The Company that now calls itself Global Business Markets, Inc. (OTCBB: GBMI) has been shifting its business plan once again. No, make that twice again. On October 22, 2003, Global announced a “growth strategy designed to achieve revenue performance goals for the remainder of calendar 2003 and into early 2004.” It was not the first time this calendar year that the Company (which at various times during 2003 has been called Core Solutions, Sunshine Ventures and Christine’s Precious Petals – not to mention its previous incarnation as Premier Axium) has placed a positive spin on its prospects.
So far that optimism has not been justified. Global Business has lurched from name to name, adopting different, often vaguely described business plans, sometimes shifting management and control, occasionally reinstating former managers,– but always with similar results. By any name, the fiscal picture is dismal – no assets and no revenues according to the most recent financial report.
Central to the latest “growth strategy” – at least according to the October 22nd press release – were plans to acquire the Frullati Café and Bakery in Buffalo Grove, Illinois. It hardly seemed the basis for a vigorous public company.
Perhaps some observers were wondering how the Company (which reported no assets as of June 30, 2003) planned to pay the $50,000 purchase price for the Frullati Cafe and Bakery – an acquisition that Global Business claimed would “produce immediate gross annual revenues of $108,000.”
That no longer is a problem. Shifting plans once again, Global declared that it was now planning to acquire companies in the food and beverage business, with an emphasis on “Juice and Smoothie Bars.”
Did that mean the Company no longer planned to serve baked goods with its beverages? On November 3rd the Company revealed that the Frullati deal had gone awry. Global claimed that it had been unable to complete its due diligence on Frullati, and therefore had converted the acquisition to an “intent to purchase” with an additional thirty to sixty day period to complete the due diligence process.
Global did not say exactly where its due diligence efforts had fallen short, but it blamed the failure to close on “complications with a consultant, Suburban Capital Corporation of Addison, IL and its related associates, which were initially hired to solidify such transactions. The Company declined to say whether it was planning to dissolve its consulting contract with Suburban Capital, but indicated that it had retained legal counsel to review “past, present and future transactions.”
What had “complicated” the Suburban Capital relationship? Global did not say. And while its concern seemed sincere – facts indicate that it hardly was timely. Any relationship between a public company and Suburban Capital was problematic. Seven months earlier, on March 27, 2003, the Securities and Exchange Commission had filed suit against Suburban Capital, and a group of individuals including Frank Custable and Sara Wetzel – each of whom has claimed to be president of Suburban Capital – charging them with orchestrating a massive securities fraud scheme.
According to the SEC complaint, Custable, a recidivist securities law violator, obtained large positions in penny stock companies and then, using nominees including Wetzel, engaged in unregistered stock offerings. To carry out that scheme, Custable purportedly used Suburban Capital to provide financing and consulting services to the public companies. Shares issued to Custable’s nominees were improperly registered by the public companies on S-8 Registration Statements. Custable allegedly then orchestrated campaigns to hype those companies, before dumping the shares on an unsuspecting public.
Considering the serious nature of the SEC charges, why was Global Business doing business with Suburban Capital? And not for the first time. In August 22, 2002 the Company, which then was called Core Solutions, filed a Form 8-K stating that “[m]anagement has terminated consulting agreements and has discontinued transacting any and all business with Suburban Capital Corporation, Frank Custable, Dr. G.K. Kumar, Ed Miers, Sara Wetzel, Robert C. Romine, James Carroll, Metromedia Research Group L.L.C., North Coast Investments, Inc., and each of their respective associates and affiliates.”
That Form 8-K was signed by the Company’s President at the time, Christine Favara. The same Christine Favara who subsequently transferred control of the Company to Edward Miers – one of the people with whom Core Solutions had discontinued doing business.
The Form 8-K did not say why the Company had ended its relationships with that cast of characters. Other public filings indicate that the Company entered into the following consulting agreements:
• On January 24, 2002, the Company entered into a consulting agreement with Metromedia Research Group, LLC to provide investor relations services and as consideration issued 25,000,000 shares of its common stock valued at $500,000.
• On February 12, 2002, the Company entered into a consulting agreement with James Carroll to provide advice concerning management marketing, consulting, strategic planning, corporate organization and structure in connection with the operations of the business of the Company. As consideration the Company granted and issued the consultant 65,000,000 options to purchase shares of the Company's common stock at an exercise price of $0.001 per share. These options were subsequently exercised.
• On February 12, 2002, the Company entered into a consulting agreement Sarah Wetzel to provide strategic planning and marketing consulting services in connection with the operations of the business of the Company. As consideration the Company granted and issued Wetzel 65,000,000 options to purchase shares of the Company's common stock at an exercise price of $0.001 per share. These options were subsequently exercised.
• On February 26, 2002, the Company issued 600,000,000 shares of its common stock to Global Consulting for consulting services performed. Subsequently, Global transferred these shares to an individual and employee of the Company for past services relating to Global.
• On March 1, 2002, the Company entered into a consulting agreement with Thomas Bojadzijev relating to Metromedia Research Group, LLC to provide investor relations services and as consideration issued 37,000,000 shares of its common stock valued at $129,500.
The Company did not indicate that any of those shares or options were surrendered at the time the relationships were terminated. It also did not state the name of the individual employed by Global Consulting who received 600 million shares.
One of those consultants, Sarah Wetzel, whom the SEC describes as Frank Custable’s nominee in several stock scams, filed a Form 13 D in April 2002 indicating that she was the owner of 42.5 million shares of the Company’s common stock – or 5.1% of the outstanding shares.
These disturbing relationships certainly are not likely to boost investor confidence. Then again, there was no apparent rationale for the pattern of Global stock trading that initially followed news of the now temporarily aborted bakery acquisition. According to Yahoo! Finance, a total of 500 shares of Global Business common stock were traded between September 18th and October 14th. Then, volume began to pick up – 70,000 on October 15th; 127,700 on October 16th; 336,900 on October 17th; 1,623,500 on October 20th, 4,695,400 on October 21st.
On October 22nd, the date of the press release, over 38.2 million shares changed hands – and over the next five trading days more than 306 million shares were traded. The trading had a second effect. It dragged down the price of Global Business shares – from around 8 cents on September 19th to less than a penny (although shares did flirt with prices ranging from 9 cents to 15 cents along the way).
Certainly, public investors were not flocking to get a piece of the potential bakery business. So what created the sudden surge? Here’s one possibility. On September 26, 2003 the Company filed a Form S-8 Registration Statement covering 250 million shares of common stock in its “2003/2004 Benefit Plan.” Global Business did not say who would be getting those shares – or when – but the Plan provides that those shares can be used to attract “qualified employees, consultants, and advisors.”
Have those shares been issued – and are they being sold? If so, who are these “qualified” employees and consultants? So far, the Company has not disclosed any new employees, aside from its latest CEO Edward Miers – who it once deemed persona non grata.
Stay tuned.
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