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  • Go Big, Hold For Dollars!: GBHD

    Go Big, Hold for Dollars!: GBHD

    There is no mistaking that Global Holdings Inc. (OTCPK:GBHD) is actually a wolf in sheep's clothing… Management has a clear vision for the company which they have been executing extremely well. At the moment it would appear as though all roads lead to Rome and despite the market poorly reflecting the value and forward momentum of the company, I've had no problem justifying my aggressive accumulation of shares making this one of my most ambitious accumulations of an OTC stock EVER. After thorough investigation of this company and investing in its diversified holdings I felt it necessary to spread the word to the public at large. At present, the company's primary revenue stream is derived through Wellness Juices which has been well received by the market and its consumers.

    The company is actively growing through acquisitions; they currently have a number of outstanding letters of intent for strategic market growth. Many of their existing business units are just beginning to bear fruit. They have little debt (booked at just over $550K), strong cash on hand and revenue is growing exponentially. Not mentioning the retirement of 151 million shares (which represented a retirement of almost 40% of the outstanding shares!!!). With a miniscule float of just over 19.5 million, the market has shown little love for this powerhouse of a company.

    The Company history and continued developments

    Founded in March 1984, originally known as Flying Ace, Inc., Global Holdings has undergone many changes through the years in regards to the company name, its management and its business model (which fall out of scope with the business at hand). Up until last year they were known as Worldwide Food Services, Inc. and traded under the ticker WFSV.

    They acquired Mini Dollar Stores, Inc. in March of 2009, which offered over 200 fast-moving items to supply the National Blind Enterprises Co-op and Veterans hospital facilities and gift shops. By June, they had designed two Mini Dollar Store vending machines. The 45-unit and 65-unit machines will be made available to vendors throughout the National Blind Enterprises Co-op. At the moment, the company has a fleet of just under 50 vending machines in the field which offer a high ROI and profit margins, they have plans to grow their numbers over time and also service 2 VA hospitals with plans to expand as opportunities arise.

    Also in June 2009 the Company had also designed nine Emergency Food Kits, making use of all of the nutritional food groups and ranging from 805 to 1000 calories per kit and subsequently signed agreements to supply Emergency Food Kits to the Department of Defense and to FEMA. They still have outstanding agreements to provide food kits with water and ready to eat food in the event of future natural disasters anywhere across the nation

    They then acquired Eagle Rock Ventures, Inc. (ER Ventures). ER Ventures will become the main consulting group for the Company and will be headed by one of the founders of WWFS.

    In Aug 2009 the company changed its ticker to WFSV to better reflect its name. They broadened their product lines to include a line of 'Green' products to produce environmentally-friendly cleaning products. The market segments that hold the most potential for these products are hospitals, nursing homes, and schools. There is an overwhelming demand for non-toxic cleaning fluids and supplies within these organizations. As well as offer non-food items such as NBA items, novelties, T-shirts and caps, and selected electronics as part of a strategy to consolidate existing customer purchases, including the National Blind Enterprises Co-op and the Mini Dollar Store segments. They also expanded into the vitamin, mineral, and supplements market (which is also distributed by Veteran Consulting Group, Inc.), which specializes in nutritional foods and supplements for the military. They also have the rights to market the "Total Wellness" products to GNC, Vitamin Shoppe, Walgreens, CVS, RiteAid as well as to large chain food operations such as Krogers, Wakefem, Stop&Shop, Publix and Wagmans. Many of the products offered can be found in any of the 100+ Navy Exchange locations.

    By late December 2009 the company announced that it was officially debt free

    In April 2010 the company completed its acquisition of Veterans Consulting Group, Inc.; afterwards it had developed over ten major product categories to be introduced to commissaries, exchanges, and VA retail outlets. These categories include small and large electronics, cosmetics, health and beauty aids, specialty items, and seasonal goods. Followed by its acquisition of Global Holdings Inc. in May of 2010

    By Sept 2011, Worldwide Food Services completed its acquisition of Wellness Waters Inc. which holds several formulas that enhance personal well-being. Though the product has seen little success thus far, management believe there is great potential here with private label deals in negotiation and expectations of national rollouts to begin in 2015 with sports endorsements in the works as well.

    They then completed an acquisition of Disaster Response International, Inc., a provider of water and temporary shelter for catastrophic events. The merger into Worldwide Food Services will allow DRI to also supply bulk rice and flour.

    The company changed its business model in April 2012 in which they will no longer inventory food supplies for the Emergency Food Kits program due to the expiration dates of many of the ingredients. Worldwide has joined forces with several national distributors who will inventory and ship the products on a 24-hour basis

    They completed their acquisition of Smart Diet Rx, Inc. in July 2012 which is aimed at reducing hospital re-admission rates due to poor follow-thru on given nutritional standard requirements of heart, cancer, diabetes, obesity, and high blood pressure patients and individuals.

    In Aug 2012 they announced the Company's Commodities Division in Mexico City has signed a 3-year production contract for garbanzo beans and oregano. This year-round growing agreement has two 3-year options. The goal of the joint venture partners is to increase production from 80 cargo containers to 200 cargo containers a month.

    They acquired their current flagship Wellness Juice Inc. in Nov 2012. Wellness Juices consist of over 20 nutrient-dense greens, sprouts and vegetables rich in chlorophyll, trace minerals, anti-oxidants, enzymes and probiotics that will provide fundamental nutrition for the body to support healthy digestion, detoxification, immune system, blood sugar levels and metabolism. Organic cereal grasses such as barley, alfalfa, oat and wheat are some of the most nutrient dense foods on the planet.

    In Nov 2012 the Company received orders for 900,000 Emergency Food Kits ("EFKs"). Worldwide's subsidiary Disaster Relief International shipped 400,000 EFK's to the New Jersey and New York disaster areas of Hurricane Sandy and 500,000 EFKs for Guatemala in the aftermath of the area's recent earthquakes.

    They completed the acquisition of Longevity Logic, Inc. in Aug 2013, a company comprised of doctors, pharmacists, and nutritionists who develop safe, all-natural, and therapeutic-strength supplements clinically proven to provide effective cardio-vascular support without the harmful side effects of medications. In conjunction with Smart Diet RX, Longevity Logic, Inc., Lean Life-Styles, Inc. and Extend Your Life Program, Inc. at present look to have a number of developments in the works for this subsidiary as well. They are in negotiations with one of the top 3 national pharmacies to become there vendor of choice to help provide better quality of life, working with patients to evaluate nutrition along with current and future medication needs.

    They retained the services of JP Anderson Ltd. In September of 2013 to help the company develop international sales and distribution channels as well as assist with potential merger and acquisition targets. JP Anderson will work with management to cultivate business relationships in Europe, Southeast Asia and West Africa.

    The company officially changed its name to Global Holdings Inc. on October 29th, 2013 to better reflect its ongoing business model

    Merle Ferguson became the Company's CEO and President, whereas Susan Donhue steps down from those positions as of January 3, 2014. Mr. Ferguson brings a great deal of corporate and industry knowledge to the business along with a number of strategic network connections and leveraged assets

    At a Glance

    Global Holdings Inc. has multiple sub business segments which mostly pertain to the food and beverage industry. Its foundation was built upon various blind organizations that have first rights to the vending and food service in all federal and state buildings, airports, postal facilities, and military bases by building a national buying co-op program known as National Blind Enterprise Co-op (providing competitive pricing and efficient distribution to more than 3,400 visually impaired vendors across the United States). The business was to fill a need for visually impaired business people who were purchasing food and beverages individually at higher prices than were called for based on their total volume (this is because individually owned and operated shops simply don't have the buying power of competing large named enterprises). GBHD has established a national marketing and distributions channel to fulfill the needs of many.

    The company has generated a sizable portion of its revenue thus far via their Mexican subsidiaries through the distribution of Garbanzo beans.

    Another promising subsidiary is Deli-on-Wheels, Inc., the company currently has 5 trucks on the road in the greater New Jersey area with short-term plans to expand beyond the region expected to be funded from other revenue streams (in other words, they have no need for external funding or other dilutive or toxic financing). They also have apps in development for the food truck industry at large which has generated a lot of interest which vendors will pay for the service which would allow trucks to be deployed to neighborhood and community events, corporate events with many options including corporate discounts and sponsorship and allow customers to locate mobile food trucks throughout the area.

    The company has plans to acquire farms and farm land in the near future in preparation of offering the first of its kind "from the farm, to your plate" program, leveraging further its bulk buying power and national distribution chains. I feel as though this is a large emerging source of revenue for the company which has yet to be realized or factored into the business as a whole which I expect to be one of the driving forces of this business in the near future.

    Telling statements from the company were disclosed in their financial statements as seen below;

    The short-term (one year) potential is in the hundreds of millions in revenues. Longer term (3-5 years), this segments will be a multi-billion dollar category. The profits due to mass purchases, rebates from major manufactures (already in place), and synergies from tie-in partners such as custodial companies to service these locations is proportionate to the revenue growth.

    Another thing I like to see in a business is telling signs of a larger plan in the form of synergy as depicted from the statements below, the company plans on leveraging their buying power across different revenue streams;

    We are currently formalizing relationships with "Cash and Carry" and "Dollar Store" entities, as well as ice cream and nut companies. Another opportunity is a national co-op for mobile vendors, especially related to paper products. The project will commence as soon as we finalize pricing form Chinese and Indian manufacturers.

    There are hundreds of independent distributors, manufacturers and retailers in GBHD's home base, New York City Metro area alone; tens of thousands in the USA. As power becomes consolidated to the few national firms, the regional players become squeezed with high transportation and product costs, creating lower volume and more management problems. The owners are forced to merger with the big firms where they loss control of these family businesses.

    GBHD's strategy is to let these owner-operators who have withstood economic cycles in good shape continue their business plan, with guidance and financial support from corporate. GBHD's purchasing power, marketing skills, and complementary businesses will generate efficiencies and increase revenues for these firms

    GBHD was created because of a multi-billion dollar potential with the Federal and State governments and their blind merchants programs. This led to relationships with large food and beverage manufacturers and distributors. In turn, many of these well run organizations desired to be part of the larger entity, Eagle Rock Enterprises, Inc. In February, 2012, GBHD entered into a multi-lateral agreement with several national suppliers to develop Condition-Specific/Disease-Specific Meals aimed to reduce the 15% hospital re-admission rate due to poor follow-through on given nutritional standard requirements of heart, cancer, diabetes, obesity, high blood pressure, etc. patients and individuals.

    Over the past 2 years, the company has made a number of acquisitions through the issuance of 147.2 million shares valuing just under $8 million in acquired assets plus the yet to be disclosed acquisition of Wellness Juice;

    Wellness Water inc. was acquired for 25 million common shares issued at 0.05/share ($1.25 million)

    Disaster Response International was acquired for 10 million common shares issued at 0.05/share ($500,000)

    Smart Diet Rx Inc was acquired for 30 million common shares issued at 0.05/share and an additional 10 million shares issued at 0.10/share ($2.5 million)

    Cedar Barista S.A.(Mexico) was acquired for 35 million common shares issued at 0.05/share ($1.75 million)

    Certal S.A (Mexico) was acquired for 35 million common shares issued at 0.05/share ($1.75 million)

    Trade Exchange International was acquired for 2.2 million common shares issued at 0.10/share ($220,000)

    Food for thought

    Interestingly enough, our CEO Merle Ferguson is also the CEO of Global Enterprises Group, Inc. (OTCPK:GLHO), there is nothing special or unique about this, but in consideration of their business model highlighted below, combined with GLHOs recent LOI (Letter Of Intent) to acquire JP Anderson Holding Corp.

