|TTDZ Chart to March 7, 2014|
The convoluted "takeover" brought a second public company into play: Privileged World Travel Club, Inc. (PVCL), previously an empty shell. Until very recently, PVCL and TTDZ shared a CEO and beneficial owner, Gregory E. Lykiardopoulos. Although Triton seems to feel that PVCL's shares are worth a buck, it's currently trading at $0.08. Obviously there's a big discrepancy between opinion and reality. The price referenced is contained in an S-1 offering originally filed by PVCL on 6 September 2012; it was was declared effective on 18 January 2013. Charts and historical prices indicate that no shares were sold into the market as a result.
PVCL Chart to March 7, 2014
The same language was repeated in a second S-1, in which a much greater amount of stock is offered, filed on 23 July 2013. It was deemed effective very quickly, on 30 July. All this is important because, as will be seen, Triton--yes, TTDZ, not PVCL--now expects the group that recently purchased the TTDZ shell to buy more than 4 million shares of PVCL for $1 a share.
Like many other things, it is not clear why that purchase--acquisition of Triton by Green Cures--is called a "takeover," when Green Cures is in fact simply acquiring "selected assets."
Triton Distribution Systems
Both companies were, as noted above, controlled by Greg Lykiardopoulos. Lykiardopoulos, in his late 60s, has been involved in the travel industry for most of his life. He's knowledgeable about reservation systems, and has long been interested in creating automated and integrated programs allowing users to plan and book trips. Naturally he sees the internet as an important tool for the travel industry as well as for travelers.
Back then, TTDZ described itself as a "'next generation' web-based travel services distribution company that is in the development stage but anticipates generating revenue in the near future." To that end, it had created a suite of software products to be used by travel agents, available in 11 languages. (Lykiardopoulos himself is, he says, fluent in six.) The company also planned to work with international airlines, hotels, cruise operators and other similar businesses, and hoped to finance foreign joint ventures.
More than two years later, Triton was still a development stage company, and had still generated no revenues at all. Its last Form 10-Q, for the period ended 30 September 2008, made that clear. It also memorialized $27.5 million in deficit accumulated during that time. That's a lot of money spent by a company not bringing in a penny.
In April 2009, the company was officially delisted from the OTCBB for failure to file timely; on 15 October, Lykiardopoulos decided to deregister the company voluntarily, thereby saving the company from possible revocation of registration that would have put paid to its public status forever. On 12 October 2009, he got around to filing an initial information statement with OTCMarkets. TTDZ still had zero revenues. Stock issuance had ballooned over the course of that year; it was brought under control by a 1:150 split effected on 16 September. But the stock issuances continued, and another reverse split--at 1:101--was deemed necessary by 24 June 2010. As yet more stock hit the market, Lykiardopoulos bit the bullet and reverse split again, 1:100, less than six months later, on 18 November. Shareholders were getting killed.
At the end of 2010, TTDZ had no cash, and no revenues. The annual report for fiscal 2011 was more encouraging. Not only had the company booked revenues in the amount of $1.237 million; it had somehow also come by "other current assets" in the amount of $30.3 million, up from $732,281 the year before. Those assets are discussed nowhere in the report. In one section, it's mentioned that:
On September 24, 2009, we purchased all shares of beneficial interest of Baud Acquisition Trust, a California business trust, in exchange for 300,000,000 shares of our common stock. We have had no other material reclassification, merger, consolidation, or purchase or sale of a significant amount of assets in the past three years.The report later specifies that TTDZ owns all of the stock of Baud Acquisition Trust, but even so, it is unlikely to have been worth anything close to $30 million.
A bizarre case of gold fever
All of the above suggest that from inception through 2011, Triton had been a boring company; one that can't have been of much interest to potential shareholders. But it would be wrong to jump to hasty conclusions.
At the very end of 2010, Lykiardopoulos, who's never claimed any work experience outside the travel industry, decided to embark on a venture involving a "profitable mining services company" called Advance Gold Technology (AGT). With the help of long time partner Universal Holdings of Beijing, TTDZ would, in fact, acquire a 51 percent interest in AGT for a mere 20 million shares of restricted stock. Even more incredibly, AGT itself owned 49 percent of something called Rep Berezoveskoye, a Russian mining company with revenues projected to reach $55 million in 2011.
