02 Feb YaFarm Technologies Inc (YFRM) – research report
YaFarm Technologies Inc (YFRM) went public way back in 2007 with 10,000,000 outstanding shares. During the next 5 years not a single one of those shares traded.
The 10,000,000 shares were broken up as follows:
6,500,000 shares were issued to the founders of the company at a price of $.001/share raising $6,500. Those shares were split up as follows:
- Columbia China Capital Group, Inc (which is run by the original CEO - Hong Zhao and her husband, James Tie Li - 5,500,000 shares
- The Lebrecht Group, APLC (which was the attorney that took the shell public) - 500,000 shares
- CH Capital, LLC (which is run by Mark Stewart) - 500,000 shares
** 129,626 of the shares originally given to Columbia China Capital Group, Inc went to Andrew Han
1,000,000 shares were issued for the acquisition of YaFarm Group LLC. Those shares were split up as follows:
- Zhiguang Zhang - 500,000 shares
- Jie Gheng (wife of Zhiguang Zhang) - 500,000 shares
2,500,000 shares were sold in a public offering for $.03/share to 43 seed shareholders (mostly friends and family of Zhou). The largest shareholder from this group was Andrew Han who after the offering owned 1,296,296 shares.
For the next 5 years, YFRM was a New Jersey-based web development and web hosting company offering a broad range of business-class website development and web hosting products and services for small and medium-sized businesses offering one-stop shopping web solutions for small and medium sized companies, including web development, web hosting, website maintenance and business image consulting services. Here is an archived version of their old website which is no longer active.
Revenues for YFRM quickly declined to nothing:
$19,302 in 2006
$9,807 in 2007
$0 in 2008
$0 in 2009
$0 in 2010
$0 in 2011
YFRM survived on money borrowed from Columbia China Capital Group, Inc until the shell was sold off to new ownership on December 14, 2012. Brian Hermenze and Cody McDowell took over control of the shell.
Brian Hermenze is from New York and has made a living as a private investor. In the past he was a seed shareholder for 2 shells - Wine Purveyors International, Inc which never made it public and Benacquista Galleries, Inc which now trades as Vibe Records Inc (VBRE). Both Wine Purveyors International Inc and Benacquista Galleries Inc were James Price shells using attorney Jonathan Dariyanani, Esq. (husband of Krystal Ball). James Price runs Aero Financial which has a reputation of taking money from public shells in exchange for services then ripping off investors by using the shells for pump&dump schemes. Other James Price/Jonathan Dariyanani shells include PAPA, FRFS, SYAI, PEIW, UCHB, and WHIO. Learn more about James Price, Jonathan Dariyanani, and Krystal Ball in this very interesting report.
Other James Price backers included a group named in SEC litigation for an illegal share selling scam that they ran on Greenstone Holdings Inc (along with dozens of other shells that did not show up in SEC litigation). This group includes - Frank Morelli III, Joe Overcash, Kelli Myers, Richard Muller, Dan Starczewski, Thomas Pierson, Dominic Martinez, Ashley Martinez, and Dan Motsinger (all seed shareholders in Wine Purveyors International Inc and Benacquista Galleries Inc). See the Greenstone Holdings Inc Complaint here.
Is Jim Price involved in YFRM now? I have no evidence that he is. I was only pointed out the type of individuals that Brian Hermenze came up through the ranks associated with.
Cody McDowell is fresh out of college - a recent graduate of Colorado State University (a college with quite a few former graduates involved in some pretty shady penny stock dealings).
Last Reported, on September 30, 2012, the YFRM shell owed $117,532 in principal and $4,993 in interest ($122,525 total) to Columbia China Capital Group Inc.
We have not been told yet if those debt Notes will remain on the balance sheet.
YFRM is now a non-SEC reporting pink sheet company after a Form 15 was filed for the shell to allow it to go dark back in July of 2012. This will make YFRM a less trust-worthy stock to follow moving forward as disclosure regulations are much less strict and OTC filings are not regulated.
We have also not been told yet how many shares Brian Hermenze and Cody McDowell acquired to take control of the shell, but we do know that there were only 6,370,374 shares restricted. (The shares owned by Columbia China Capital (5,370,374) and the shares owned by Zhiguang Zhang and his wife (1,000,000)).
The other 3,629,626 shares were free trading and probably not available for sale nor would they need to be available for Hermenze and McDowell to gain majority control. Hermenze and McDowell could have gained majority control of the shell simply by obtaining the 5,370,374 shares owned by Columbia China Capital and that probably is what happened.
After taking control, Hermenze and McDowell immediately forward split the stock by doing a 4:1 stock dividend which as of yesterday was amended to become a 5:1 stock dividend.
That makes the new outstanding share count 50,000,000 shares, between 18,148,130 and 23,148,130 of which are now free trading.
This could make YFRM an interesting play moving forward and since last reported, 6,481,480 of those free trading shares are owned by one individual - Andrew Han - a paid stock promotion is certainly a possibility in the future.
YFRM saw its first ever trading days recently with 45,000 shares traded at $.05/share back on 11/16/12 and a 10,000 share block traded at $.06/share on 1/30/13.
I have a feeling we will start seeing more volume for YFRM soon.
We should start to find out what Brian Hermenze and Cody McDowell have planned for the shell soon. It will be interesting to see how the holders of those 18,148,130 to 23,148,130 free trading shares let this one play out moving forward.