    "Global Enterprises Group, Inc. seeks international and domestic opportunities in trade and finance as it relates to commodities, manufacturing and technological services sectors. The Company's key objective is to open trading and marketing routes in under-served, but growing domestic and international markets in these industry sectors."

    Further considering the subsidiary of JP Anderson Holding Corp. (JP Anderson, Ltd.) which appears to coincide nicely with the direction of GLHOs business model (as highlighted below) and coincidentally began to offer its services to Mr. Ferguson's other venture (our illustrious GBHD), one could ponder the intent of the acquisition set forth by GLHO

    JP Anderson, Ltd., is a licensed Broker Dealer which intends to be the World's premier boutique investment banking, securities and investment management firm focused on providing financial advice on individual wealth management, mergers, acquisitions, restructurings, financing and capital raises to a global client base including individuals, corporations, partnerships, institutions and governments.

    Taking this thought one step further; there is another piece to this telling puzzle. When reviewing the registration of Global Enterprises Group Inc. as seen here, you may notice a couple of noteworthy names such as the Directors William Anton & James Price.

    Dr. Anton was inducted into the Army Ranger Hall of Fame, is a lifetime member of MENSA, and is the Disabled American Veterans (DAV) Department Adjutant in Nevada (basically, the CEO of the organization). This is how I believe Merle has obtained the connections to the VA distribution side of the veterans consulting group business. The below is a short biography of his accomplishments;

    Dr. William Anton has spent the last five years with World Technologies Associates implementing satellite communications with Internet service to Eastern Europe and arranging international financing for these projects. Prior to 1995, Dr. Anton was a professor of Management and Marketing at Schiller International University in Heidelberg, Germany. From 1970-1990 Dr. Anton served in the United States Army in numerous command and staff positions, which included tours in Europe, the Orient, Central and South America, and the United States. His last assignment before retiring was Division Chief, Directorate of Plans and Policies, at the National Security Agency. This assignment involved briefing the Chairman of the Joint Chiefs of Staff, the Secretary of Defense, and numerous Congressmen on the implementation of worldwide plans and policies.

    James Price also coincidentally served in the U.S. Army, and has had an active and illustrious career, but in regards to his role in the greater picture here, we can see he's been around GLHO & GBHD for quite some time.

    He's been a director at GLHO since January 2014, but has been actively been working with management and consulting with them ongoing for the past 5 years. We also know GBHD retained the services of his company JP Anderson Ltd in September 2013 and interestingly enough if you perform a WHOIS on GLHOs website, you will notice it was registered on June 11th, 2014 by none other than James Price just 6 days prior to the announcement of the acquisition of JP Anderson by GLHO. Interestingly enough, this is not the 1st step in his webbed ventures with the companies. GLHO acquired another of Jim's founded entities GreenZone Ventures as of June 12th, 2014. It would appear as though Mr. Price has deep roots with both Merle Fergusons companies with no plans of leaving; he will be an invaluable member to the growth of the "Global" family members in the future to come. The below is a short biography of his accomplishments;

    Mr. Price has 25 years of experience in numerous facets of the financial services industry, wherein he has developed an expertise in finding small, underfunded companies and building them up through investment banking and strategic consulting. Mr. Price himself is perhaps best described as a true entrepreneur. After attending college at Eastern Washington University, in Washington State, Mr. Price served 3 years in the U.S. Army. Upon his honorable discharge he moved to Maryland and began his career as a successful stock broker. Over a 10 year span as a broker and office Principal, he worked at JW Gant, Cohig and Associates, AG Edwards and Sons and Global Financial. Licenses held; series 7, 63, 24 life and health. Mr. Price formerly sat on the board of directors for the YMCA and the I AM Foundation and currently is the Chairman and co-founder of the Leone Asset Foundation.

    Certainly noteworthy, the company has elected to decline buyout offers of 75 & 80 cents/share respectively back in November as seen in the PR here. With the share structure at the time of offer being approximately 408,801,248 shares fully diluted would have reflected a buyout offer of approximately $327 million. Since which time, we know that the company has retired 151 million shares as per this PR. So in retrospect, under the current share structure, the buyout offer would equate to an offer in excess of $1.25/share!!! All of which took place before the successful launch of its Wellness Juice

    The CEO Merle Ferguson has a history of merging companies, the fact that GLHO is owned by Mr. Ferguson and how closely the companies are intertwined and share many common resources, give way to the distinct possibility of a probable merger between the two organizations at some point.

    Financials / Technical analysis

    The company's sales have been picking up quite rapidly, Q2-2013 recording $1,314,642, Q3-2013 recording $5,197,682, Q4-2013 recording 7,819,226 and Q1-2014 recording $3,056,774. The majority of sales thus far have come from their Mexican divisions and from the sales of Emergency Food Kits (when the need arises). The company looks just to be commencing its sales strategy for its flagship product Wellness Juice, giving shareholders a glimpse of their progress through recent PRs showing sales amounting to $1,341,210.16 for the month of March, $2,083,740 in April and an astonishing growth in sales through the month of May in excess of $14,000,000 with expectations on increased sales throughout 2014 and beyond.

    The end of year financials for 2013 shows a healthy and profitable business.

    Q4-2013 numbers

    • $7,819,226 dollars in gross revenue
    • $1,943,783 dollars in net revenue
    • $4,404,579 dollars in assets (with $1,417,656 in accounts receivable)
    • $344,927 dollars in cash
    • $564,191 dollars in liabilities
    • ~408,000,000 shares outstanding

    Though the numbers released for Q1 are extremely healthy, depicting assets having grown by over $1 million, cash on hand increasing by almost $500K and a share structure reduced by almost 40%, the share price has traded sideways. The news of recent sales of the Wellness Juice, which is in excess to revenues previously posted by the company, has shown absolutely NO impact on the price per share.

    To me, that is very interesting because Q1 was a record quarter for the company. Of the $3,056,774 gross revenue posted, we know $1,341,210.16 came from sales of Wellness Juice. Considering the company is likely to continue generating a base gross revenues in the range of $1 to $2 million from other subsidiaries and we know they've sold in excess of $14 million through the month of May ($14 mill - $1.3 mill for the month of March - $2 mill for April = $10.7 mill for May), though the $14 million represents all sales for the company, a good portion of which was derived by its Wellness Juice product.

    Assuming management is right in its forecast of growth throughout 2014, we can assume an additional $10.7 mill recorded for the month of June, we are likely to see sales for the 3 month period to be approximately $24 million ($1 mill form subsidiaries + $2 mill for April + $10.7 mill for May + $10.7 mill for June = $24.4 million). Further expanding on the standard of $10.7 million in sales of Wellness juice/month and a base of $1 million from other business units per quarter, we could be looking at gross revenues of $93.6 million for 2014 (Q1 $3 mill + Q2 $24.4 mill + Q3 $31.1 + Q4 $31.1)

    Obviously this forecast has a number of unknowns, this would assume May being the peak thus far turns out to be the base going forward, which at the moment we simply can't tell, it may turn out to be the high with declining distributor interest, but then again, if management is able to establish the appropriate distributor connections and the product is receiving the positive feedback passed on to shareholders in recent press releases, $10.7 may only be but a starting point, after all it would appear as though the ongoing sales of Wellness Juice has been return business to only 6 distributors thus far.

    Considering the Nutrition industry in the U.S. hit an estimated $11.5 billion in 2012 and growing, it will be interesting to see just how far Merle and company can take their product in regards to market penetration. Additionally, it's hard to tell what profit margins can be obtained on the product, having spoken with Investor relations, YES International; they appear to be somewhere between 29% and 31%. Looking at other well established drinks on the market, we appear to be doing quite well. We can see companies like Coke posting 23% and Monster Energy surpassing that with just under 27%. Another more similar product is that of Abbott (ABT) in the form of their baby formula & Ensure Nutritional beverage has had tremendous success boasting $1.7 billion in sales (as seen here)

    Sales of nutritional products, including Similac infant formula and Ensure beverages for adults, rose 7.9 percent to $1.7 billion, representing almost a third of Abbott's total revenue.

    Q1-2014 numbers

    • $3,056,774 dollars in gross revenue
    • $935,365 dollars in net revenue
    • $5,338,708 dollars in assets (with $1,342,961 in accounts receivable)
    • $801,922 dollars in cash
    • $564,191 dollars in liabilities
    • 257,801,248 shares outstanding.

    At present, the RSI is approaching over bought which is not usually a good sign as an entry point, but given that the company currently has a market cap of just over $64.4 million and is likely to post approximately $7.4 million in net profit (and estimated $29 million for 2014), this would give the company a P/E of 2.2 at the current PPS of 0.25! Assuming the company can deliver on these numbers, a conservative P/E of 15 would value the stock price at $1.68/share.

    (click to enlarge)


    Most of the risk resides around the liquidity of the security; with an average volume just over 60K/day is generally something in which I would avoid. But in my view, this ticker is one of the market's best kept "little dirty secrets" and once the general investment community at large recognizes the underlying fundamentals of this company, it is likely to reach adequate levels of liquidity.

    Additionally, there are a number of sporadic revenue streams from Emergency Food Kits & the potential impacts of global warming that are unpredictable in nature and may pose difficulties for the company, but as they are gearing up to capitalize on new and more profitable streams, I feel as though those risks are minimal and mostly irrelevant to the company at hand.


    The company is at the cusp of making substantial moves which I expect to reward shareholders in a spectacular way. They don't have a large amount of catalysts, but the ones they do have should setup for a big move.

    - Q2 Financials are but a few weeks away (Aug 15, 2014) which one would expect to demolish anything remotely close to anything the company has ever posted (possibly in the range of $24 million, 8x more than posted for Q1)

    - Continued growth through acquisitions (several LOIs outstanding and several more in the works)

    - Launch of Wellness Water (estimated to be by year's end, or early 2015)

    - Audited financials which are expected to begin this year


    With a miniscule float of just over 19.5 million shares, little to no debt, a fare amount of cash on hand and record breaking revenues about to hit the wires. There are but few shares to be had. Those able to accumulate and wait on management to execute, as they've shown the ability to do, should see massive gains in the short-term and more so for those able to sit and wait long term.

