03 Nov VuMee Inc (VUME) – research report
Back on 10/01/12 we mentioned VUME in our daily report found here. The shell had many of the basic characteristics of a future pump&dump ticker. We have been following that ticker closely noting its developments. Today I want to complete the full research that I promised.
VuMee is a digital mobile advertising platform designed to provide high profile individuals and brands the ability to connect with fans and consumers via engaging and entertaining video content. VuMee utilizes user-friendly push technology to help connect companies, brands and celebrities to targeted consumer segments. It acts as a unique platform to hear from consumers, build visual relationships and connect users with their favorite celebrities and brands through both mobile and PC platforms.
Basically the idea is that VUME offers its users the ability to upload video via the VuMee App on their mobile device or PC, and seamlessly share that content with their fan base thereby providing targeted demographics to advertisers
VuMee is a free app available through itunes developed by Data Pangea LLC. It is the only app developed by Data Pangea LLC to date. Data Panga LLC is a Florida business entity incorporated on March 22, 2012 by MLJP LLC (Michael Spiegel, John Powers, and Lou Rosen).
On Friday, Vumee announced in a press release that they would be adding NFL football player Brandon Spikes and professional soccer player Lauren Sesselmann to its roster of celebrity contributors. These celebrities will be utilizing VuMee's technology to connect directly with their fans and "Sharing their Vu", on both desktop and mobile platforms.
Since trading began for the VUME ticker on June 28, 2012, only 15,400 shares have traded. There has been no trades since October 8, 2012.
Some history of the VUME shell
Prior to becoming VuMee Inc, the shell was known as PaperWorks Inc.
PaperWorks Inc was incorporated in the state of Nevada on April 30, 2008 by Rhoda Rizkalla.
On December 5, 2008, Rhoda Rizkalla filed an S-1 to take PaperWorks Inc public.
PaperWorks Inc was a developmental company with a business plan to offer customized stationary, but no actual business at the time it filed to go public. A free website was built to preview some of the planned customized stationary features.
The attorney helping with the S-1 filing was Gary L. Blum.
At the time that PaperWorks Inc went public, Rhoda Rizkalla owned all 3,000,000 outstanding shares that she received for $15,000 ($.005/share).
Rhoda Rizkalla (aka Rhoda Rizkalla-Couvaras) didn't exactly have a long background in paper supplies. She has been a marketing and communications consultant with The Marquis Group LLC for more than 20 years. Rhoda Rizkalla is the owner/president of The Marquis Group LLC. Rizkalla graduated from the University of British Columbia in 1989 then founded The Marquis Group LLC in Vancouver immediately after. In 2000, Rizkalla opened an office for The Marquis Group LLC in Scottsdale, Arizona. Obviously if the consulting business has been around for more than 20 years it is doing well. Rhoda Rizkalla can be found in photos bumping elbows with celebrities such as Jay Leno and others.
Maybe the idea to use the business plan of a Customized Stationary Paper Supply company came because Rhoda Rizkalla-Couvaras is very close friends with Annabel Clarke Mackay also known as The Paperqueen. Annabel Clarke Mackay runs a real company that does customized paper supplies called The Paperqueen. Rhoda Rizkalla-Couvaras works as the publicist for the company. More details in this blog entry.
Seed Shareholders / Change in Control
On July 13, 2009, PaperWorks Inc (PPKS) completed its S-1 registration and sold 3,000,000 shares to a group of private anonymous investors (seed shareholders) for $.015/share raising $45,000.
To no surprise, over the next 21 months not a penny of revenues was generated as the doomed to fail before it was started PaperWorks Inc customized paper business never got off the ground. By April of 2012, all of the money raised from the private placement was almost gone and the next stage of the pump&dump shell was put into action.
On April 17, 2012, a Letter of Intent was signed between PaperWorks Inc and Data Pangea LLC for Data Pangea LLC to take over control of the shell.
To facilitate the change of control, a brand new business entity called Vumee Inc was created in Nevada on April 23, 2012 to be merged into the PaperWorks Inc entity.
An 8K was filed that same day (April 23, 2012) announcing the name change of the shell from PaperWorks Inc to Vumee Inc, an increase in authorized shares from 75,000,000 to 750,000,000, and a 10:1 forward split.