TTDZ stock, which hadn't been trading actively prior to this, soared on the exciting news. In a second press release, this one from 20 December, investors were informed that AGT USA, which had a sister company in Russia, of course, had "overwhelmingly approved" the deal with Triton. Universal Holdings would pitch in by providing loans for AGT's projects going forward. AGT did exist, at least in Russia, and the supposed AGT USA was incorporated in Delaware and had a website, of which a single page may still be seen thanks to the Wayback Machine.
Triton's next press release on the subject offered even more extravagant hype: the "very reputable and respectable" SRK Consulting Ltd of Cardiff, U.K. had placed a value of $572 million on AGT's holdings. This time, the Russian mining outfit was called just Berezoveskoye, and it was described as the Russian AGT's "sister company."
The cherry on top was a breathless announcement released on 18 January 2011, in which it was claimed that Triton had purchased 51 percent of AGT, and that--rather puzzlingly--AGT was therefore a "wholly owned subsidiary" of TTDZ.
|Cover of share purchase agreement|
In this case, though, some message board posters had suspicions. AGT USA's supposed CEO, Edward Rubenstein, proved impossible to locate. Gregory Yudashkin, the company's (real) president, did not reply to emails. Questions were asked; no answers were forthcoming. And then on 3 February, AGT USA put a message, all in red, on the homepage of its website:
"The AGT Company executive team would like to make announcement in regards of the Triton Distribution Systems, Inc. acquisition of 51% of AGT stocks and merging with our Company. None of the stocks was ever purchased by mister Lykiardopoulos. We are do not associate or affiliates in any ways with Triton and CEO Gregory Lykiardopoulos. His statements and PR`s was made strictly on his own without any knowledge of AGT Company or executive team of AGT. All released documentation was made by mister Lykiardopoulos also was falsified by him and have been published without any knowledge of AGT…"
Panicked shareholders insisted that the website must have been hacked. Not so, according to Igor Yudashkin, Gregory's brother:
As the popcorn was passed round, Lykiardopoulos shot back with a press release referencing "fabrications… circulating on the Internet," to which he attached a full copy of TTDZ's share purchase agreement with AGT. Saying he was perplexed by the original message on the AGT site, and several others that followed, he vowed to get to the bottom of the matter.
In a Business Insider article from late February, John Helmer, a reporter living in Russia, offered background on the Berezoveskoye mining company and on AGT, but said no one involved with either company, or with the Russian government agencies that oversee mining, had responded to queries.
Lykiardopoulos dropped the subject of AGT as well. In an update on the company's progress issued on 15 April, he noted only that "due to the legal ramifications involved in the AGT deal, Triton cannot comment any further on the AGT deal." The entire fiasco was neatly swept under the rug.
Instead of offering some kind of resolution, TTDZ, along with its Chinese partner Universal Holdings, shifted its interest to a Nevada gold mining property it insisted was promising. By the end of June 2011, Triton's gold fever had subsided, and no more was heard of the yellow metal.
Neither adventure rated even a mention in the company's annual report for fiscal 2011.
Privileged World Travel Club
Privileged World Travel Club (PVCL) was, until recently, TTDZ's sister company, in every sense of the word. As its name suggests, it is in the travel industry. Its CEO is Greg Lykiardopoulos.
On 6 June 2012, Richard Chiang of Danville, California filed a Form 10-12G with the SEC to register the company, which at the time was called Apex 4 Inc. Chiang chose to register it as a blank check. On 16 July, Lykiardopoulos was appointed to the board. Two days later, Lykiardopoulos took control of the shell, paying $40,000 for all of its stock. He announced that he intended to transfer Apex's 10 million shares to Triton, and change the new company's name to Privileged World Travel Club. The plan was for Triton to license its reservation software to PVCL for an initial $2 million annually.
PVCL explains in its SEC filings that it intends to appeal to people who are attracted by the idea of luxury travel, but can't quite afford it. There are three membership tiers, each with sub-levels, providing a range of benefits to participants. It costs between $20 and $150 a year to join. The priciest package, "Imperatorial Membership," offers various kinds of discounts and upgrades, free Disney World entrance, a free Amtrak trip, a spa and massage, and more.