    With continued growth and execution from the management team it would not surprise me if we exceed $1/share in the short-term and see a steady climb from there. Any entry point in the sub 40 cent range would be greatly be rewarded as the company continues to add shareholder value


    It is my belief GBHD with its management team, leveraged resources, strategic associations and partnerships, growing flagship product Wellness Juice & up and comer Wellness Water, incredibly low share float, along with its strong and telling direction is the most likely candidate to 1st qualify for listing on one of the big board's such as the NYSE or NASDAQ

    Updates: Since my coverage of the company, they've issued 2 additional PRs;

    Wellness Water finalizes formulas for 3 bottled water formulas, all of which are infused with negative ions. The intent of these waters are to replace acidic toxins, neutralize harmfully free-radicals and increase cellular hydration. In case you don't know, bottled water is the closest thing to liquid gold. Over $100 Billion is spent on bottled water yearly and there are few products on the market offering profit margins remotely resembling those attained by bottling this readably available natural resource and sales have nearly tripled in the past decade with more than half of the U.S. population drinking this liquid blue.

    All of the wellness Waters also have a PH in the range of 7.6 and 8 which fall into the category of being Alkaline forming. The PH balance is something which is commonly over looked by the general population, but should be considered by those evaluating health. The American diet tends to fall mostly in the Acidic range and a more neutral PH balance is essential to support good health

    With the company gearing up to start its marketing campaign later this year offering its niche products, I can barely contain my excitement and anticipation to see how much market share they will be able to capture. After all, we know the story of rapper 50 cent who sold his brand VitamineWater to Coca-Cola in 2007 for $4.1 billion for his sugar water beverage.

    Distribution agreement for PlayBoy condoms throughout the U.S. shows the company is willing to diversify its holdings and expand outside of its food and beverage industry to pursue other lucrative revenue streams.

    The condom industry has mainly been controlled by 13 large players globally and is set to hit a market value of $5.4 billion by 2018. Though PlayBoy condoms is relatively a new player to the market at large (debuting in 2010) it has seen rapid growth and can be found in major convenience stores and pharmacies in over 30 countries.

    The PlayBoy brand brings an X factor to the company with name recognition (PlayBoy has been around since 1972) and where other manufacturers have established themselves as safe & reliable, PlayBoy will bring a sex appeal to it, which should help with future market penetration.

    Though profit margins on condoms is not high (the world's largest condom manufacturer Karex Industries, reported only 11% margins on $50 million in sales), we should still see good number through steady and growing sales going forth.

    Disclosure: The author is long GBHD. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: Additional disclosure: The information contained in this article has been compiled from sources deemed reliable and it is accurate to the best of our knowledge and belief; however, there is no guarantee as to its accuracy, completeness, or validity, and the author cannot be held liable for any errors or omissions. The Author does not accept liability for any loss or damage caused by reliance upon such sources. Every effort has been made to accurately reflect the current market situation of the stock mentioned. Any forward looking statements made are strictly by opinion only. This information is for personal use only, and is not intended to be reproduced, copied, redistributed, transferred, or sold.This is not an offer to buy or sell securities. An offer to buy or sell securities can be made only with accompanying disclosure documents and only in the states and territories where such offers are permitted. Investing in "penny stocks" is highly speculative and involves a great deal of risk. The information contained herein should not be construed as a warranty of investment results. All risk, losses, and cost associated with investing, including total loss of principle, are your responsibility. The author is not a registered investment adviser in any jurisdiction whatsoever. It is strongly recommended that any purchase or sale decision be discussed with a financial adviser, or a broker-dealer, or a member of any financial regulatory. Never invest in any stock unless you can afford to lose your entire investment.

    Tags: GLHO, GBHD, long-ideas
    Jul 03 11:12 AM | Link | 9 Comments
  • A Sizzling Summer For WNTR!

    Our investigations and due diligence of Worldwide Diversified Holdings Inc. (OTC: WNTR) has revealed a company that is well positioned to have robust growth and is on the cusp of exciting developments that may possibly pay dividends for a long time to come. We felt it necessary to inform the shareholder community of this unique investment opportunity which has revealed a company with a diversified portfolio of over $31,000,000 in assets, over $500,000 in revenues, $0 debt, and the potential for hundreds of millions in revenues in the foreseeable future.

    A few things stood out to us as interesting and exciting as to how this company would have a CEO speaking out about a company's goal to uplist to either the NASDAQ or AMEX in 2014, and discussing the possibility of distributing dividends on this sub penny stock. We wondered if these were premature comments, or if the company actually had the means to make this a reality. Could the markets have so mistaken the value of this company? We've laid out all the information and facts that we could acquire, and we leave it up to you to draw your own conclusions.

    Follow the Money

    The story of the merged company "Ludvik Holdings Inc" comes with quite a history, so it's easier to track the past moves of the CEO to better understand who and what they are. CEO Frank Kristan has had a very active career to say the least. This is a story of "follow the money". It all starts when he was the CEO at Patriot Advisors, Inc. which provided investment advisory services to investment funds, corporations and individuals. Patriot had also managed funds for private companies, delivering an internal rate of return exceeding 25% per annum during this interim of 1994 to 2004. Frank completed his work with the funds, total assets under management exceeding $50 million.

    Patriot also performed on guarantees to deliver financing exceeding $50 million. Previously, he was Principal and CEO of Kristan Associates, a financial consulting concern furnishing financial advisory services to the telecommunications and financial services sectors.

    He began his career at Affiliated Computer Systems at which he provided computer and operational advisory services to banking and financial services institutions for merger and acquisition transactions. His Bachelor of Science in Mathematics was acquired from the University of Western Australia. Between 10/20/2006 to 3/31/2010 he ran in parallel his own consulting business Ludvik Nominees Pty Ltd and was compensated for his work at Patriot Advisors through his company

    According to SEC filings:

    Ludvik Nominees, Pty, Ltd. was the exclusive adviser to Company for the period October 10, 2006 through March 31, 2010. Ludvik Nominees Pty Ltd is 100% owned by Frank Kristan, our former President and Chief Executive Officer. During the period from inception to March 31, 2010 Ludvik Nominees was an advisor to the Company, fees were charged quarterly. A total of $2,017,417 including interest was billed. $484,250 was converted to 32,394,269 shares and $1,503,167 remains owing.

    (click to enlarge)

    In 2007 there was a merger between Patriot Advisors, Inc. and Templar Corporation pursuant to a plan of reorganization and merger approved by the United States Bankruptcy Court, District of Maine, Case No. 04-20328 forming the new entity Ludvik Capital, Inc. It has been recorded in U.S. Federal Bankruptcy court that Mr. Kristan recognized the underlying assets of Patriot, which is why he bought up the outstanding shares to form the new company Ludvik Capital Inc.

    Frank Kristan started the stock LDVK in 2006. Preparing for his first chance at making his own public stock offering, but decided it was not plausible at the time to make his public offering due to funding issues, and resigned as CEO and sold the shell on March 31st, 2010 (as shown here) At the same time, Frank took all existing equity holdings and continued his path under the new name Ludvik Holdings, Inc. and did not have any further involvement with Ludvik Capital Inc.

    On March 31st, 2012 Ludvik Holdings, Inc. entered in an agreement to merge with Reinsurance Technologies Ltd. (OTC:RSRN) (as seen here). We'd like to outline the below section:

    Following the signing of this agreement, LUDVIK shall have a contingency period of 87 days to (1) negotiate with RSRN creditors subject to the completion of the PLAN and (2) to evaluate the economic and technical feasibility of RSRN's existing software planned to provide services to the insurance and reinsurance industry."

    Additionally when looking RSRNs 8-K filing (seen here) dated Sept 14, 2012 there are further telling signs that the deal may not have gone through when we read that there was a requested extension to the due diligence period for Ludvik from June 30, 2012 to September 21, 2012 and eventually halted on March 11, 2014

    (click to enlarge)The Merger

    On April 8, 2013 Frank Kristan took over as sole director of Worldwide Internet Inc.

    Frank Kristan has been employed with Ludvik Holdings, Inc and its predecessor for more than five years. Frank Kristan, effective April 8, 2013, became our Sole Director, President and Treasurer. Mr Kristan is the President of Ludvik Holdings, Inc ("Ludvik").

    Then of course there is the merger between Ludvik Holdings, Inc. and Worldwide Internet Inc. which we are all interested about here. On July 17, 2013 the announcement of the acquisition in excess of $20 million for the diversified portfolio previously held by Ludvik Holdings, Inc. (as seen here)

    Frank Kristan, President of Worldwide Internet, Inc, stated that:

    "The acquisition of the Ludvik Holdings Inc assets will provide a broader base of operations for the company with significant additional assets. Worldwide intends to continue to diversify the company's operations through mergers and acquisitions."

    From what we can tell, the most notable asset that Worldwide Internet brought to the table of this merger, is the patent pending technology B.E.A.C.O.N™. At the moment it would appear as though this technology is not yet factored into the PPS (price per share).

    Patent pending B.E.A.C.O.N

    B.E.A.C.O.N™ is an emergency cell broadcast technology which has been filed for patent protection as of March 22, 2010 (which seems to be a long time for processing considering the average approval time is 24.6 months as per the United States Patent and Trademark Office). It should be noted that 2 subsequent patents have been filed by other entities which reference to WNTR's patent. The best summary provided by WNTR can be found here. The takeaway from which is highlighted below;

    This technology remotely tunes wireless handsets real-time to a channel that is broadcasting live emergency alert information. The alert is broadcast with receipt verification to every handset that has the BEACON client application in an area simultaneously.

    We also like the vision Worldwide has in its recent acquisition of I-Texts. Though I-Texts is currently an SMS advertiser, one can only speculate if it will at some point also work over WNTR's B.E.A.C.O.N system considering its commercial applications.

    700 MHz Network - Worldwide will form a Public/Private Partnership to develop a shared, nationwide interoperable network for both commercial and public safety users. This network will provide public safety entities access to new broadband technologies. Emergency responders will have priority access to the commercial spectrum in times of emergency, and the commercial licensee will have pre-emptible, secondary access to the public safety broadband spectrum. Providing for shared infrastructure will help achieve significant cost efficiencies while maximizing public safety's access to interoperable broadband spectrum.

    Investment funds and grants provide the upfront costs for building the 700 MHz networks, and the investment is recouped through monthly subscription fees. Worldwide will utilize the spectrum the FCC dedicated for broadband spectrum in 2007 to build the network infrastructure. This framework will bring public safety to a new level.

    RuMBA (Rural Mobile Broadband Alliance) also launched the American Broadband Bill of Rights back in March 2009 (seen here). From what we gather WNTR has developed this technology to satisfy the needs set forth by RuMBA highlighted in the Request for Information submitted to the NTIA (National Telecommunications and Information Administration) seen here, RuMBA is requiring better standards to be put in place for E-911 & emergency cell broadcast system.

    All areas of continental US must have availability of E-911, with location service, and an emergency cell broadcast system with weather and disaster alerting (SMS). Katrina-like outages are unacceptable. Grants should be issued to projects that "construct and deploy broadband facilities that improve public safety broadband communications services". RuMBA considers it imperative that any mobile platform selected should support single-site, Phase II, E911 emergency cell broadcast, cell site priority calling and other critical public safety features. Providers should demonstrate their ability to provide and carry over their networks, emergency alert services (EAS) such as: severe weather watches and warnings, tornadoes, hurricanes, fires, earthquakes, Amber Alerts, and other natural and manmade emergency information relevant to people living in rural areas.

