Long time penny stock failure, Jerry Grisaffi, steps back to the plate to whiff at more knuckle balls.
Written by Janice Shell
February 23, 2015: On 10 February 2015, Totally Hemp Crazy (THCZ) founder, Jerry Grisaffi, had positive news to report: his Rocky Mountain High hemp-infused beverages, the company's flagship product, were nearly finished with the testing phase and would go into production the following week.
|Rocky Mountain High|
A week later, another press release appeared, informing THCZ's shareholders and the general public that an initial production run had been completed at Cold Spring Brewing Company in Minnesota. The enthusiastic Grisaffi directed readers to the company website featuring "dazzling new graphics." Right now, those dazzling graphics are all that can be found there. Apparently the iced tea is "relaxing," the energy drink gives you energy, and the lemonade is "fun." We also learn that at some point the company plans to market alcoholic beverages--tequila sunrise, screwdriver, and more--that are also laced with hemp.
Why hemp? Because it's supposed to be good for you, without containing THC, the cannabinoid that makes you high. (Okay, so the lemonade isn't that much fun.) Hemp, in the form of oil, seeds, or powder, can be sold anywhere in the U.S. Hemp seeds are a good source of plant proteins. What do they taste like? A fan of hemp protein shakes says, "It's hard to put a thumb on, but it's like oatmeal meets grass." Presumably that special flavor won't be a big draw, but energy drinks have enjoyed great success in recent years, despite general agreement that they taste awful.
The real reason people may buy hemp beverages, at least for awhile, and the reason THCZ says it'll sell them, is that to many people they seem a cool idea. A lot of cool ideas attached to pumped stocks have fallen by the wayside leaving shareholders thirsting for their money.
Totally Hemp Crazy
As a company, THCZ has a complicated past. Thanks to inadequate disclosures at OTCMarkets, its corporate history is difficult to untangle. The company was formed in Nevada on 29 October 2000 as Stealth Industries. In January 2009 it became Precious Metals Exchange (PRMX), and then morphed into Legends Food Corporation (LJWY) in May 2011. Legends, in turn, became Republic of Texas Brands, Incorporated (RTXB) in November 2011. Finally, the company changed its name to Totally Hemp Crazy Inc. and its ticker to THCZ in August 2014. Over the years, a lot of shareholder money has been flushed down the toilet on the various iterations.
Information about PRMX and LJWY is thin on the ground; the company didn't begin to make disclosures at OTCMarkets until August 2011, when it caught up with some old information from 2010. PRMX had intended to get into the cash-for-gold business, but encountered problems that were perhaps related to a lawsuit brought against the company by the State of Indiana on 25 September 2009. The suit alleged violations of Indiana law involving robo-calling and the activities of out-of-state corporations. The legal action evidently put a damper on plans to talk people into selling grandpa's old gold studs; according to the first reports filed, they were by that time looking for a new line of business.
Originally, PRMX's president had been Garrett Vogel. He resigned in February 2010, but remained available for what the company called "consultation and special projects." Two other officers, Kenneth Daugherty and Jason Ford, resigned as president and vice president of development, respectively. They were replaced on 6 May 2011 by Laurence Briggs as president, CEO and director, Mark Ussery as vice president, secretary and director, Michael Welch as vice president, CFO and treasurer, and Sher Briggs as vice president and chief marketing officer. It seems odd that such a small company had a need for so many VPs. Jerry Grisaffi was chairman of the board.
With the change of management came the change of name to Legends Foods Corporation, and then to Republic of Texas Brands. The Briggses resigned in early 2012, and Grisaffi took over as interim president and CEO; those appointments were made permanent on 29 May. It was clear from the start that the new company was to be all about food and drink. RTXB announced that it'd be selling Mama Rosa's famous tamales and other Texan speciality foods online; not long after, it claimed it'd inked a deal for its own vodka brand. The vodka would, of course, be made in Texas.
|Grisaffi and RXTB's Vodka|
Naturally anyone can pay a distillery to put his brand on bottles of vodka, or pay a wholesale butcher to "brand" beef. What's required is only the money that's part of the deal. RTXB had no money--according to financials filed just last Friday, THCZ still doesn't. As Grisaffi's plans became more grandiose--in August 2013, he announced the company's intention to purchase a large profitable chain of barbecue restaurants and the real estate that went with them--RTXB was hemorrhaging cash. Only four months later, it filed Chapter 11. Grisaffi, Michael Welch, and Mark Ussery were among the creditors.
|Chart of the RXTB Years|
The 66-year-old Grisaffi has always been, or wanted to be, an entrepreneur. He explained to Opportunist that he'd once operated an automobile dealership, but didn't like the hours, a very telling trait. So he switched to food. One of his first ventures in that arena was a business called Bounty of the Sea, which he founded in 1988. Its premiere product was a hotdog made of tuna. Grisaffi thought "We have the makings of a great new industry. I can see this being a $300 million company within five years." That did not happen, though Jerry assured a reporter that the U.S. Navy had agreed to become a customer. It was then that Grisaffi became involved in several companies subjected to Pump & Dump campaigns. As usual, millions of dollars have been lost by investors in those schemes.
