Harmonic Energy, Inc. (OTCPK:ASUV) has followed the five basic steps for a shell set up for insider enrichment.
Business taken public with no revenues.
Seed shareholders given shares for next to nothing
Change in control
Name and symbol change
Forward split while all the shares were insider owned
Here is how Harmonic Energy, Inc. was set up to enrich the Insiders…
Harmonic Energy, Inc. was or originally incorporated in the state of Nevada on April 30, 2007 as Fairytale Ventures Inc. The CEO Anusha Kumar was given 4,000,000 restricted shares for $4,000
1,590,000 shares of common stock at a price of $0.0075 per share were sold to a total of twenty-nine (29) purchasers on July 27, 2007 for a total of $11,925.
Here is a list of those shareholders:
First forward split"
Effective July 24, 2008 our shareholders and board of directors approved a forward split of the company's common stock on the basis of 1.84356289 shares for each share issued and outstanding. The total number of authorized shares has not been changed.
This left Anusha Kumar with 7,374,251 restricted shares and the seed shareholders with 2,931,264 free trading shares.
Another forward split, this time with a name change:
Effective May 11, 2009, pursuant to the approval of our shareholders and board of directors, the company has changed its name to Aviation Surveillance Systems, Inc. Also effective May 11, 2009, our shareholders and board of directors approved a forward split of the company's common stock on the basis of 1.6 shares for each share issued and outstanding. The total number of authorized shares has not been changed.
The new ticker symbol became ASUV.PK.
After the 1.6 forward split, it left the share count like this:
Anusha Kumar with 11,798,803 restricted shares
Seed shareholders with 4,690,022 free trading shares.
Change of Power
On March 15, 2010, Ms. Anusha Kumar, our President, Chief Executive Officer, Chief Financial Officer and sole director, agreed to sell all of her 11,798,803 shares of common stock in the company to Alp Investments, Ltd. Following the private issuance of common stock described in Item 3.02, above, Alp Investments, Ltd. now holds shares of common stock which constitute approximately 91.43% of our total issued and outstanding stock. Ms. Kumar transferred her shares in exchange for total consideration of $20,000. The source of the consideration paid to Ms. Kumar was the existing funds of Alp Investments, Ltd. The sale of these shares was exempt from registration under Section 4(2) of the Securities Act.
Item 3.02 - Unregistered Sales of Equity Securities
Following the change in control discussed in Item 5.01, below, we closed an issue of 38,235,294 shares of common stock on March 15, 2010 to Alp Investments, Ltd. Alp Investments, Ltd. acquired these shares in exchange for $65,000 at an approximate price of $0.0017 per share. These shares were issued pursuant to Section 4(2) of the Securities Act of 1933 and are restricted shares as defined in the Securities Act. We did not engage in any general solicitation or advertising.
In connection with the sale of her controlling interest in the company, Ms. Kumar appointed Mr. Eden Ho to the board of directors and then resigned from all officer and director positions,
Here is the new share count:
Millcove Management, Inc. is the shareholder of Alp Investments, Ltd. Michele Celestine, Kavorn Kyte-Williams, and Jan Moran are the Directors of Millcove Management, Inc. In their capacities as the Directors of Millcove Management, Inc., these individuals exercise voting and investment power with respect to the securities held by Alp Investments, Ltd.
Here is the website for Milcove Management Inc. Take a look at the addresses of the company's offices (of course all off shore).
Another thing I found interesting is that the company used the same picture for every person on the meet our team page
Another Name Change
The company's board of directors and shareholders have, effective July 26, 2010, authorized a change in the name of the company to "Harmonic Energy, Inc." A copy of the Certificate of Amendment describing the name change filed with the state of Nevada.
Ownership at this point:
Change of Ownership
On November 16, 2011, Jamie Mann acquired a majority ownership of our issued and outstanding common stock by purchasing 39,784,097 shares of common stock from Alp Investments, Ltd. and 10,000,000 shares from Mobiliare, S.A. Mr. Mann acquired these shares in exchange for a total of $49,784. Following this transaction, Mr. Mann now holds 91.39% of our total issued and outstanding stock.
Change of Power
On December 16, 2011, our board of directors appointed Adrian R.J Smith, Jamie Mann, and Hiro Tanaka to serve on the board of directors. In addition, our board of directors appointed new executive officers as follows:
Jamie Mann - Chief Executive Officer, Chief Financial Officer, President, Secretary, and Treasurer
Adrian A.J. Smith - Chairman of the Board of Directors
Immediately following these appointments, the board accepted the resignation of Dan Forigo as our former CEO, CFO, President, and director. In addition, the board accepted the resignation of Eden Ho as our former Secretary and director. There were no known disagreements with Mr. Forigo or Mr. Ho regarding our operations, policies, or practices.