    The link also highlights selection criteria for grants to be given to build such a network and Worldwide mentioned grant money in their disclosure. It should also be noted that the B.E.A.C.O.N system is most likely to be adopted in regions where extreme weather conditions and where natural disasters are more prevalent such as on the coasts where hurricanes are more common, along fault lines where earth quakes are common or in the North or South where there can be drastic weather swings (extreme hot or cold weather) and less used in central U.S.

    WNTR has not yet put a book value on their patent pending technology (which plays as a HUGE favor to investors taking up positions today). There are several different approaches to patent valuation used. In general one must try look at a two factor approach (both quantitative and qualitative) to draw upon in order to assess the value of an IP (intellectual property). The quantitative approach relies on numerical and measurable data with the purpose to calculate the economic value of the IP, while the qualitative is focused mainly on the analysis of the characteristics and potential uses of the IP (such as the technological, marketing or strategic aspects of the patented technologies). Being that the company has not yet received approval, no quantitative valuation can be made at this time (If approved and widely adopted, B.E.A.C.O.N can easily reach an evaluation in the hundreds of millions of dollars). A good read about evaluating a company's IP can be read here.

    In a statement from a press release issued by the company they hinted at the possibility of this technology providing up to $200,000,000 in revenues in the next three years.

    WILLIAMSBURG, VA, SEPTEMBER 3, 2013 - Worldwide Internet, Inc. (OTC: WNTR) announced today that it will be further developing its cell broadcast business and currently evaluating opportunities that could provide more than $200m in revenues in the next three years. The revenues are expected to come from providing services to cell tower operators in partnership with other telecommunication companies.

    2014 and Beyond: A Diversified Holdings Company

    Since the merger, the company's growth strategy has changed significantly as well and has PRed its intent to change its name from Worldwide Internet, Inc. to Worldwide Diversified Holdings, Inc. in order to better reflect the new business model.

    Prior to the merger both Worldwide Internet Inc. and Ludvik Holdings, Inc. were almost like being on hold without any big highlights and waiting for things to happen. Since the merger WNTR has been anything but stagnant, releasing constant updates whether it be an acquisition, letter of intent, or a shareholder update. They are actively growing the business through acquisitions with apparent big plans for the future as highlighted below;

    In order to visualize how the company has diversified its assets, or the direction it is heading, we have compiled the list of assets, investments, and outstanding accounts receivables. By viewing this table the vision below appears to be clear. Worldwide Diversified Holdings Inc. appears to be a hedge fund in the making.

    (click to enlarge)

    Acquisitions, Assets, and Letters of Intent

    On July 23, 2013 the Company entered into a Letter of Intent to acquire the Honeywell Estates LLC for a total purchase price of Twenty Six Million ($26,000,000) Dollars. It provides for the payment of Two Hundred and Fifty Thousand ($250,000), assumption of a First Mortgage and the balance of payment in the form of a Secured Convertible Note. The transaction was scheduled to close on or before August 31, 2013. However, the company has not been able to complete the transaction and continues to work on a possible financing of the acquisition.

    This was immediately followed by a successful acquisition on July 30, 2013 of $3 million portfolio of leases by World Capital Leasing, Inc. in New York City in exchange for 600K of Series C Preferred Shares with a stated value of $5 per share. A follow-up PR was released at the same time with insight as to the business model:

    "WILLIAMSBURG, VA, JULY 30, 2013 - Worldwide Internet, Inc. (OTC: WNTR) announced today that it has received a financing commitment for its automobile portfolio. Worldwide will now be able to finance Audi, BMW, Mercedes Benz, Nissan, Range Rover and Toyota, with an independent third party, for leases originated from World Capital Leasing, Inc. in New York"

    On Dec 5, 2013 WNTR yet again acquired an interest in the pharmaceutical industry in DPS Ventures LLC the owners of Dr. Belt's Back Fix ( Dr Belt's Back Fix is used to put your back and neck in the correct posture

    Once the correct posture is regained, the muscles, nerves, ligaments and spine are able to function properly. While sleeping or sitting Dr Belt's Back Fix trains your muscles to fix your posture and fix your pain.

    The company continued to update shareholders on Jan 7, 2014 in which Mr. Kristan announced that as of Dec 31, 2013 the company met its objective and fulfilled its obligations to repay outstanding debt, which also was the final term of the merger agreement between Ludvik Holdings Inc., and Worldwide Internet Inc.

    The company has satisfied US $995,013 in indebtedness to affiliates by assignment to third parties for the retirement of the debt.

    On Jan 18, 2014 they completed a $5 million acquisition of a 40% interest in a property located over the Marcellus Shale near Erie, Pa. The property is currently appraised at $13 million dollars and provides the company with additional development potential. The transaction was done in exchange for 1 million series C shares.

    The Marcellus Shale gas formation is rich in natural gas resources. It is one of the largest shale regions in the United States; Marcellus shale and is estimated to be the second largest natural gas find in the world

    As we've been reviewing company filings, disclosures and press releases, we've not covered any PRs released by the company when they are evaluating a business till now. We feel the PR on Feb 13, 2014 about water treatment solutions for the fracking industry is worth noting because it shows Mr. Kristan has a larger plan in mind, as yet again it shows not only is the company looking to be diverse, but also looking to synergize between different entities. In this case it could be a foreseen solution which can be deployed in WNTRs recent $5 million property located over the Marcellus Shale (similar to the synergy possibility between I-text and B.E.A.C.O.N)

    As fracking becomes more prevalent in the oil and gas industry, the treatment of fracking water proves to be difficult. The average fracked well uses about 4 million gallons of water. Aside from how much water is used in the fracking process, drillers have to haul it and dispose of it correctly at a cost of about 10c a gallon. The company is evaluating a mobile solution for the problem that involves being able to deliver a water treatment plant to the site for processing.

    There are more than 25,000 oil and gas wells that are completed in the US every year with each of them requiring the treatment and demand for clean, pure and reusable water.

    On March 7, 2014 the company brought new depth to their clear plan to diversify and synergize their holdings with acquisition of an interest in E3 Services and Solutions LLC ( E3 is still in early stages of development, but it has completed an initial round of funding and received additional financing commitments of up to $6 million dollars subject to certain terms and conditions.

    The statement below highlights show how this strategic move should be beneficial to WNTRs recent $5 million property located over the Marcellus Shale, potentially with their investment in New World Energy Holdings Inc. as well as its application to other oil and gas suppliers.

    E3 will work with strategic partners to develop and further commercialize key technologies for water reclamation projects in the oil & gas industry, mining services and industrial pollution. This includes the Eco Industrial parks and Remediation centers announced earlier and across coastal and inland port operations.

    Mark A. Skoda, CEO of E3 stated:

    The vision we began with was to procure and commercialize best in class technologies and innovation while brining that technology to market quickly in industrial applications. The integration of a funding platform together with a number of technology partners represent an innovative approach to our solution. The world class leadership and inventors we are working with provide a unique opportunity to benefit our clients, the environment and of course people.

    Frank Kristan, President of Worldwide Internet, Inc. stated that:

    "We understood the needs of the market and decided to establish our relationship with E3 on the basis of their vision and go to market strategy. The relationship between Worldwide and E3 will allow us to accelerate our plans. The structure of this agreement provides for rapid development and deployment which may provide asset value and dividends for our shareholders."

    Also mentioned in the PR is that the company is also in the process of retaining auditors to provide audited statements as a condition of its previously announced firm underwriting commitment for $30 million dollars and listing on to the NASDAQ or AMEX/NYSE exchanges.

    On March 19, 2014 Worldwide appointed Alan Rude to the board of directors. Mr. Rude has an extensive background in the merger and acquisition field and brings over 30 years of experience with him. He will join our team upon the completion of the underwriting of its public offering. We expect him to be a strong asset to our team and company going forward.

    On April 3, 2014 WNTR provided an update on their solar project Pamlico Energy Park, LLC. (which was previously held by Ludvik Holdings, Inc. and subsequently acquired by Worldwide on Oct 23, 2013) The company is actively seeking to grow and expand this part of its holdings. They've secured the appropriate leases, sought out funding, procurement, and are attempting to work out a power purchase agreement with Dominion Resources (NYSE: D).

    Pamlico Energy Park LLC (Pamlico) has received is approval from the North Carolina Utilities Commission for the initial stage of 1 MW of the 5MW project. Pamlico has also completed the initial lease of the 30 acre property, for the 5MW project, for 15 years with an option to extend an additional 30 years. Pamlico is also in discussions with third parties to lease up to an additional 70 acres to provide the land required to build up to 20MW in solar projects.

    Pamlico has engaged Pike Energy for engineering and procurement services. Pike Energy is one of the largest providers of energy solutions in the United States. It is also currently finalizing the terms of the Power Purchase Agreement with Dominion Resources. Dominion Resources announced this week the purchase of 139MW of solar projects.

    The financing of the project is through the Federal Investment Tax Credit for 30% of the project costs, the North Carolina Tax Credit for 35% of the project cost, in addition to depreciation and the sale of Renewable Energy Credits. The total 20 MW project when completed will be $40m.

    The company also announced that it intends to complete an initial $10,000,000 in financing, with its underwriter, by the end of the second quarter on June 30, 2014. This would include have the audited financials completed for the transaction.

    On April 11, 2014 the company announced it completed its initial investment into Telemedcare LLC (

    Telemedcare has a complete solution to telemedicine. The TeleMedCare solution provides remote viewing and intelligent reporting of a full range of vital signs and health questionnaires, with specific applications to care for patients at home, in a care facility or in the community

    We don't know how big of an investment was made, nor do we know how widely the technology will be adopted in the U.S. out of the estimated $2 trillion healthcare industry, but it was noted that they are in the process of finalizing a $3 million contract across North America at this time. But looking at this PR, all this has been trumped by the statement below;

    The company also announced that it expects the audited statements for its listing to be completed by June 30, 2014

    Asset Investigation

    We've taken the time to investigate the assets held previously by Ludvik Holdings, Inc. After all, one should always do their due diligence when investing to mitigate risk and by investing in WNTR which is in essence investing on our behalf, we can only hope that they've invested wisely. As per the Q&A below, we can expect to have greater insight and transparency to these holdings once audited financials are released

    At the time of merger with Worldwide Internet Inc. (as found here and illustrated below), acquired a range of assets. According to end of year financials, the company had net operating loss carry forwards of approximately $1,618,057 that may be offset against future taxable income. It was also stated that there were no potentially dilutive shares outstanding as of December 31, 2013. In addition to the assets listed below, recent filings indicate that the company has an account receivable due from China Ming Yang in the amount of $1,734,000 and $500,000 in an account receivable due from Solar City.

    ACRE Real Estate: Is not what we would call a good first impression. ACRE's focus is in commercial real estate. Ares Commercial Real Estate Corporation is a publicly traded specialty finance company and REIT (real estate investment trust). Looking over the past year there has been significant change to the company's stock price which originated as of June 17, 2013 when the company announced a new public offering of 18 million shares with an additional 2.7 million available to the underwriter. They soon after made headlines as a SELL by and as recent as March 19, 2014 were ranked by Zacks as #5 (strong sell). That being said, it should be noted ACRE has been distributing funds in the form of dividends for a few years and likely has compensated this investment limiting any losses from capital depreciation.