At the moment, PVCL aims its service at people in the U.S. But it says that it is working on what could be a far more lucrative business: the China trade. As a middle class develops in China, travel has become accessible to increasing numbers of citizens. In that connection, on 8 October 2012 the company reported an agreement with China International Group Travel ("CIGI") to develop a website CIGI can use to book tours to the United States.
Though PVCL has been diligent in keeping up with its SEC filings--in addition to periodic reports, it's also done two S-1 offerings--its blank check status appears to be a lingering problem. In its most recent 10-Q, for the period ended 30 September 2013, it says it is not a shell company, but its Edgar heading describes it as a blank check. As early as August 2012, the company declared that it was no longer a shell, but the SEC wasn't satisfied, as a number of comment letters from the agency and responses from the company indicate. Questions were also raised about PVCL's relationship to TTDZ.
That PVCL would like to forget its status as a blank check is not a surprise. Blank check companies have no significant assets or business. They're also called "shell companies." Rule 144 is not available to blank checks, making financing more challenging. Once the company has begun doing business, or has acquired significant assets, or both, it can declare the change in status. A year after that, as long as it stays current with its SEC filings, Rule 144 will become available, which means the company can do private placements, and that buyers of those offerings will be able to resell their originally restricted stock six months later.
Takeover by a Previously Successful Businessman
For Triton and its shareholders, 2011 had been active, though not in an entirely good way. By comparison, the next two years were pretty dull.
That came to an end on 16 January 2014, when the company revealed that it had received a letter of intent from a third party interested in purchasing "selected assets" of the company. Those assets would include Lykiardopoulos's control block of shares. The remaining assets, which presumably would include the software licensed by TTDZ to PVCL, and the company's liabilities would be rolled into a new entity that will be owned by PVCL.
In other words, Triton would sell its public shell to the mysterious stranger, and move its assets and liabilities into an infant PVCL subsidiary.
A week later, the name of TTDZ's suitor was disclosed. He was David Osegueda, comically described as a "previously successful businessman" from Los Angeles, head of an investors' group. The group's intention was to form a new California company to move into the shell they wished to buy.
By the terms of the proposed agreement, Osegueda and his investors would pay Triton an initial $65,000 for the shell, 450 million shares of TTDZ, and 4,062,500 shares of PVCL, "priced at $1 a share," to be disbursed to current Triton shareholders as a dividend. In addition, Triton would allocate 740 million shares priced at $0.00405 per share, to be held in reserve for an "offshore investor" willing to throw another $3 million at the company for operating capital.
The "pricing" of the PVCL shares at $1 apiece goes back to the S-1s filed by PVCL in 2012 and 2013. But by 23 January, the day the agreement was published, PVCL was trading, very lightly, at $0.50. It will be recalled that when Lykiardopoulos bought the Apex 4 shell, he sold its 10 million shares to Triton. Of those shares, 1.875 million were cancelled. TTTZ became the sole shareholder of PVCL, with 8.125 million shares. On 20 July 2012, Triton filed a Form 3 with the SEC, declaring ownership of those shares. Under the takeover agreement, half of them would go to the Osegueda group; the "new" TTDZ would then distribute them as a dividend to its shareholders.
The PVCL shares are apparently part of what the new owners get for their $65,000. But why say they're "priced" at $1? That makes no sense.
For his part, Lykiardopoulos would surrender his collection of TTDZ preferred stock, and 305 million shares of restricted commons.
Obviously the unnamed offshore investor would end up with a larger stake in the company's common than Osegueda's group. The latter, however, would control the company through the single share of Series A preferred that would be conveyed to them by Lykiardopoulos. It is not clear what will be required of the Osegueda group after the "initial payment" has been made.
On 30 January, Triton dropped a bombshell in a supplemental information report filed with OTCMarkets, noting that "this report reflects the change of the takeover agreement and the increase of the Shares Outstanding that will be controlled by Green Cures, Inc., a diversified company operating in the legal cannabis business." That makes very little sense, given that the filing is supposed to cover the period ended 30 September 2013, but never mind: penny players ever on the watch for a new pot stock were thrilled.
