According the his bio in the recent 8K, Donald Corn has an extensive business marketing background and has been involved in developing leading edge product offerings in several industries, including the first BioTech Online database for medical researchers; the HUD HomeSource for real estate, and targeted mobile platform applications.  Since then, Mr. Corn has worked as a private investor.  Mr. Corn graduated from USMA in 1971.   From 1971 to 1976, Mr. Corn had a distinguished career as an Officer in the Armed Forces, where he managed the largest supply and maintenance facility in the US Army; later engaged a second career as an IBM computer sales and marketing professional.   Mr. Corn grew up in a large farming operation in Kansas and the Company believes he has a sufficient background to implement both hemp farming operations along the Front Range of Colorado, as well as a production/distribution and nationwide market organization to capitalize on these new growth industry.  

That bio gives us some good information including telling us that RNBI will be engaging in the growth and marketing of hemp.

Using the little clues from the bio I was able to track Donald Corn to a company called Painfree Corporation - see the website here.

Painfree Corporation was incorporated as a Colorado business entity on January 31, 2014 by Donald Corn.

Painfree Corporation has the same corporate address and phone number as Rainbow International Corp now has at 17422 E. Progress Drive, Suite 107, Centennial, CO 80015 - 720-432-0214

According to the website Painfree Corporation is a company that was formed to manufacture and distribute its premier product line PainFreePlus™, a series of topical pain remedies using homeopathic ingredients developed from industrial cannabidiol (CBD).  The Company employs a ‘seed to shelf’ set of solutions; including hemp seed farming operations, hemp processing, product formulation, finished packaging and goods delivery to target markets, both retail and online sales.  The Company operates as a non-prescription drug wholesaler; US SIC Code - 2834 Pharmaceutical Preparations.

On the heels of Colorado approving new industrial hemp rules which went into effect on March 1, 2014, Painfree Corporation is in the process of establishing the first hemp processing operatiion in the Front Range of Colorado; where farmers growing hemp can sell their crops (through the elevator at Bennett).  Farmers interested in learning more about the financial benefits of hemp farming should contact the Company herein.

One interesting and sort of funny thing I noticed on the Painfree Corporation website is that they claim to have an online store then they have you click on a link that takes you to the search results of Cannabidiol products including hemp based oil products that are sold by various different sellers on Amazon (none of them Painfree Corporation).

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What we expect to happen from here

Very shortly we expect to see a press release and/or 8K announcing the acquisition/merger of Painfree Corporation into the RNBI shell.

With the announcement of the merger/acquisition RNBI will be 100% promotion ready.  It is possible though that the company will file for a name/symbol change to better reflect the new business operations which would push back a promotion at least a few days.  RNBI may have already filed for approval of a name/symbol change making the changes less than 2 weeks away.

We believe that the plan for RNBI was always to have a future paid promotion from the very day that Thomas E Puzzo and the Czech Nominee officer, Vladimir Bibik, were recruited to set-up the shell and take it public.  The original plan to promote the ticker as a Turkish mining company failed, but RNBI has been restructured with a much better share structure to be supported in the current paid promotion world lowering the free trading share structure to 24,000,000 and picking a recently hot industry to help hype the stock.

In the old days a paid promotion selling 24,000,000 shares could start in the $.60 - $.80 range with some success.  I really like what we saw today with the price being taken down by insider selling to the $.11/share - $.14/share range.  Even in this crappy paid promo era a good promoter should be able to run a profitable promotion from $.11/share on a float of 24,000,000 shares especially if what we suspect is true that the same insiders control all 24,000,000 free trading shares.

At this point we'll watch to see if insiders are willing to continue selling on the bid to let some more shares go down in that $.11/share range or possibly lower and keep an eye out for that very important 8k filing or press release that might mark the paid promotion about to start.  We will continue to keep RNBI on our list of tickers to watch for a future paid promotion.

 

 

 

 

 

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