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Be Active Holdings Inc (JALA) – updated research stock report

05 Feb Be Active Holdings Inc (JALA) – updated research stock report

 

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Be Active Holdings Inc (JALA) suddenly came to life today first with some suspicious trading knocking the price down from $.55/share down to $.125/share then with some exciting speculation trading helping the price run back up above $.20/share.  JALA has only had 3 active trading days in its history before today.  On January 17, 2013 a small block took the price down from $1.20/share to $1.10 and yesterday a small block took the price down from $1.10/share to $.55/share.  Today we saw 3,374,779 shares trade sparking us to take a much closer look at JALA.

We first reported on Be Active Holdings Inc (JALA) back on August 22, 2012 while it was still called Superlight Inc (SUPU).  We recognized right away that the set-up of the shell made the ticker look like a future paid promotion in the making.  See our report here.

The following is a quick re-post of that information to get us up to date and ready to move on to recent events followed by more current details about the ticker.

 

Thanks for Alive again for helping put this together.   SuperLight Inc (SUPU) is following the classic 5 step pattern for a shell that has been set up for insider enrichment and promotion and came on our radar after recently performing a forward split. 4 out of 5 of the steps have been fulfilled.

#1 Business taken public with no revenues

SuperLight, Inc. was incorporated on December 27, 2007 in the state of Delaware.

December 27, 2007 (date of inception) through March 31, 2011 the company had no revenues and. incurred net losses of $27,324

SuperLight had zero employees at the time of the S-1 filing aside from the directors.

The Company submitted a Registration Statement on Form S-1 to the Securities and Exchange Commission to register 1,775,000 of its outstanding shares of common stock on behalf of selling stockholders.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7955183

The Registration Statement was declared effective on November 10, 2011.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8237292

The authorized capital stock consisted of 100,000,000 shares of common stock, par value $0.0001 per share with 6,225,000 shares of our common stock issued and outstanding as of May 23, 2011.

SuperLight offices located at 23A HaMe’eri St., Givatayim 53332, Israel.

Business Plan 

SuperLight's specific goal is to provide disposable baby diapers at a competitive and affordable price. They plan for sales to begin in Israel and envision selling the diapers in Eastern Europe as well.

At the time of the S-1 filing they intended to purchase privately labeled disposable diapers from one or more manufacturers in China. However, they had not yet entered into a supply agreement with a manufacturer.

Supposedly they had contacted the seven Chinese manufacturers listed below and have received initial price quotations from each of them.

Jinjian Anting Sanitary Products Co. Ltd.
Rockbrook Industrial Co. Ltd.
Baron Co. Ltd.
B&W Paper Products Co. Ltd.
Dongguan White Swan Paper Products Co. Ltd.
Guangzhou Suide Commodity Co., Ltd.
Nan’an Hengyuan Women and Children Products Co., Ltd.

They also supposedly had been in contact with numerous stores and distributors in Israel, but had not entered into any agreements any of them.

They planned to run print ads to advertise their products for resale.

Directors:

Mr. Zeev Joseph Kiper President, Treasurer and Director

from 2005 to the time of the S-1 filing Mr. Kiper has been the sole proprieter of Kiper Consulting, a real estate advisory firm in Israel.

Mr. Kiper intended to devote approximately 5-10 hours of his weekly business hours to SuperLight affairs. Dedicated President. 😉

Ms. Hana Abu Secretary and Director

Ms. Abu had worked mainly in collections for the previous 20 years leading up to the S-1 filing.

#2) Seed shareholders given shares for next to nothing 

Directors Shares:

On January 9, 2008, we issued 3,000,000 shares of our common stock to Mr. Zeev Joseph Kiper, our President, Treasurer and Director, for cash payment to us of $300 (.0001/share)

On July 20, 2009, we issued 1,000,000 shares of our common stock to Ms. Hana Abu, our Secretary and Director, for cash payment to us of $100. (.0001/share)

On April 12, 2010, we issued 450,000 shares of our common stock to Ms. Hana Abu, our Secretary and Director, for cash payment to us of $9.000. (.02/share)

The directors as a group owned 71.48% of the outstanding stock as of May 23, 2011.

Seed shareholders:

The S-1 registered 1,775,000 shares of common stock on behalf of the selling stockholders.