Grisaffi's first foray into the public markets was that as CEO of a public company called The Tracking Corp. (TRKG); he resigned in August 2008. It was incorporated in Nevada in 2003 as Micro Trak GPS, Inc., and its corporate charter is now revoked.
|TRKG Chart During the Grisaffi Years|
By March 2011, Ford claimed he had problems of an unusual kind. In an extraordinary OTCMarkets filing, he explained to his shareholders that "certain persons formerly associated with the company have engaged in fraudulent activities and well as criminal conduct with respect to their claim of ownership in the company." He further accused one of them of impersonating him, manipulating the company's stock price, and illegally accessing THCB's DTC and OTCMarkets accounts. He stated flatly that their object had been to pump and dump his company. He declined to name the individuals in question, but said that as a group they had "a track record of failed public company stocks, including Precious Metals Exchange Corp. (PRMX), OPSY [Optical Systems, Inc.; now Benchmark Energy Corporation, BMRK], DTIM [DTI Medical Corp; registration revoked], and Tracking Corp."
Ford declared that he'd reported what had occurred to FINRA, the SEC and DTC. His accusatory filing has been hidden in the company's "inactive" folder at OTCMarkets. Not everyone believed in Ford's insistence that he was a victim. Even before he posted his filing, a Ripoff Report offered a different version of the tale. According to the author, Ford had colluded in the pump and dump along with several family members, Mark Ussery, Jack Eversull and others.
It's hard to know what to make of all this. Was the real story yet another falling out among penny crooks? What was Grisaffi's connection to THCB? Ford mentioned his TRKG, and PRMX. He also named OPSY, which was headed by BJ Grisaffi.
In the end, the THCB story turned out badly for both Ford and at least some of the people he'd accused. A lawsuit was filed in Nevada by two shareholders, Jerry Monday and Gary Bryant. Ford and his wife did not defend, and the plaintiffs won a default judgment and a declaratory judgment on 20 July 2012. the latter provided that all former officers and directors of THCB, including Arvind Sharma, R.D. Franklin, Fred Wills, Ty Gerot, Jay Novacek, and Mark Ussery, be removed from their offices. Grisaffi was not a party to the suit, although he did own 1,154,780 shares of THCB.
During April 2013, THCB became South American Properties, and on 15 May its ticker was changed to SAMP; by then, controlling interest in THCB had been bought by Jeffrey Love of Lig Assets (LIGA). Perhaps interestingly, only a few months earlier, LIGA and Grisaffi's RTXB had signed a "letter of commitment" by the terms of which LIGA would fund the purchase by RXTB of four barbecue restaurants in the Dallas area. Not surprisingly, LIGA was the subject of several of its own Pump & Dump campaigns.
The ever-ebullient Grisaffi was determined to make quick work of restructuring his company. After all, there is no sense letting a perfectly good shell lie around. To that end, in early 2014 he took a look at the pot sector and decided salvation was at hand. On 10 February, he announced briefly that THCZ was "in negotiations for the exclusive distribution for the State of Texas for a Hemp base energy drink. Hemp products are exploding and we would like to be part of that industry." A few weeks later, he appointed Randy Safford as the new COO and marketing director of THCZ's Cannabis Products Division. Within a week, he and Safford were accepting orders for an energy drink called Chillo through the RXTB website. Now they accept orders through the website chilltexas.com. But is that site owned by THCZ, as some shareholders appear to believe? The domain is registered to The GPS Tracking Network, Inc., which is a privately held company sharing THCZ's address in Dallas.
Interestingly, Dewmar International (DEWM), another frequently promoted stock, also markets Chillo. A quick look at that company's stock chart gives a good indication of DEWM's lack of success with that endeavor.
Grisaffi hadn't lost his flair for attracting publicity. As he was announcing Chillo to the world, a Dallas Observer columnist wrote a flattering piece. Always thinking on the grand scale, Jerry confided that he was "considering an investment in a California [marijuana] grow farm and may buy a couple of vamping shops…" Better yet, when the company exited Chapter 11 in July 2014, he caught the eye of the Wall Street Journal's Bankruptcy Beat. By that time, he'd hired Tom Shuman, a beverage industry veteran he hoped would steer THCZ to success, as CEO. He told the WSJ reporter that he hoped to sell some of his new hemp products in Whole Foods Market. Ironically, he'd tried that decades earlier, with his doomed tuna hotdogs.
|Jerry Grisaffi and daughters|
Grisaffi talks a good line. Thanks to that, and to all the press from and about the company, THCZ is enjoying an uptrend this February. But buyer beware: past results suggest that Jerry may be all hat, no cattle. There is no reason to believe that THCZ will experience any better results than any of the other messes Jerry has had his hand in. Having just reported the lack of any tangible assets and just 229 bucks in revenue, the company seems likely to follow in the footsteps of its predecessor RXTB, and dozens of other pumped beverage and marijuana plays.