The share exchange/merger with Data Pangea LLC/VuMee Inc took place on May 1, 2012. Rhoda Rizdalla cancelled her 3,000,000 shares. Data Pangea LLC was given 3,000,100 newly issued, restricted shares of VUME stock. Following the 10:1 forward split, the 3,000,100 shares would become 30,001,000 shares.
The 30,001,000 shares were split up as follows:
MR BLSD, LLC 26.66% 7,999,000 Combined Effort LLC 13.33% 4,000,000 VuMee Holdings, LLC 15.00% 4,500,000 MLJP, LLC 45.01% 13,502,000
Form 3 filings help us break down the share ownership of those 30,001,000 shares a little better:
Donna Rispoli - 4,000,000 shares
Michael Spiegel - 6,278,500 shares
Lou Rosen - 2,295,000 shares
Stacie Daley - 9,197,800 shares (1,198,800 of which were given to the children of Stacie Daley)
Unknown - 8,229,700 shares
Following the share exchange agreement, Rhoda Rizdalla resigned from all of her officer/director positions.
Stacie Daley became a new director
Michael Spiegal became the new CEO, president, and director
Lou Rosen became the new CFO, COO, and director
Bruce Goldstein became the new Chief Strategy Officer
That Promissory Note will probably never be paid back eventually being turned into a convertible Note and converted into super discounted free trading shares.
$150,000 of that $350,000 loan will go to pay Michael Spiegal's compensation of $12,500/month over the next year (ending September 1, 2013). Spiegal is compensated as a consultant not as an officer of the company.
$150,000 of that $350,000 loan will go to pay Lou Rosen's compensation of $12,500/month over the next year (ending September 1, 2013). Rosen is compensated as a consultant not as an officer of the company.
On October 2, 2012, according to this Form 4 filing, Stacie Kirsten Daley (who is an attorney in Florida) gave away 6,697,800 shares as part of a settlement agreement at roughly $1.00/share ($7,000,000).
Stacie Kirsten Daley
Stacie Kirsten Daley is the daughter of convicted felon, Randolph Lenz, and Karin Lenz and sister of Corbett Lenz.
Randolph Lenz who was once the President of the now defunct, Connecticut Bank of Commerce, was sentenced to 51 months in prison for making illegal loans.
Randolph Lenz and his publicly traded company Terex Corp showed up in SEC litigation stemming from the same illegal loans that landed him in prison.
On July 28, 2010, the United States District Court Southern District of Florida Miami Division found Randolph Lenz, Karin Lenz, and their daughter Stacie Kirsten Daley guilty of participating in illegal loans (stemming back to the article linked above) with the intent of defrauding the IRS. See the legal document here.
The courts did not seem too impressed with the testimony given by Ms Daley and her parents:
On July 12, 2011, the US Courts ended up reversing the ruling and siding with Equity Investment Partners LP against the IRS.
Still though, you have to wonder what the settlement agreement involving Ms. Daley giving up 6,697,800 of her shares was all about.
Ms. Daley's brother, Corbett, is a Broker for ASG Securities Inc in Florida.
Stacie Kirsten Daley and her brother Corbett Randolph Daley still run a Florida business entity together that used to include their parents called CLDS Properties, LC.
As of the last financial report, VuMee Inc has not earned a penny in revenues. Since the app is free, revenues are only generated through advertisements on their website. The website is very unimpressive. VuMee Inc tries to lure in celebrities offering them the opportunity to earn revenues through the videos they post and the chance to share in the advertisement money made by the website.
On October 23, 2012, VUME announced plans to try to monetize their business efforts.
Some where along the line, it appears that VUME started using Ryan Richeal of Play Deep Marketing & Media for IR services.
What we expect from here
With 30,000,000 free trading seed shareholder shares (purchased at a cost of $.0015/share) and another 8,229,700 shares not quite accounted for, it is hard to imagine that some kind of market awareness won't happen for VUME stock in the future. A lot of people stand to make a lot of money from their VUME stock especially at the current trading price of $.74/share.
If a paid promotion does start for VUME, I'll be surprised if it starts at the current price levels. Probably the stock price will come down some before any awareness campaign kicks off.
VUME looks like a business that will have trouble meeting its business goals. I don't see any significant revenues ever amounting for the company and the way that consulting agreements and arms length Promissory Notes are being structured it looks like insiders plan on banking big before 2013 is over probably abandoning most business efforts soon after that.