Pinhas Zvi Brim 50,000
Elhanan Ben Sosan 50,000
Shlomo Breska 50,000
Mordechai Frankel 50,000
Michael Dov Glick 50,000
Shlomo Gobi 50,000
Azriel Menachem Goldblatt 50,000
Naftali Yaacov Goldblatt 50,000
Reisel Goodwin 50,000
Uriel Moshe Goodwin 50,000
Israel Gura 50,000
Sara Rachel Heinrich 50,000
Karina Hlebnikova 25,000
Andrejs Hromisevs 25,000
Aryeh Jacobson 25,000
Meir Kazan 50,000
Keren Leumi Rubin 200,000
Rolands Liepins 25,000
Marina Mincenoka 25,000
Oleg Mincenoks 25,000
Jelena Mitjurina 25,000
Avraham Paskus 50,000
Natlija Petuhova 25,000
Sergejs Petuhovs 25,000
Andrejs Petuhovs 25,000
Shlomo Raphael Raphaelov 50,000
Margarita Redkina 25,000
Kristians Rukuts 25,000
Igors Semjonovs 25,000
Inga Trumpe-Kalnina 25,000
Aleksandrs Turlisovs 25,000
Moshe Vizel 50,000
Israel Waserman 50,000
Meir Waserman 50,000
Nava Waserman 50,000
Moshe Winberger 50,000
Moshe Chai Yona 50,000
Yaier Yousef 50,000
Hanoch Zilberferb 50,000
Evita Zvarte 25,000

TOTAL 1,775,000

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8201324

#3) Change in control

8k filed August 7, 2012

On August 7, 2012, Glenn Kesner was appointed to the board of directors of Super Light, Inc. and as its President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer.

Mr. Kesner has significant experience in branding, digital marketing, advertising and video content development and production. In 2010, Mr. Kesner served as the President, Chief Executive Officer and sole director of FTOH Corp. where he played a leadership role in the company’s management. Mr. Kesner served as the Chairman and President of Silver Horn Mining Ltd. (SILV.OTCBB) from December 31, 2010 through May 3, 2011. He was appointed to the board of directors of Silver Horn on February 4, 2010 and as its Chief Executive Officer on November 15, 2010. Mr. Kesner played a leadership role in Silver Horn’s management during his time at the company.

Also on such date, Zeev Joseph Kiper and Hana (Hani) Abu resigned from all of their positions with the Company immediately upon Mr. Kesner’s appointment.

Mr. Kiper resigned from the board of directors and as President, Chief Executive Officer and Treasurer of the Company and Ms. Abu resigned from the board of directors and as the Secretary of the Company.

Strangely enough in the 8k the shares owned by the previous directors are not mentioned, but one can only assume they transferred to Mr. Kesner, but we await further filings to see where the shares reside.

#4) Name and symbol change

Change of direction:

In connection with the management changes described above, the Company determined that it would explore additional business opportunities that are divergent from its current business line of marketing and offering private label diapers under the brand name "Super Light".

The company has been in informal discussions with several companies regarding acquisitions.

to be determined 🙂

#5) Forward split while all the shares were insider owned 

Changes to Capital Structure and the Forward Split

From 8k July 19, 2012 filed an Amended and Restated of Incorporation with the Secretary of State of the State of Delaware in order to increase the authorized capital stock of the Company to 550,000,000 shares consisting of 400,000,000 shares of common stock, par value $0.0001 per share and 150,000,000 shares of blank check preferred stock, par value $0.0001 per share.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8728700

From 8k filed August 17, 2012

August 1, 2012, the Company’s board of directors authorized a dividend, whereby an additional 20.2931229 shares of common stock, par value $0.0001 per share, will be issued on each one share of common stock outstanding to each holder of record on August 13, 2012.

The payment date of the dividend was August 17, 2012.

Strangely enough, in the 8k the shares owned by the previous directors are not mentioned, but one can only assume they transferred to Mr. Kesner, but we await further filings to see where the shares reside.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8784965

Current share structure after the split:

Shares Outstanding 126,324,548
Shares Authorized: 400,000,000
Blank Check Preferred Authorized: 150,000,000

seedholder free trading shares: 36,020,293

Conclusion:

SUPU is getting close to coming into play.  It is following the classic P & D pattern. Keep SUPU on your radars for possible merger/acquisition news and subsequent name and ticker change. Promotion should follow.  In this case we might not even see a  name and ticker change since the forward split has already happened.  Hard to say how successful a program it will be from where it stands now, but as the play develops all that should become clearer.