    Avenger Boats, Inc. looks to have a positive story to it, but the outcome and benefits to WNTR is unclear at this time. According to this PR, back in Oct 2005 Avenger Boats, Inc. formed a partnership with Xtreme Companies, Inc. It all comes off as very positive, but we question how the investment has worked out for Frank and the company.

    Avenger designs, develops and manufactures high performance patrol boats for use in Port Security, Homeland Security, Coast Guard and on the Littoral Combat Ship. Avenger owns the molds and tooling to build rigid hull aluminum boats ranging in size from 10 to 100 meters. In addition to the U.S. Government, Avenger boats have been sold to the Bahamian and Greek governments.

    News of the deal should be welcomed by investors, as the agreement gives Xtreme a worldwide license to manufacture, market, sell, import, maintain and service the Avenger line!

    Family Support Payment Corporation was founded in Nov 2007 by none other than Ludvik Capital, Inc. The intent of this organization was not only noble in the guaranteed payment of child support payments to custodial parents, but also set to penetrate a very large and relatively untapped multi-billion dollar industry. It's difficult to ascertain information on the business or what happened, but in all likelihood it had been dissolved. Knowing what should be and who should pay these support payments is one thing, but enforcing it is another thing entirely.

    Patriot Advisors Inc. We can't say much about this investment as the company is no longer in existence, we would like a public disclosure of what is actually held in assets here which make up in excess of $7.5 million. According to "The Plan of Merger" it looks to mainly consist of several loans, and one being to Unitech Industries, Inc. But as Patriot Advisors Inc. has been dissolved, we'd like to see corrections to this to reflect specifically what the investments are.

    The Investments at Fair Value also include the holdings of Patriot Advisors, Inc and Templar Corporation as they specifically relate to loans to Unitech Industries, Inc, holdings in Prepaid Systems Inc and investment in the Patriot Growth Fund.

    Island residence club inc. At the time that Island residence club inc. filed to issue an IPO of the company through the SEC, we can see that they had actually consulted with Mr. Kristan

    Frank Josep Kristan was issued 1,000,000 shares for consulting services rendered to the company

    Ludvik Nominees Pty Ltd owned 100K of shares prior to the IPO (which we know was later increased to 750K at some point thereafter). This seems a little odd and needs clarification as it would appear as though the IPO never took place and we can see the company actually filed to withdraw its IPO in Aug 2007. So the state of this investment is unclear at this time.

    The company has offered several loans to privately held companies Androit Utilities Inc., SS Group and FASTA Inc.

    Androit Utilities Inc. is a privately held company in Chesapeake, VA. They were established in 1985 and run Underground Wire and Cable Laying in their respective area. The company has an annual revenue of $5 to 10 million and employs a staff of approximately 20 to 49. Not much to be said here. We have a convertible note - Principal and receive 6% on the Principal Amount as interest which has a fare value booked at $677,166

    SS Group looks to be a privately held company which builds apartment blocks out of India. The principal investment was $2.5 million and 11% on the Principal Amount is received for the investment

    FASTA Inc. operates as a manufacturer of pre-engineered steel panels and components for the international, residential, commercial and institutional markets. The company was founded in 2005 and is based in Fairfax, Virginia. Again, we look to be receiving 4.95% interest.

    New World Energy Holdings Inc. We could not find ANY information about this company outside of what has been publicly disclosed by the company here other than they were incorporated out of Delaware in 2010

    (click to enlarge)

    Greener Wind Solutions, Inc. is a privately-held company that operates in the Wind Energy industry which was founded in 2008. Its headquarters are located in Wilmington, Delaware. Greener Wind Solutions represents China Ming Yang Wind Power Group Limited (NYSE:MY) of China in the United States. The Private company ticker symbol is (GREWISP) in which WNTR owns 1million shares. One hopes its business model is more sustainable than its representative out of china which at this time doesn't look sustainable as covered by The Montly Fool.

    ABBA Leasing Partners LLC was formed on 2011-08-24 in Virginia by FRANK J KRISTAN. It is quite possible this investment may coincide with more recent leasing acquisition in NYC discussed above, but at this time there is no additional information that can be found on this company outside of what has been publicly disclosed below;

    (click to enlarge)

    Pamlico Energy Park LLC is actively being developed as per recent PRs previously discussed above

    The Green Fund

    The company officially launched its Green Fund on Feb 27, 2014 forming a new entity Green Company Holdings, Inc. ( and intends to add at least an additional 10 companies to its holdings. It's also notable that once the fund is completed the company intends to list The Green Fund as a separately publicly trading vehicle that will provide shares to be available for distribution to shareholders.

    The Green Fund is essentially a Mutual Fund focused on the emerging Hemp and Medical Marijuana sector. It currently has a position in Hemp Market Watch with ties to a payment processor "SinglePoint". The advantages of mutual funds (or in this case "Green Fund") is that they give small investors access to professionally managed, diversified portfolios which would be difficult to create with a small amount of capital.

    The new entity Green Company Holdings Inc. is looking to embark into the large and growing marijuana industry. As of now, there have been growing support to allow the use of marijuana across the U.S. Earlier this year, there were already 21 states in which allowed for the legal purchase of prescribed marijuana to be obtained (seen here). Recently both Minnesota and Florida have also adopted such laws with anticipation of New York and of Iowa to follow suit in the near future.

    On Feb 21, 2014 the company initiated a 20% stake in Hemp Market Watch ( in exchange for 200K shares of its Series C Preferred Shares. It provides an informational portal for the marijuana industry. The portal will provide updated information on the industry and track a portfolio of companies that are involved in providing goods and services. In addition the parties will work together to identify a diversified portfolio of potential investments in the marijuana industry. This is the 1st step the company has taken to form a base in which they are calling their Green Fund.

    A recent partnership was formed between SinglePoint™ Inc. ( and Green Company Holdings Inc. that was announced on March 11, 2014. This partnership will allow SinglePoint to begin implementation and development of premier mobile marketing and mobile payment opportunities for the Medical Cannabis. We also feel as though this partnership may extend beyond and lead to further collaborations across other industries.

    In addition, the companies will work together to identify new targets for collaboration for what execs from both camps feel can lead to increased revenues and beneficial cross-marketing opportunities

    Other note worthy facts to SinglePoint which lead us to believe we may see collaboration with both I-text & B.E.A.C.O.N in the near future.

    We operate a best-in-class mobile commerce and communication platform specifically designed to serve the needs of the non-profit community as well as the for profit companies. We make any campaign instantly interactive via the mobile phone. This functionality allows our clients to conduct business transactions, accept donations and engage in targeted communication campaigns with their customers/donors through any mobile devices. Send more messages, create more awareness, and raise revenues and donations.

    Also highlighted in WNTRs PR on the same topic we find the below telling facts to a mobile marketing campaign between the two.

    Together SinglePoint and Green Company Holdings will begin to implement and develop premier mobile marketing and mobile payment opportunities for the Medical Cannabis Industry via the subsidiaries. In addition, the companies will work together to identify new targets for collaboration for what execs from both camps feel can lead to increased revenues and beneficial cross-marketing opportunities in the Cannabis Industry nationwide.

    On March 31, 2014 a shareholder update pertaining to the Green Fund portfolio was issued. Over the course of 1 month the company has closed 2 deals totaling $2 million in investments thus far, we know that $1 million went towards Hemp Market Watch, so we can conclude that the company invested an additional $1 million in the formation of the Green Fund. Despite being in operations for only 1 month, by the statements below, the company has gained much interest and actively growing;

    It (Green Company Holdings, Inc.) currently has letters of intent and indications of interest from other companies totally in excess of $8,000,000 that include cash and/or securities in exchange for their interest in The Green Fund. The company intends to close transactions on a monthly basis until it closes an initial $10,000,000 into the fund. The Green Fund will have its own independent legal counsel and auditors.

    The Green Fund is looking at opportunities in the industry for payment systems and informational portals including online shopping malls. In addition the opportunities for technologies that can be modified and applied to this industry. This includes kiosks that provide the product and sales of ancillary products in addition to real estate that provides for warehousing of the product.

    The company also is currently interviewing auditors as part of the process for its listing on to the NASDAQ or NYSE /AMEX.

    In the company's most recent PR as of April 25, 2014 it has shown its intent to publicly list Green Company Holdings, Inc. by the end of the third quarter this year

    The company is currently evaluating which publicly trading exchange will provide the best exposure for the company and access to additional capital to expand the fund beyond its initial investments.

    There are many benefits that will be realized by the company and existing shareholders in doing so.

    - The Company will have more cash on hand

    - They will continue to be able to leverage their assets in the continued growth of the company through acquisitions

    - Existing shareholders will have new shares issued for the new entity automatically appear in their accounts

    - If listed on a more senior exchange such as the NASDAQ or AMEX it will bring more stability and new investors to the company

    As of late there have been a number of letters of intent with the likes of ResponsiBill for financial service that offers a unique green solution for billing, invoicing, and document storage (Ironically through customer's checking account via ACH), with Green Rush Advisory Group LLC which help start-ups, properly license and profitably run marijuana businesses that are 100% compliant with state and local rules, and with Hydro Pharms, LLC which is expected to be a leader in the Medicinal Marijuana Industry in the State of Florida specializing in the cultivation, manufacturing, and distribution of Cannabis products.


    WNTR continued on its acquisition path on Nov 19, 2013 as it added Encryption Solutions, Inc. ( to its portfolio of diversified holdings. Which is a software development and distribution company specializing in cutting-edge, next generation encryption software solutions for secure global wireless and wired communications. The acquisition cost was not disclosed, but made possible through the exchange of its Series C Preferred shares.

    The phenomenal growth in digitizing information in certain industry sectors combined with an increased need for information security poses a strong market demand for products that can securely enable wireless networking and mobile communications, high speed file transfer (FTP/EDI) and email messaging. Healthcare, education, finance and banking, critical infrastructure such as energy, power and water, government entities and the TV, film and music industries are all impacted by the need for secure communications.

    Encryption Solutions, Inc.'s SkyLOCK security solution utilizes an encryption system that is structurally and functionally unique and possesses distinct advantages over any currently marketed security product. The core technology is a proprietary and patent-pending algorithm that surpasses the standards of current encryption algorithms and provides for end-to-end, unbreakable and totally secure communications across both wireless and hard-wired networks.

    The company also disclosed the following concerning its Series C Preferred shares;

    The company has authorized 45,000,000 shares of Series C Preferred, with a stated value of $5.00 per shares to provide for up to $225 million in acquisitions with minimum dilution to shareholders.

    The software company holds 4 patents 8275997, 8031865, 7752453 and 7526643 which include methods for Multi-level security systems, methods for encrypting data within documents, encrypting and transmitting data and system transmitting of encrypted data. They have also been certified by "The National Institute of Standards and Technology" and the "Communications Security Establishment" We also know that they've received contracts from both the U.S. Department of Defense and U.S. General Services Administration


    I-Texts is an advertising platform which works via SMS (Short Message Service). It is an opt-in service for end users who's main focus at the moment is the advertisement of non-profit and charity organizations. The company offers prizes valued up to $5,000 as an incentive for users to use the service. They are also preparing to offer mainstream advertising for national advertisers such as McDonald's, Nike, Coke, P&G, etc. as well as local ZIP/Postal Code-specific offers in the near future with efforts to send texts tailored to your specific likes and preferences.

