When we first looked at HIV-VAC, Inc. one short month ago (STOCK OR SCHLOCK – HIV-VAC, INC., PART I and PART II) the Company was busy promoting the prospects for its HIV/AIDS vaccine. In a series of press releases, HIV-VAC told investors that laboratory testing of the vaccine was underway in Russia, with plans for human trials in Russia and Africa. The Company had no revenues and had failed to secure financing for its project. Then, on June 15th, HIV-VAC issued a press release announcing "it is in the final stages of completing a $5 million funding package with an Australian investment firm that will be used for the continuing development of its Skinner HIV/AIDS vaccine trials in Russia and Africa."
What a difference a month makes. Since that time, the Company has made no further announcements concerning that impending $5 million financing – but that doesn’t mean HIV-VAC has been idle. On June 28th, the Company entered into a consulting agreement with a New York attorney named Jeffrey E. Jacobson. Under that agreement, Mr. Jacobson agreed "to assist the Company in intellectual property matters, advise the Company in Copyrights and Trademarks, and to assist the Company in identifying acquisition targets for the Company and advise the Company in structuring mergers or other acquisitions."
In exchange for these services, the Company agreed to pay Mr. Jacobson a non-refundable fee consisting of 3 million shares of HIV-VAC common stock (about 8% of the Company’s shares at the time).
Should investors be concerned with the "non-refundable" aspect of that fee? Perhaps, since [e]ither party may terminate this Agreement at any time …upon fifteen(15) days written notice." That means the consultant can, theoretically, cancel the agreement, retain the shares, and never provide any services to the Company.
There’s more. The Company agreed to register Mr. Jacobson’s 3 million shares, immediately, by filing a Form S-8 Registration Statement with the SEC. A Form S-8 Registration Statement differs from other registration forms because it is can become effective as soon as it is filed with the SEC.
One day later, on June 29th, the Company lived up to its commitment and filed a Form S-8 for the shares – meaning the shares could be sold within a day or so after the consulting agreement was executed.
Just how would the consulting agreement with Mr. Jacobson help HIV-VAC further develop, research and test the vaccine? Had copyrights and trademarks suddenly become a priority for a Company that claimed to be dedicated to developing a vaccine against HIV and AIDS? The agreement with Mr. Jacobson makes no reference to the Company’s business plan or its efforts to develop a vaccine.
Did Mr. Jacobson have an extensive background in health care, medical research or AIDS prevention that could prove of value to the Company? Does he practice before the Food & Drug Administration? The agreement does not address Mr. Jacobson’s expertise, but the biography for his law firm offers some insight. Mr. Jacobson is a partner in the law firm of Jacobson & Colfin, P.C., which specializes in Entertainment Law, Trademarks, Video, Comics and Toys, Literary Property, Theater and Intellectual Property Law. His professional credentials include, among other things, membership in the Audubon Society and the Rock & Roll Hall of Fame, and a number of Entertainment Law committees. There is no mention in his firm biography of his affiliation with any medical care or research group.
With Mr. Jacobson on board, had HIV-VAC retained a consultant who could adequately fulfill the Company’s needs, at least in the area of intellectual property, copyright, trademark, mergers and acquisitions? Consider this. On July 19th HIV-VAC entered into a second consulting agreement – this time with an attorney named Bruce E. Colfin. Who is Mr. Colfin? Why, he is Mr. Jacobson’s partner in the law firm of Jacobson & Colfin, P.C.
What were the terms of this agreement? Mr. Colfin agreed " to assist the Company in intellectual property matters, advise the Company in Copyrights and Trademarks, and to assist the Company in identifying acquisition targets for the Company and advise the Company in structuring mergers or other acquisitions." If that sounds familiar, it should; that is precisely the scope of services to be performed by Mr. Jacobson.
The rest of the Colfin consulting agreement also strikes a remarkably similar chord. HIV-VAC paid Mr. Colfin a non-refundable fee of 3 million shares of the Company’s common stock and agreed to register those shares "immediately." Mr. Colfin’s agreement, like that of his partner, could be cancelled by either party, on fifteen days notice.
This time the Company filed a Form S-8 Registration Statement for Mr. Colfin’s shares five days later, on July 24th.
Does Mr. Colfin have a background in medicine, research or AIDS prevention? The consulting agreement makes no reference to his qualifications to assist the Company, so we turned again to the biography of the law firm of Jacobson & Colfin, P.C. There, we discovered that Mr. Colfin’s area of expertise appears to be similar to that of his partner – both specialize in Entertainment Law.
So why has HIV-VAC entered into separate consulting agreements with two partners in a single law firm, whose practice appears to have no relationship to the Company’s current business? Is the Company looking to abandon AIDS research and move into the entertainment industry instead?
What is the status of the Company’s research or its plans to develop, test and market a vaccine? This past month the XIII International AIDS Conference was held in South Africa, and the International AIDS Vaccine Initiative announced plans for Phase I human trials of an AIDS vaccine – but not the one that HIV-VAC says it is developing. Is the Company continuing to move forward with its own tests? If so, what is the status of that $5 million funding? Investors are left to ponder these questions.
One other question haunted us as we reviewed the consulting agreements and Forms S-8 – why did they seem so familiar? After all, as far as we could determine, HIV-VAC had not entered into any other similar agreements.
And then it came to us. In May we published a series of articles on a company called Far East Ventures, Inc. (See, STOCK OR SCHLOCK - FAR EAST VENTURES PART I, PART II and PART III). In the installment entitled FAR EAST VENTURES PART III – CONSULTANTS TO SPARE, we reported that Far East Ventures had entered into two separate agreements, less than two months apart, with two different "consultants," both of whom "coincidentally" occupied the same offices in New York City.
The consulting agreements used by Far East Ventures were identical to the ones utilized by HIV-VAC in almost every material aspect. Each of the Far East consultants agreed to help that Company "to identify acquisition targets" and "in structuring mergers or other acquisitions." The Far East consultants each received 900,000 "non-refundable" shares of Far East Ventures stock, and Far East Ventures agreed to register all of those shares on Forms S-8. As you may have guessed by now, those consulting agreements could also be cancelled, by either party, on fifteen days notice.
Like HIV-VAC, Far East Ventures complied with its obligation and filed Forms S-8 for the consultants’ shares.
The lawyers for Far East Ventures? Jacobson & Colfin, P.C.
NOTE: Shortly after Stock Patrol published its earlier articles on HIV-VAC, we were contacted by a few readers who asked why we had not been in touch with HIV-VAC’s investor relations consultant, Chase Equity Group. In fact we had been. Stock Patrol repeatedly invited Chase Equity Group to submit, in writing, any questions or comments concerning our earlier articles. They did not do so.
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