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Since that original research report a couple of major events have occurred.

1) Superlight Inc (SUPU) was renamed Be Active Holdings Inc (JALA)

2) Be Active Holdings Inc (JALA) entered into a merger/share exchange with Be Active Brands, Inc, a Delaware entity that manufactures premium quality low-fat, low-calorie, low-carbohydrate, vitamin and probiotic enriched frozen yogurt and products under the brand name of “Jala” as found on this website.

 

The Jala brand products pictures below consist of yogurt products that include frozen yogurt bars, frozen yogurt, and frozen yogurt sandwiches.

 

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According to the JALA website, those products can be purchased at the following retail stores:

 

Let's take a step back to analyze everything that has happened to get the JALA shell to the point:

 

Forward Split

When we last left the JALA shell in August, it had done a 20.2931229:1 forward split and had just assigned a new CEO to run the shell named Glenn Kesner.  

With the forward split and other corporate actions JALA had the following share count at the end of August:

Shares Outstanding 126,324,688
Shares Authorized: 400,000,000
Blank Check Preferred Authorized: 150,000,000
Seed shareholders - 36,020,291 shares (free trading) - costing $.001/share
Zeev Joseph Kiper - 60,879,368 shares - costing $300 ($.00004/share)
Hana (Hani) Abu - 29,425,029 shares - costing $9,100 ($.0003/share)

 

Name/Symbol Change

On December 28, 2012, the name of the shell was officially changed from Superlight Inc to Be Active Holdings Inc (JALA).

 

Merger/Share Exchange

On January 9, 2013, JALA entered into the merger/share exchange agreement with Be Active Brands Inc, a Delaware business entity incorporated on March 10, 2009.  The details of the merger/share exchange were as follows:

1) The Be Active Brands Inc shareholders will receive 29,502,750 shares of JALA stock

2) 3,852,403 shares of JALA stock were issued in a private placement.  2,026,316 of those shares were issued to pay off $385,000 in Notes owed to debtors of the Be Active Brands Inc entity, 1,826,087 shares were sold to private investors at a price of $.23/share raising $419,999.88.

3) All of the assets of Be Active Brands Inc (the Jala brand products) were transferred into the JALA shell.

4) The 90,304,397 shares owned by the previous management of the JALA shell when it was SuperLight were cancelled.

5) Glenn Kesler resigned and was replaced by the Be Active Brands Inc management team listed below

- Marc Wexler (CEO and Chairman)

- Saverio Pugliese (president and director)

- Joseph Rienzi (secretary and director)

- David Wolfson (CFO and director)

6) Marc Wexler was given a salary of $150,000/year

7) David Wolfson was given a salary of $80,000/year

8) Saverio Pugliese was given a salary of $80,000/year

 

The 29,502,750 shares issued to the Be Active Brands Inc shareholders were split up as follows:

Marc Wexler (CEO and Chairman) - 6,839,556 shares
Saverio Pugliese (president and director) - 6,839,556 shares
Joseph Rienzi (secretary and director) - 6,839,556 shares
David Wolfson (CFO and director) - 454,028 shares
Unnamed shareholders - 8,530,054 shares

 

Marc Wexler bio: Prior to Be Active Brands Inc, Marc Wexler co-founded and served as CEO of Silhouette Brands, Inc. from 1994 to 2004, a company specializing in manufacturing and selling fat free, novelty ice cream under the trade name "Silhouette" with the Skinny Cow logo (sound familiar).  Learn more about the history of Silhouette Brands Inc here. Between 2004 - 2009, Marc Wexler did consulting for various companies in the ice cream industry.

Saverio Pugliese bio: Saverio Pugliese co-founded Silhouette Brands Inc with Marc Wexler.  Like Wexler, Pugliese left Silhouette Brands Inc in 2004 to work as a consultant for various companies in the ice cream industry between 2004 - 2009.

Joseph Rienzi bio: Prior to Be Active, Joseph Rienzi served as Executive Vice President of Rienzi & Sons, Inc., a company specializing in importing, farming, production and distribution of Italian foods worldwide.

David Wolfson bio:  From July 2004 through the present time, David Wolfson, while partnering with Mr. Wexler and Mr. Pugliese, managed the New York offices of his CPA firm, Schulman Wolfson & Abruzzo, LLP. David Wolfson served as the in-house accountant of Silhouette Brands Inc. from 1996 to July 2004.