    On Dec 19, 2013 Worldwide acquired an interest in Global Marketing Services LLC that provide sales and marketing for I-Texts ( which is said to be entering a market estimated at approximately $76 billion by 2015

    I-texts has developed a state of the art software platform to address all critical needs, such as: business management, information management including compliance and risk mitigation. In addition to the software platform is the latest in security programming to ensure the clients' information is 100% secure including dedicated servers and a state of the art back-up system

    The platform fills a need and demand for a unique, simple and efficient cost effective fundraising platform for colleges, universities, charities and military relief organizations. It offers a smart, simple and unique marketing and advertising opportunity that helps crack the code of mobile marketing.

    This investment could very well be a good strategic move and lead to a leveraged service that works in conjunction with patent pending B.E.A.C.O.N cell broadcast technology as hinted by the CEO below;

    "We see this as an opportunity to leverage our other telecommunication investments, with this investment, to develop a strong cash flow that will provide dividends to shareholders in 2014."

    On March 25, 2014 it would appear as though the company has increased its previous holdings of I-texts Inc. and now appear to have majority control (in the previous interest of the company it had been stated that we had the option to increase our holdings, as it would appear we've executed that right)

    In addition I-Texts Inc. has signed an agreement with a global technology services company to provide support services and assist in development of new services for its technology platform.

    As we can see by the PR released April 1, 2014, both SinglePoint and Worldwide wasted no time on expanding their partnership through integration with I-Texts which should be a prosperous coexistence (Micro donations, especially through mobile donations is a rapidly growing entity as covered nicely by Forbes). So I-Texts will advertise for charities and non-profit organizations and SinglePoint will process the donations via SinglePoints proprietary system SING's Mobile Donation Platform.

    As WNTR announced last week, it has acquired state-of-the-art technology company, I-Texts, Inc., who recently signed an agreement with a global services company to expand its strong and growing platform. As announced, I-Texts has more than 300 charities and 400 independent representatives in its database, and is market-ready to accept advertising business to reach its loyal supporters with beneficial offers and opportunities.

    As Worldwide Internet's payment solutions partner, SinglePoint and its dynamic mobile donations platform will be promptly introduced to I-Texts for access to the 300+ charities toward mutual benefit and additional revenue streams for SinglePoint™.

    While it's great that the amount of funds donated to needed causes has grown significantly as of late, as highlighted below from the Forbes article, the size of each donation has decreased, but the number of donations have increased by a greater factor. What that means to us is that the overhead of processing those payments has increased, so on a percentage basis more money is being kept by processors and fewer funds actually reach their desired charities.

    We would like to see SinglePoint form a partnership with MyECheck (MYEC) to process funds via Check 21 processing rather than ACH. That would give much lower overhead for processing, it's faster and more secure than ACH, putting more money where it's needed and as the company grows, so to will the number of transactions. The adaptation of MyECheck should have significant to the company's bottom line.

    In fact, in 2012 micro donations outpaced their macro counterparts. According to PayPal data, the average donation size globally decreased by $0.71 last year, while the number of global donations to nonprofits increased by 20 percent

    On April 24, 2014 we were informed that its portfolio company I-Texts, Inc had commenced its Nationwide Mobile Advertising Campaign and has been exceeding expectations

    The company announced that it has engaged advertisers and is now sending out mobile advertising texts that benefit the charities. The initial responses have exceeded the company's expectations and the responses from the supporters are significantly higher than the industry standards for mobile advertising responses. Some of the charities that are part of the program include the Lions Club, the Lupus Foundation, Shriners Hospital for Children, United Way, The Citadel Brigadier Foundation, Boy Scouts of America, United Cerebral Palsy, Paralyzed Veterans of America and Watering Seeds.

    Possibility of Uplisting to a Higher Exchange and a Merger

    On Feb 6, 2014 WNTR established not 1, but 2 investment banking agreements with a leading New York-based investment banking firm. Both deals amount to $60 million, half of which ($30 million) is to be used as acquisition financing which needs to abide by terms and conditions. The second half is a $30,000,000 firm commitment underwritten public offering on a major exchange (AMEX or NASDAQ). This agreement is however subject to the Company's successful auditing and acquisition of its current target businesses.

    Though the name of the underwriter was never announced, we speculate that the lending financial institution is none other than Wellington Shields & Co. LLC ( We know that they were established in 1925, their headquarters are in the heart of Manhattan's Financial District two blocks from the New York Stock Exchange. In the Investment Banking section of their website there are also many telling details which has given us this conclusion.

    1) The $30 million deal falls in range with their target

    Our target deal range is $10 million to $50 million.

    2) The services described below equate to what has been offered to Worldwide Internet


    "At Wellington Shields we can provide recommendations regarding listing on the OTCBB, NASDAQ or AMEX and NYSE. With our international relationships, Wellington Shields bankers can also help select the most appropriate stock exchange throughout the world. Whether you are a mining company looking to list on the Toronto Stock Exchange versus the Hong Kong Stock Exchange or an emerging growth company looking to list on the Frankfurt Stock Exchange versus the OTCQX, we can guide you in your selection and introduce you to key people involved with the exchange."

    (click to enlarge)


    Wellington Shields investment bankers can create an appropriate corporate strategy dealing with the buying, selling, and combining of companies designed to add shareholder value. If your company is looking to expand operations, increase long-term profitability, or to increase economies of scale, our Investment Banking team can assist with customized advisory strategies designed with your company in mind. Moreover, we can advise companies on how to best utilize their stock as currency, for acquisitions and roll-up situations.

    3) The icing on the cake is the below exert which reads identically to what was publicly disclosed by WNTRs recent press release.

    "Wellington Shields & Co., a member of the New York Stock Exchange with five (5) offices throughout the country, over 10 research analysts, over 70 retail brokers, two Morningstar-rated mutual funds and a pair of institutional desks trading for 800 institutional clients throughout the world."

    You may be wondering why we've dedicated so much effort into the lender of these loans. The reason being is because they have a solid track record of successful uplistings, they are not passive, they do their due diligence and work in conjunction with the companies they do business with. Not to mention Wellington Shields management serves on boards of directors of NYSE, AMEX and NASDAQ listed companies.

    (click to enlarge)

    Shareholders are also left to ponder how Worldwide Diversified Holdings Inc. plans to have a market cap that qualifies the company to become uplisted to a higher exchange. Although we have been unable to discover the name of the potential target acquisition in this press release, we suspect that this may be the key as to how the company intends to achieve uplisting:

    NEW YORK, NY--(Marketwired - Dec 5, 2013) - Worldwide Internet, Inc. (OTC Pink: WNTR) announced today that it has entered into a Letter of Intent to acquire an employee leasing company to be based in the United States and Europe. The company's revenues for 2014 will be in excess of $100m and provide earnings of least $5m in 2014.

    The company currently has 800 contractors that primarily provide services to the oil and gas industry. The company pays the wages, handles taxes and managing benefits for that employee. It is dedicated to providing tax efficient services for consultants, contractors and employees.

    Frank Kristan, President of Worldwide Internet, Inc stated that:

    "We believe this acquisition will provide significant revenue and earnings for 2014. The transaction is expected to close in the first quarter of 2014. We are executing on our business plan and focused on increasing shareholder value and providing distributions to shareholders."

    Series C Preferred Shares

    Anyone who has followed any of the recent acquisition PRs has surely read "in exchange for the Worldwide Series C Preferred shares". This is a common practice by holdings companies used to leverage assets to grow their portfolios.

    So far, we know;

    · 600K have been issued to World Capital Leasing, Inc. for the acquisition of a $3 million portfolio of leases.

    · 1M have been issued for a natural gas property lease valued at $5 million

    · 200K in the formation of the Green Fund

    · 200K for a 20% interest in Hemp Market Watch

    · 120K for its position in E3 Services and Solutions LLC

    Totaling 2.12M Series C preferred shares + the untold amount that went towards their investments in I-texts or Dr. Belts medical device

    In a communication between a shareholder and the CEO we can then see that essentially these Series C preferred shares can only be converted after 6 months with a 10 to 1 conversion essentially valuing the shares at 50 cents.

    "We are focused on doing our acquisitions with WNTR Series C Preferred with a stated value of $5. The shares are convertible at 10 to 1 but not for at least 6 months and effectively they would only convert at above 50 cents per share or else the holder would have a loss. So effectively for every $5m in assets could dilute approximately 10m shares at value of $.50c per share. There is also the possibility for the company to list the preferred shares separately to raise additional investment capital on the same terms to minimize dilution."

    Q & A with CEO. Frank Kristan

    In the process of reviewing this holdings company as an investment, shareholders compiled a list of questions which we've forwarded to the CEO. We are glad to say Frank was kind enough to oblige us by answering the below questions. It shows transparency and willingness to reassure investors of his intentions with the company and how he is striving to increase shareholder value;

    Q1: It was stated in a press release on Jan 7, 2014, that the remainder of the company debt (as of Dec 31, 2013) was "assigned to the third parties." There have been approximately 250 million shares added to the public float since August of 2013.

    Have all, or most all of these shares that have hit the public float been used to pay for the company debt? If so, then do you believe the debt conversions are close to being completed?

    A1: The increase in the float has been due to third party conversions of company debt and to the best of my knowledge they have been substantially completed.

    Q2: Some acquisitions made by Worldwide Diversified Holdings Inc. have been in exchange for Series C preferred shares, and it has been stated that the company has authorized 45 million shares of Series C Preferred, with a stated value of $5.00 per shares to provide for up to $225 million in acquisitions with minimum dilution to shareholders.

    When Worldwide Diversified Holdings Inc acquires a company, or a percentage of a company, with these series C preferred shares-- this in return allows you to place that acquisition as an asset on WNTR's balance sheet, and also collect a percentage of revenues (if any) for Worldwide by having ownership of the asset? Is that correct? Is this a common practice amongst holding companies used to leverage assets to grow their portfolios?

    A2: Under General Accounting Procedures the asset is to be reported on the balance sheet. In the event that an acquisition is in exchange for more than 51% of the company then the revenue can be recorded. If it is less than 51% then if there is any dividends or interest then they will be recorded but not a percentage of the sales. This is similar to MVC Capital (NYSE: MVC) ( but we are not a Business Development Company. We currently have minority acquisitions but are looking to acquire majority positions in companies to be able to consolidate revenue similar to Compass Diversified Holdings, Inc (NYSE: CODI) (

    Q3: According to the filings there are 354 million common shares held by insiders. If there ever was a reverse split, would these 354 million common shares held by insiders be exempt from any split, or are they treated as regular common shares?

    A3: If a company does a split then all shares are treated equally, including common and preferred shares.

    Q4: The assets listed under Ludvik Holdings Inc, which include;

    Family Support Payment Corp., ACRE Real Estate, Avenger Boats Inc., ABBA Leasing Partners LLC, FASTA Inc., Island Residence Club, New World Energy Holdings, Greener Wind Solutions, and the remainder of assets from the dissolved Patriot Advisors Inc. which include outstanding loans, or accounts receivables...