The Dead Lawyer
TTDZ dropped another kind of bomb. As required by OTCMarkets, it filed an "Attorney Letter with Respect to Current Information." Nothing remarkable in that, on the face of it. Except, as it turned out, the lawyer in question had been dead for some time.
How could such a thing happen? On 30 January 2014, the day the Mugg opinion was filed, Triton listed Tad Maliander as its legal counsel in its annual report. How did Mugg end up contributing a postmortem opinion?
A few days later, TTDZ issued a press release containing an incredibly lame explanation of its "error". It said that on the 30th--the day the letter was filed--it had called OTCMarkets asking if Mugg's firm was still in good standing. Assured that it was, TTDZ contacted the firm, and "placed the order for the Attorney Opinion Letter with someone acting as an associate…" Really? Obtaining an attorney opinion is like calling Domino's for pizza?
Funnier still, TTDZ self-righteously says that it then decided to "remove the Opinion letter from the OTC site" and start its own investigation. But they can't remove filings from the OTCMarkets site; the most they can do is move them to "inactive," where they're still available for anyone to see. It must have been a busy time. The company added that it got a call from a FINRA representative who asked many questions and took copious notes.
It was only on 16 February that they managed to obtain the necessary opinion, this time purportedly written by Tad Maliander, an actual living lawyer. One has to wonder why TTDZ didn't just go to Maliander for the opinion letter in the first place rather than conjure up a phony letter from a dead attorney.
TTDZ's counsel, despite the fact that as nearly as can be ascertained, they were never TTDZ's counsel. Mugg & Tang no longer exists. Shuyuan Tang now has her own practice, Tang Law Office. Mugg is, as, ah, previously noted, dead. The reasons behind the company's reluctance to make the necessary change is difficult to understand.
The Dead Lawyer incident cast a pall over the stock for a few days, but traders' spirits soon rallied. Triton was, after all, officially yet another brand new marijuana stock. The OTC marketplace clearly can't have enough. There are by now more than 100, most of them run by people with no experience in the business, but who cares?
It was formed in Winnetka, California on 28 January 2014. It's registered a couple of websites--greencuresinc.com, allcannabis.com, allbotanical.com--and a few trademarks. The products in the works include Magic Hemp Seed Protein Powder and a lip balm made with hemp seed oil. Looks as if they'll be needing some more original ideas; you can buy both at Amazon right now, from a wide range of vendors at modest prices. It certainly seems like this company and the TTDZ takeover were designed to take advantage of the current mania for penny stock marijuana plays.
The "takeover" transaction was completed on 3 March; now Green Cures is now apparently on its own, presumably pleased to inhabit its new shell. It plans shortly to introduce a new management team and a board of directors.
The fledgling company wasted no time: on the 5th it announced the acquisition of Futuremarijuana.com and its "online network portfolio." Futuremarijuana.com is a junky, chaotic site that is difficult to make much sense of. The idea is to promote pot as a medicine, and especially as a cure for cancer. While many medical researchers now believe cannabinoids have important medical uses, there is a difference between treatments and cures. Much research still needs to be done.
Disturbingly, the site features a page about the Burzynski Clinic in Houston. Its founder, Stanislaw Burzynski, is a Pole who's made a new home, and a rather large fortune, in Texas.
|Burzynski in old photo|
That said, it's not clear whether Burzynski uses medical marijuana in his practice, or even approves of it. Perhaps futuremarijuana.com merely wants to pay tribute to someone who injects his patients with urine in the belief it'll make them better. Either way, though, the site is amateurish and unintelligent.
One hopes that Green Cures' plan is not simply to look as if they're keeping busy with important acquisitions and the development of breakthrough products like organic lip balm, while what they're really keeping busy with is selling stock.
Assuming, of course, that the deal's for real. Remember, the AGT farce resulted in a "completed" transaction with a signed and sealed stock purchase agreement, too. Those who bought into that story learned that when it sounds too good to be true, it probably is. Green Cures is a similar high-energy pump; one that could turn out the same way, or fail miserably for other reasons. Simply saying you're in the pot business doesn't make you a viable pot company.