 

So basically Wexler, Pugliese, and Wolfson have done this all before with Silhouette Brands Inc.  This is actually a very good sign for the JALA shell and a great selling point for the ticker.

 

Current Share Count

Information in the 8K is conflicting because the last several financial reports clearly stated that the seed shareholders owned 36,020,291 shares and that there were 126,324,688 shares outstanding total yet in the 8K JALA claims that by cancelling the 90,304,397 shares owned by the former officers of the shell there would be 20,851,336 shares left owned by the seed shareholder of the company.  That makes the new share count look as follows:

- Authorized commons - 400,000,000 shares
- Authorized preferred - 150,000,000 shares
- Outstanding commons - 54,206,489 shares
- Seed Shareholders - 20,851,336 shares (free trading)
- Marc Wexler (CEO and Chairman) - 6,839,556 shares
- Saverio Pugliese (president and director) - 6,839,556 shares
- Joseph Rienzi (secretary and director) - 6,839,556 shares
- David Wolfson (CFO and director) - 454,028 shares
- Unnamed shareholders - 8,530,054 shares
- Unnamed Be Active Brands Inc debt holder - 2,026,316 shares (probably free trading)
- Private placement shareholders - 1,826,087 shares

 

More about the JALA Brand

The JALA website can be found here.  As already mentioned above they sell frozen yogurt products in a variety of grocery stores.   It is a real product and it can be bought at many locations.

JALA Brands are a real product, therefore Be Active Holdings Inc has real assets and real revenues.

 

But how good does the balance sheet look?

According the the financial statements provided in the JALA SEC filings Be Active Brands Inc came with:

$353,777 in assets which consisted of $131 cash, $260,958 in inventory, and $91,621 in accounts receivable.

$1,081,219 in liabilities which consisted of $408,000 in debt Notes, $308,073 in accounts payable, and $347,597 in accrued salaries

 

How are sales going?

Be Active Brands Inc had their best year in 2010 as demonstrated below:

2010

$877,705 in sales
$584,319 in sales costs
$293,386 in profits
$468,653 in operating costs
$175,267 in total losses

2011

$1,421,954 in sales
$1,506,921 in sales costs
$84,967 lost from sales
$1,176,117 in operating costs
$1,261,084 in total losses

2012 (through September 30th)

$1,582,063  in sales
$1,618,857 in sales costs
$36,794 lost from sales
$612,948 in operating expenses
$649,742 in total losses

 

Be Active Brands Inc has never had a year where they have earned enough in sales to cover their operating costs and for the past 2 years, the cost of their sales has been higher than the revenues earned.  Not a great sign, but at least sales numbers are on the rise which is a good sign.

 

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Conclusion

JALA is an extremely interesting ticker. 

On one hand we have an experienced management team with a real product and real business.  The business hasn't been real successful, but it hasn't been a disaster that has set the now publicly traded company up for tons of future dilution (at least not in the short term).

On the other hand, the way the shell was taken public and forward split has now set up seed shareholders with over 20,000,000 free trading shares making the JALA shell a huge threat for a future paid promotion.

It is quite the conflicting battle between good and bad.  Putting today's unusual action aside it would be hard to decide which way this shell might be headed in the future (paid promo vs legitimate business practices). 

Since I was already leaning towards paid promo today's action has me even more convinced that the shell could be setting up for some type of promotion in the future.  We've already seen many of the PSS members take nice size profits today buying in near the bottom and cashing out as the price ran up during the later part of the day.

If JALA is going to see a prolific promotion we'll probably find out soon.

 

 

 

 

2 Comments
  • nodummy
    nodummy
    Posted at 11:44h, 28 February Reply

    TA today confirmed that the float is 20.8 million as was stated in the recent 8K. Not sure how those other 15.2 million seed shareholder shares disappeared, but since the seed shareholders were almost certainly nominees holding the shares in name only and they are really controlled by insiders that can probably be linked to whomever ends up promoting this, I guess that is really just a formality.

    TA also said that the O/S is now 115m so the O/S has grown by 46M in the past few weeks.

  • nodummy
    nodummy
    Posted at 21:53h, 28 March Reply

    Marc Wexler resigned as the CEO today but will remain with the company as an employee with the same compensation

    http://www.sec.gov/Archives/edgar/data/1514514/000152153613000293/q1101045_8k-beactive.htm

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