    Is there anyway shareholders can learn about the status of these investments and loans? If the company releases audited financials then would the audited financials show transparency of the assets, investments, and outstanding accounts receivables listed under the assets of Ludvik Holdings Inc. and the 2013 WNTR annual report?

    A4: The company will report the holdings in compliance with General Accounting Procedures which involves any update on status of the investments.

    Q5: Some investors have expressed interest about the status of the new website. Is there a timeline as to when the new website will be up and running?

    A5: The company is working on developing an updated website for better information to shareholders.

    Q6: Is Worldwide Diversified Holdings Inc.'s patent pending proprietary technology B.E.A.C.O.N. emergency broadcast technology and its application completely developed, Or is it still under development? Is there any new details or developments to be revealed at this time?

    A6: The company has a number of proprietary technologies that it is developing with partners and will update as further progress is made with the technology.

    Q7: Is there any update on the Erie, P.A. Marcellus Shale land lease to Aera Energy? Has the company started to receive monthly revenues from this lease deal?

    A7: The company has a minority interest in the property which has not had a dividend or payment yet. Under the agreement we are working on additional transactions by June 30.

    Q8: Looking over our search results on MacReport Media Publishing's web site, we do not see any publications on WNTR after Feb 28, 2014, are they still employed as a PR firm for your company? & have they lived up to your expectations? Are there any other plans to increase exposure of the company?

    A8: MacReport Media is now affiliated with Eteligis ( We are evaluating our current programs.

    Q9: On several occasions you've mentioned the fact that the company plans to distribute funds to shareholders in the form of dividends, Can you give us any guidance as to when the company expects to start these distributions?

    A9: The company would have the option to either declare dividends quarterly, annually or as a special onetime dividend and review them on a quarterly basis or as a special situation.

    Q10: Taking into account your background as a fund manager, venture capitalist, and providing advisory services to investment funds, as well as looking at the qualitative and quantitative value of Worldwide Diversified Holdings Inc. Currently, the intrinsic value looks to be out of favor with the market. At the moment WNTR looks to qualify as a "net-net" company, have you considered share buyback possible in the future? As it would not only be a good investment for the company, but also reassure investors and increase perceived value, please expand on your thoughts.

    A10: The management believes that the company is undervalued and there is a number of ways to increase shareholder value that could include buybacks and retirement of shares. The market value has increased from approximately $700,000 to $1,000,000 to now trading with a market value of $7m to $10m. One of the requirements of listing is to have a market value of $70m to $100m.

    Q11: Are we still on track to complete audited financials by the end of June 30th?

    A11: We are currently working on being completed by June 30.

    Share Structure & Technical Analysis

    There are 1,145,757,735 outstanding shares as of April 28, 2014.

    · 100 million are owned by TTT Investment Trust

    · 100 million by Darrell McDowell

    · 154 million by Frank Kristan

    · 311,027,490 million in the public float

    Our current portfolio is valued at approximately $31 million (which does not account for additional assets and growth such as SkyLOCK, Dr. Belt's Back Fix, E3 Services and Solutions LLC for water reclamation projects in the oil & gas industry, mining services and industrial pollution, the expansion of Pamlico Energy Park LLC, Telemedcare LLC, our majority control in I-Texts, or what may turn out to be our largest asset of all B.E.A.C.O.N).

    From WNTR's 2013 EoY results;

    The company's net asset value has increased to $0.04c per share for the period ending December 31, 2013 from a net asset value of $(0.0001) per share.

    What this means is that in essence, if the company were to liquidate all of its current assets and dissolve the company, the shareholders would have a payout with more value than currently reflected at the current price per share!

    Looking at the qualitative and quantitative value of WNTR, the intrinsic value looks to be out of favor with the market. At the moment WNTR looks to qualify as a net-net company and we consider this stock to be a STRONG-BUY

    Net-net is a value investing technique in which a company is valued solely on its net current assets. The net-net investing method focuses on current assets, taking cash and cash equivalents at full value, reducing accounts receivable for doubtful accounts, and reducing inventories to liquidation values. Total liabilities are then deducted from the adjusted current assets to get the company's net-net value. When a viable company is identified as a net-net, it is about as close to a sure thing as you can get in the markets.

    Reviewing the financials leads us to believe the stock is trading in the sub-penny range due to the limited income thus far. It's important to remember that prior to the company merger, they essentially made no income and had no assets on the books! Looking at Q3/2013 they booked assets amounting to almost $18.5 million with investment income of $43.5K with a total liability of almost $950K.

    End of year financials was a stellar increase in assets and total revenues coming in at almost $31.7 million and $528K respectively, and now showing $0 debt. With current assets under management, recent acquisitions, national launch of I-texts, and patent pending B.E.A.C.O.N, the company is in a position to sit and wait for its investments to bear fruit (though we know this will probably not be the case). We expect the aggressive growth strategy to continue and for Worldwide Diversified Holdings Inc. to become a well respected holdings company that could possibly end up trading on a higher exchange.

    (click to enlarge)

    Looking at the charts we can clearly see that the stock is currently in a support pattern close to being oversold as of late with an RSI of 45. So if a significant material event were to occur in the short term, we would have a high climb before hitting the breakout range. We expect that now that the debt conversion and share dilution is coming to an end (as alluded to in the Q&A) that there should be a steady trend reversal and appreciation of the stock price that will follow.

    The stock looks to have a clear trend pattern at the moment (material events can always supersede trends). There is currently a strong support line set at 0.0040 and resistance currently set at the 0.0080 mark. This is a very positive trend for investors who follow chart patterns. We can clearly see healthy trading with numerous higher lows and higher highs. The present formation should come to an end as we approach the end of May or beginning of June which points to a breakout on the upside from here. With anticipated material events and upcoming Q1 results, we expect the highs of today, to be the lows of tomorrow. We already see positive signs forming with the 12 day MACD on the verge of crossing the 26 day, so we should see good accumulation in the current range.

    (click to enlarge)

    Risk vs. Reward

    With any investment there are always risks. The diversification of holdings in the company's portfolio and continued growth should help mitigate risks. We believe that the company has a solid vision of what it intends to do and at the same time, it has intents on leveraging investments and assets to further benefit the company and its shareholders. With the addition of key players such as Alan Rude, and in conjunction with the possibility of Wellington Shields & Co. LLC, we are surely mitigating those risks even further. But we are basing investments on publicly disclosed information, and our own due diligence, and though we are making educated predictions based on facts at hand, there can be a number of unforeseen events that can occur such as deceptive practices, lack of market penetration, increased competition, or economic downturns which are not in the control of the company.

    We also feel we are at a great risk VS. reward point at the moment when the stock is currently trading well below book value.


    There has been much talk and speculation as to the dilution of shares by the company. But we'd like to point out that Frank received 154,125,870 of common shares at 10 cents/share (which would equate to $15,412,587) and 250,000 Series A preferred shares at $20/share (which would equate to $5 million), it would make no sense for him to sell his shares for less as it equates to the assets he brought to the company.

    We also expect the company to continue to form strong business relationships and continue to acquire strategic interests with intent to leverage and synergize its holdings.

    We should also see ongoing increases to both the assets under management and increased revenue going forth with greater transparency on investments through the upcoming audited financials.


    There are a number of upcoming catalysts for the company which could reward long term shareholders for their patience such as;

    · Audited financials (expected June 30th)

    · Acquisitions in real estate

    · Acquisition or merger with a large employee leasing firm

    · Possibility of oil rig leasing projects with well known energy producers

    · Uplisting to a more senior exchange

    · Introduction of distributions to shareholders in the form of dividends

    · Increased revenues quarter after quarter

    · Public offering of the Green Fund

    · Patent approval or the bringing to market of B.E.A.C.O.N

    Conclusion & Speculation

    99.999% of investments in today's markets are based on perceived or anticipated value, at the moment WNTR looks to be out of favor with the markets for some unknown reason. Having fully reviewed and investigated the company from where they were, to where they are now, and where they appear to be going, it is in our opinion that this stock presents a rare opportunity at hand.

    In knowing that the company has intentions to uplist to either the NASDAQ or AMEX in 2014. The answer to question #10 lead us to question what steps does the CEO and company have in store to increase the market cap of its shares by 10 fold from here? We shareholders are speculating that a merger between Worldwide Diversified Holdings Inc., and a much larger high profile company has become a very likely scenario.

    It would be nice to say something like "wait for the next pullback to find a more admirable buying price," but with the intense volatility of the stock it is hard to predict a perfect entry. We can comfortably recommend buying shares while the stock is still trading under .01 cent, because we suspect that by the end of the summer- WNTR will be sizzling hot!

    Disclosure: I am long WNTR.

    Additional disclosure: The information contained in this article has been compiled from sources deemed reliable and it is accurate to the best of our knowledge and belief; however, there is no guarantee as to its accuracy, completeness, or validity, and the author cannot be held liable for any errors or omissions. The Author does not accept liability for any loss or damage caused by reliance upon such sources. Every effort has been made to accurately reflect the current market situation of the stock mentioned. Any forward looking statements made are strictly by opinion only. This information is for personal use only, and is not intended to be reproduced, copied, redistributed, transferred, or sold.This is not an offer to buy or sell securities. An offer to buy or sell securities can be made only with accompanying disclosure documents and only in the states and territories where such offers are permitted. Investing in "penny stocks" is highly speculative and involves a great deal of risk. The information contained herein should not be construed as a warranty of investment results. All risk, losses, and cost associated with investing, including total loss of principle, are your responsibility. The author is not a registered investment adviser in any jurisdiction whatsoever. It is strongly recommended that any purchase or sale decision be discussed with a financial adviser, or a broker-dealer, or a member of any financial regulatory. Never invest in any stock unless you can afford to lose your entire investment.

    Tags: WNTR, MYEC, MY
    May 04 8:00 PM | Link | 5 Comments
  • The ABC's Of MYEC

    "for every action there is an equal and opposite reaction"

    - Isaac Newton

    I felt compelled to write this short blog in response to recent post "My ECheck - Don't Bank On It." and a number of phone calls I've received on the subject. To be clear, I'm not opposed to a difference of opinion (I will not delete comments opposed to my view, I would evaluate the claim and agree or provide a rebuttal) as long as the one who brings forth the information can backup statements with facts and it's clear that despite all of the information available publicly that many don't clearly understand the industry and what unique features MyECheck brings to the table. Hopefully what I write hear clarifies a few of these points.

    So what is the deal with Check21?

    The best way of describing MyECheck (Check 21) is to offer a comparison to computer processors. Intel (NASDAQ:INTC) had a monopoly on the CPU industry for many years until Advanced Micro Devices, Inc. (NASDAQ:AMD) made an appearance to the market offering a cheaper alternative (the dwindling market share of AMD is beyond the scope of this article). The difference in comparison to ACH vs. Check21 is that the service is significantly less expensive by more than half the cost, transactions take between 1 and 3 seconds as opposed to ACH (which typically take between 1 and 3 business days) and because of the speed of the transactions, fraud related to chargebacks cannot occur.

