19 Jun JUMT – an empty shell pumped on lies
JUMT gets pumped
Yesterday, Juma Technology Corporation (JUMT) soared 700%--from $0.0025 to $0.02—for no good reason. On Monday, it hadn't traded at all, but last week saw fluctuating prices and significantly higher volume that the stock had enjoyed in a long time. Frontloading, perhaps?
JUMT's recent chart is uninspiring, to say the least.
Why the sudden excitement? Because “news” from 2011 and 2012 was suddenly posted on Investor's Hub and at least one social media site. The pump was prepped when HDOGTX, a popular IHub member, posted on 11 June that “Nectar Holdings got all the intellectual prop from former JUMT, the Fund got control of the Shell and then formed Nectar as the vehicle to place into the public co... this was done within last 6 months~.”
HDOGTX—who can be identified as Harry Drought, thanks to his self-promotion on an old Twitter account—is a Texan involved in the real estate business. His insistent advocacy of JUMT escalated on Monday, when he informed current and prospective shareholders that what they “own now” is a business called Nectar Services Corp, which specializes in converged network monitoring. Sounds exciting, but it's the wrong company. The “Nectar” in question is called Nectar Holding Inc. As will be seen, the two are related, but not in the way some JUMT shareholders would like to believe.
How did this confusion arise? From old SEC filings.
First, a very brief history of JUMT. It began as a cosmetics company, about which the less said the better. In 2006, the cosmetics company consummated a reverse merger transaction with Juma, which was in the converged communications business. “Converged communications” are data and voice communications carried over a single IP network. Nectar Services, formerly called AGN Networks, was acquired the same year, and became a wholly-owned subsidiary of Juma.
In 2007, JUMT began borrowing from the Vision Opportunity Master Fund, which frequently lends to over-the-counter issuers. The financing involved convertible preferred stock, warrants, and convertible notes. The fund's sister company, Vision Capital Advantage Fund, lent its own money beginning in 2009.
In 2009, the stock reached a high of $0.30; in 2010 the best it could manage was $0.06. By early 2011, it was having trouble staying above a penny and a half, and had become extremely illiquid.
It was losing money, and debt was mounting. In May 2011, the company threw in the towel, and filed a Form 15-12G to relieve itself of the obligation to file reports with the SEC.
A few months before JUMT filed its Form 15, it arranged to sell some of its assets to Carousel Industries of North America. Juma would continue to operate under the name of its sub, Nectar Services. Oddly, on 28 March 2011, Carousel issued a press release claiming it had completed its “acquisition of Juma Technology,” which certainly gave the impression that it had bought the entire company. The sale did not work out well. On 27 July 2012, Nectar Services and Juma sued Carousel for copyright infringement; on 31 August, Carousel sued Juma, citing a contract dispute.
Why the pump?
There is no real reason for the sudden urgent need to promote JUMT, except that Drought recently discovered that one of the Vision funds was also invested in TechnoConcepts (TCPS), another of his favorites. There is no news for Juma, nor are there any new filings.
There are, however, some old filings, which have been misinterpreted. Much is being made of a Schedule 13D from 28 July 2011, in which the Vision funds claim 83.2 % beneficial ownership of the company:
The Master Fund and VCAF, collectively, (i) own 1,116,705 shares of Common Stock, (ii) have the ability to acquire an additional 224,195,434 shares of Common Stock through the exercise or conversion of derivative securities and (iii) thus beneficially own 225,312,139 shares of Common Stock, representing 83.2% of all of the Issuer’s outstanding Common Stock. The Investment Manager and Mr. Benowitz (and the General Partner with respect to the shares of Common Stock owned by VCAF) may each be deemed to beneficially own the shares of Common Stock beneficially owned by the Master Fund and VCAF. Each disclaims beneficial ownership of such shares. The foregoing is based on 46,468,945 shares of Common Stock outstanding as of March 24, 2011, as reported on the Issuer’s Form 10-K filed on March 30, 2011.
Juma must have been struggling on, despite the filing of the Form 15, but what happened over the next year is unknown, as the company submitted no reports to OTCMarkets, and made no announcements. On 31 December 2012, JUMT filed an 8-K reflecting events that had transpired on 26 October 2012. In it, the company explained that management had resigned, and more:
On October 26, 2012, Vision Opportunity Master Fund, Ltd., Vision Capital Advantage Fund, LP and Vision Capital Advisors, LLC (collectively, the “Creditors”) completed the strict foreclosure of all of the assets, tangible and intangible, including patents, copyrights and trademarks (the “Assets”), of Juma Technology Corp. (the “Company”), in exchange for the cancellation of all debt in the aggregate principal amount of $20,033,780.53, together with interest accrued thereon, and fees, costs, expenses and other charges payable by the Company to the Creditors. The Creditors held valid and perfected first-priority liens upon and security interests in all of the assets of the Company. Upon the effectiveness of the foreclosure, the Creditors transferred the Assets to Nectar Holdings, Inc.
Juma has not been heard from since. (It's a wonder they were heard from then; their Edgar codes should have been deactivated when they filed the Form 15.) Yet the company's enthusiastic new supporters appear to believe the “news” revealed to them in recent days is somehow good.
The reality is that the Vision funds foreclosed on all of Juma's assets, and transferred all of those assets to a new company called Nectar Holdings, Inc., formed in Delaware on 4 October 2012.
JUMT is now an OTCMarkets Pink No Information stock. It has no officers, and cannot be operational, as its assets were stripped and moved to the holding company. One of those assets would have been Nectar Services, which, as noted above, still exists.
Juma is dead and gone. The Vision fund presumably still own 83.2% of the shell, but they have indicated no interest in doing anything with it. Perhaps they have other plans for Nectar Services and Nectar Holdings.
JUMT shareholders have no financial interest in the the new company; they own stock in the defunct Juma. Some, it seems, want to buy more, for reasons unapparent to those who've read and understood the 31 December 8-K.
The first week of June, the SEC suspended trading in 61 penny stocks. All of them were completely dark companies. None was a delinquent filer; they'd traded on OTCMarkets' Pink No Info tier for quite awhile. The agency took this action to ensure that they wouldn't be hijacked and promoted. They returned to trading last Thursday, on the Grey Market. No one would hijack a Grey shell.
"Stock manipulators crave empty shell companies that they can use to conduct pump-and-dump schemes and line their pockets with illicit trading profits by taking advantage of unsuspecting investors," said Andrew J. Ceresney, Co-Director of the SEC's Division of Enforcement. "We will aggressively suspend trading in such empty shells to take away a tool of their trade and help rid our markets of fraud."
If the Vision funds, with their majority interest, don't keep an eye on JUMT, it could become one of those hijacked stocks.