Share Count Now:
On February 22, 2012, an officer of the company surrendered to treasury for voluntary cancellation, 40,000,000 shares of common stock of the company.
On March 12, 2012, the company adopted a forward 5 for 1 split of the issued and outstanding common stock of the company.
So Jamie had 40m of her shares cancelled, leaving the company with 14,474,119 shares outstanding, which were then split 5 for 1. That resulted in 72,370,595 shares outstanding. Which does not add up. Jamie's shares went from 49,784,097 to 9,784,097 pre-split (48,920,485 post-split)
The June 14th, 2012 10Q clears that up:
State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 63,037,262 as of June 12, 2012.
We now discover that earlier 10Q had a typo:
On February 22, 2012, a shareholder of the company voluntarily returned 42,000,000 shares of common stock to treasury for cancellation instead of 40,000,000 which was stated in previous filing.
On March 12, 2012, the company authorized a 5:1 forward stock split.
So that leaves Jamie with 7,784,097 pre-split shares (38,920,485 post split) and the company with 12,474,119 shares out pre-split (62,370,595 post split).
The latest 10Q has another typo, which states:
On February 22, 2012, a shareholder of the company voluntarily returned 210,000,000 shares of common stock to treasury for cancellation.
So now the company has stated that on February 22, 2012 shareholders of the company voluntarily gave up 40,000,000 shares.
Then stated 42,000,000 ( this adds up).
... And now states 210,000,000.
What a joke.
There are 23,450,110 shares in original seed shareholders hands at .0005/share. These shares were purchased for total of $11,925. At these levels ($1.00), those shares are worth $23,450,110. In my opinion Harmonic Energy, Inc. is set up for one purpose and one purpose only and that is to enrich the insiders.
No surprise that a stock promotion followed. Lets see how much interest there was in Harmonic Energy, Inc. prior to June when the first wave of the promotion started:
Seems like there was 0 interest and ASUV never traded,
How can insiders turn those shares into cash if there are no buyers? They can't. That's why they hire stock promoters to bring in buyers.
So why all the sudden interest in ASUV starting in June?
See the first promotional page for Harmonic Energy, Inc. here. A price target of $6.50 is laughable.
Scroll all the way to the bottom for the important part which is the disclaimer. They were paid 150k by Mondo Marketing Inc for shareholders of ASUV who may or will sell their shares.
This page is set up to bring in buyers so Insiders can cash out while investors get left holding the bag.
Looks like the insiders have more shares that need to be sold, so in November another pump page went up- see here.
This one predicting ASUV will go to $7.00 a share. Laughable.
Now stroll to the bottom to the important part (text highlighted in picture below)
Harmonic Energy (hereafter "ASUV" or the "Company"), the Company featured in this issue, appears as paid advertising. Wilkerson Marketing has paid six hundred thirty thousand dollars to enhance public awareness for ASUV. A total sum of ten thousand dollars has been paid to Mondo Marketing Inc from a shareholder(s) of ASUV who may or will sell shares of the feature company at or about the time of this mailing. (Emphasis added)
Promotion budget got boosted to $630,000 to send out over hyped mailers about Harmonic Energy, Inc. to increase buying so the insiders can sell to you. Eventually the investors will be the ones holding the bag. ASUV already showed the first sign of weakness on the first big drop from $1.50 to .60 . It has bounced nicely since, but I believe when the next wave of selling from the insiders happens, this will make its way back to .60 and below.
There is now confirmation of stock promotion in the U.K. on Harmonic Energy, Inc.
A shareholder in Harmonic Energy (OTCPK:ASUV) has spent considerable sums in recent weeks to send out a missive to tens of thousands of U.K. investors headlined "the one stock you must own before the New Year" with bold claims about how the shares could gain 3200%. In very small print, it is noted that the shareholder is himself looking to sell the shares. Since the company is, according to the latest SEC Filing of December 14, technically insolvent, yet at $1.05, is capitalized at $66 million, this promotion is misleading in the extreme. But it has worked, in that the shares have been heavily traded and have gained 20 cents in the past two weeks. If you hold the stock, this is your chance to sell. Grab it."
Read rest of that article here.
Always think twice when getting stock recommendations in the mail or by email. They always have a motive and it's usually not for your benefit. They even outline in the disclaimer that they have been paid to send out the over-hyped mailers so shareholders can sell. Think about it, if the company was legitimate and had a bright future, why do they need to hire stock promoters to bring in buying so they can cash out immediately?
Remember, never invest in a pump and dump.
Disclosure: I am short OTCPK:ASUV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.