    Furthermore when we look at the processor industry, the CPU is in essence much the same as the backend service (as is ACH or Check21) in which regardless of who is providing the frontend system, be it Hewlett-Packard Development Company (NYSE:HPQ), International Business Machines Corporation (NYSE:IBM), DELL or Apple (OTC:APPL), they all have the option of choosing Intel or AMD regardless of all the bells and whistles each offer to try and capture market share. The same applies for the checking industry, it doesn't matter if it's a bank, fund processor, retail chain or any variant of special service company that move money from one account to another, they ALL need to use either ACH or Check21 processing.

    I believe some of the confusion comes to those who look at MyECheck as industry specific (like Marijuana) or because of the upcoming release of iPhone/Android apps. These apps are not the core of this business, the company could easily function and prosper without ever having developed these apps. Any existing app on the market which processes, scans or offers any variation which moves money via the checking system currently runs on ACH as the backend processing services and pays the appropriate fees in order to do so.

    MYEC is essentially expanding their income source by offering these apps, but could have easily waited for 3rd party developers to create their own proprietary apps to process through MyECheck's proprietary and patented system. MYEC has already sold licensing branded versions of their upcoming apps to numerous 3rd party customers. Other companies can create (or modify existing apps to access MyEChecks system as well)

    With the recent release of MyECheck 3.0 MYEC IS now processing payments in accounts in numerous different banking institutions such as (but not limited to) Bank of America and Chase among others. We have mitigated the risks once associated and realized with the company going forward.

    Check 21 Act and reference to the Patent held by Ed Starrs

    Firstly, a few points about check 21 act. This act is not just made up of 1 element, there are a few elements to the act (I will not cover all aspects of it here). One such aspect is the digital return of a check to the issuer as opposed to returning the actual physical check. Up to this point this has been the most widely accepted aspect from financial institutions and has the same legal status as previously given to the return of physical checks (this is a scan of the physical check issued). There is no monetary value to be gained from this part other than the money saved by banks which no longer need to physically return the check to clients and has nothing to do with MYEC. One such example can be seen here by RBC. Most banks have adopted the practice even if they don't particularly publish information on it.

    A new U.S. federal law, called the "Check Clearing for the 21st Century Act,'" or Check 21 Act, gives U.S. financial institutions the option of processing substitute cheques instead of original cheques. This new Act gives a substitute check/IRD that meets the requirements of the Act the same legal status as an original paper cheque and requires financial institutions to accept substitute checks/IRDs.

    While this is a new U.S. law, it affects financial institutions and their clients across North America. Once this new law takes effect, RBC Financial Group will begin receiving substitute checks/IRDs from U.S. financial institutions.

    MyECheck is the "ONLY" company with a patent which can legally issue a digital check for processing (most other companies make, capture or scan a digital copy of an actual physical check). Obviously, the Check 21 act itself cannot be patented, but the process of creating electronic checks and how it's handled, can be. The Patent covers all aspects to the issuing of electronic checks, real-time verifications and processing of those electronic checks. It also covers all type of transactions

    "to acquire physical product, a service, digital media, or digital content; and the financial institution is one of a bank, savings and loan (S&L), credit union, or Federal Reserve."

    As well as covering the information from the user being received through a graphical user interface (and since this is all done virtually, it would be difficult to work around these parameters).

    Federal Reserve interpretation

    In regards to statements about the Federal Reserve Bank of Atlanta which is covered here (which was quoted out of context), it is there job to fully evaluate any technology (the good and the bad) and point out any type of security holes that may exist.

    The topic discussed about RCC (remotely Created Checks) is NOT inherent to MYEC or Check21 processing, it's equally problematic to ACH. On the Assessment by the Federal Reserve Bank of Atlanta they also give examples of Remotely Created Check Fraud which clearly had nothing to do with MyECheck or the Check21 act seen below (there are more examples on the link provided here):

    (click to enlarge)

    "In recent years, the use of these "electronic remotely created checks" has increased. The primary reason is to avoid the costs of printing and to leverage off the imaged-based processing permitted under the Check Clearing for the 21st Century Act(Check 21). Yet, no matter their form (paper or electronic), it is possible for these payment orders to wind up converted and processed as an ACH debit item and cleared through the ACH network.

    Whether processed through the check collection system or ACH network, remotely created checks' most common uses include: pre-authorized drafts, where for example, a consumer approves a payment of its insurance policy and the company issues an unsigned draft"

    "In its simplest form, the issue or creation of a remotely created check is a matter between the account holder (drawer) and payee. The drawer grants the payee (merchant) authorization to produce a remotely created check drawn on the drawer's account. The payee obtains the information that appears in the MICR line of the drawer's physical checks, and based on this information, the payee enters the check information and creates either an electronic template of a check or sometimes a paper check document that looks like a check. The check does not bear the drawer's signature; instead the signature line displays the drawer's name or some other verbiage referencing the drawer's authorization to create the check"

    I also covered this in my previous articles, but we also know that the federal reserve is in the process of revising current check processing related to the Check 21 act which was enacted on October 28, 2003 and then became effective in October 2004. On February 4, 2014, the Board of Governors of the Federal Reserve System took the final step before creating a new law that will define a new payment official instrument called the "electronic check". They are now indirectly pushing the banking industry towards implementing the Check 21 act across all institutions (in other words pushing banks towards adopting MyECheck) see here.

    One of the primary reasons for slow integrations by the banking industry is due to liability. Those words "Liable" strike fear in the hearts of even the largest of organizations and is why the results of the new proposed law is so significant to the mass adoption of the technology. For those companies willing to listen today should feel at ease knowing that MYEC actually has partnered with industry leading check guarantee providers to offer clients a cost effective Check Guarantee Service. The check guarantee provider warranties all approved checks and reimburses the Payee (Merchant) for financial losses incurred as a result of returned checks. The Check Guarantee Provider buys the returned checks that have been warranted from merchants for the full face value of the returned checks. MyECheck merchants utilize Check Guarantee Service (see here) so that they can ship products or provide services immediately without having to wait to determine if the check will be returned unpaid. The Check Guarantee Service also eliminates the need for Merchants to collect on returned checks from their customers.

    there are a few things that must be considered as well. First, are there any secure payment systems at all? Has anyone here heard of credit card fraud? Fraud and hacking are a part of life, that's a fact. The harder we work to secure our systems, the harder frauders work to circumvent the measures we put in place.

    "Ignorance is bliss"

    - Thomas Gray

    There are two parts to our technology that should put us ahead of the curb are that currently via ACH, when fraud occurs for clients, the crooks have up to a 3 day heads start for the transactions to ever occur in ones account in order to react. Ironically, this has been one of the leading opposition to electronic checks using Check 21 Act. Ignorance is bliss, but that's not so when it comes to money… The sooner one knows, the sooner they can react to the fraud. I also like that we are the backend processor that does not lend itself or enable for fraud (discussed later).

    The competition???

    A list of companies have been mentioned by the author of the slanderous, false and misleading article here: PaySimple, Green Payment Processing, PacNet Services, CyberSource, Vchecks, Payment Processing Alliance, Focal Payments, RCC Billing Solutions, Burroughs, Panini, Bluepoint Solutions, Digital Check. These companies are no different than numerous others such as InterPay, VX Gateway and iCard1. All are good companies, but are much better suited as our clients than competitors. They are no more our competition than Amazon or PayPal.

    The company

    There is no denying the company has been in business for many years, they have had a string of bad luck when the 2 banks partnered with MYEC closed their doors during 2010 and 2011. There is no getting around the fact that Ed Starrs has eaten his share of humble pie. I will not recover all details covered in my previous 2 articles here, but it amazes me that in light of the company having over $1 million in debt, Ed has always stayed the course, and has took hold of his responsibilities and has done an amazing job over the past 2 quarters at dwindling that debt to a fraction of what it once was. Not to mention the company has generated OVER $1 million in revenue since restarting operations over the course of 2 quarters with little overhead.

    As an extra note, I would like to comment in regards to the 6 million shares in exchange for $53,252 ( or 0.0088 cents per share) which was not even mentioned by the blogger. Many feel/felt like this was an unreasonable exchange as it may seem very cheap when looking at the PPS today, but if you look at the previous trading days to the transaction (on Feb 26th 0.0088 was about the middle between the high & low) it was not as cheap as some may think.

    Final Rebuttal

    Finally I will offer insight to the comments of the author quoted below (most anyone who has followed recent press releases will already know the answer to some of it)

    "You see, in October 2012, Mr. Starr, acting on behalf of My eCheck voluntarily terminated the company's registration with the SEC. Hence the company became an alternate reporting entity on the OTC. That means that the company doesn't need to explain what Mr. Starrs did to earn those 3,000,000,000 shares of common stock.

    With the last annual report filed, we find out that Mr Starrs only owns just over 2 Billion shares of stock. No where in the filings available on OTC do we find an explanation of what happened to the other 1 Billion shares of common stock.

    Provided those shares were subject to rule 144 restriction, and given the time they were issued (2012), they would be eligible to trade freely in the market now. Were some unrelated third party to decide to liquidate 1,000,000,000 shares in the market where the average daily volume has been less than 25 million shares, they would undoubtedly move the market. And that market movement would NOT be in the direction desired by long shareholders."

    What can I say, it's true… Ed did voluntarily stopped filing with the SEC…

    After our business partners went belly up and we were no longer able to generate revenue the company went "dark" by filing SEC Form 15. Though not required, Mr. Starrs continued filing OTC disclosures in order to updates his shareholders with pertinent information.

    Here's a great presentation provided by Ellenoff Grossman & Schole LLP.

    The "Going Dark" presentation lists these benefits for filing a Form 15:

    1. Significantly lower operating costs

    2. No SOX 404 compliance

    3. Management can focus more on the business

    4. Reduces potential liability for officers and directors

    5. D & O insurance costs will likely decrease

    6. Shares can still trade on the Pink Sheets

    7. Less public scrutiny and disclosure

    8. More confidentiality regarding business activities

    9. Simplified corporate governance

    10. Greater freedom to explore extraordinary corporate transactions

    As per the 1billion "Missing" shares it was filed with the OTC markets and PRed here


    There are risks, there always are when investing in stocks, I'm not opposed to knowing the good and bad of any investment that I own. Originally when the blog had been discovered I had hoped that the author simply did not understand the industry, the company or our patent well and had intended to simply be factual in my rebuttal, but his intentions to discredit and harm the company seemed clear when he removed any comment from his blog that presented factual information opposing his views in order to deceive shareholders. He clearly sees value here and is willing to take inconceivable steps to profit off of the fear of others. I welcome ALL feedback (good or bad)

    It is my hope that Seeking Alpha in light of Investor RockieK's deceitfully and misguiding opinions in order to profit from his privilege as a poster here, will re-evaluate the manner in which people can post unregulated and unverified information in the future for instablogs (even at my own expense) I have, and will continue to be truthful and as factual as possible to uphold the integrity of myself and the site.

    All investors should do their own due diligence whenever making any sort of investment regardless of popular belief or source.

    Disclosure: I am long MYEC.

    Apr 19 1:05 AM | Link | 12 Comments
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