The Single Worst Company I Have Ever Shorted, Prepare To Laugh

Posted by Timothy Sykes on Tue 16th of Jun, 2009 02:11:09 PM

Despite its small size, this is definitely the single worst company I’ve ever shorted…this morning, this is what I sent to TIMalert subscribers:

Shorted 3000 GWSC at $2.76, Up 1000% & A Late SEC Filing…i’ve talked about this in my premarket watchlists, Thinkorswim seems to have plenty of shares available…this is a pump & dump as they have paid for all the press they’ve received, their contract is dubious and they just delayed filing their quarterly report in THIS SEC filing yesterday they didn’t have a PR announcing the delay, only positive PRs of course!)…the stock is up from 25 cents/share in a few days, still a low marketcap, still risky, but i kepy mt position small as i can and will build my short if it continues spiking…volume has already begun to fade and there was a classic morning panic all the way down to $2.20ish so there is some solid downside today…my goal is to cover under $2 as I think shorts have simply been squeezed and now reality will set in

Check out the ridiculous pump & dump chart (learn more about this pattern in my original PennyStocking DVD as it happens over and over and it’s the one pattern that made me a millionaire:

gwsc The Single Worst Company I Have Ever Shorted, Prepare To Laugh

On top of this being a chart that looks to be rolling over, there are mannnnnny verrrrrry nasty segments I’ve lifted from the company’s last quarterly report SEC filing HERE (their most recent one was just delayed yesterday…which they didn’t have a PR for, it was just another SEC filing HERE…true incompetence/embarassment)

My favorite parts from the following: the company has less than $1,000 cash, no audited financials, they’re delinquent in paying suppliers, they can’t pay their workforce so they’ve laid people off, they can’t raise $ because lenders want personal guarantees from management (who don’t appear to be willing to give those), they’re in a legal battle with rumored stock promoter/manipulator Douglas Furth & Co. (one of the largest shareholders in the blatant pump & dump SPNG) and they have a $100,000 loan that they can’t pay back!

Yup, it’s pretty much the worst news all around, the only positives, which they are quick to mention in PRs galore (which they’ve paid for with big cash compensations) is that they’ve submitted plans for a big solar project…yup, that’s right, they didn’t win any contract, they just submitted plans…and given the company’s dire financial situation and sketchy sketchy background, I’d say the chances of them winning this contract is less than 10%…

Oh yes, that CEO interview on SmallCapVoice.com the other day was paid for with (read the disclaimer HERE):

GWSC: Small Cap Voice received $40,000 from the company and 150,000 restricted shares subject to Rule 144 of the Securities Act of 1933 from the Company on 7-15-08 for 90 days of service. Small Cap Voice received an additional 275,000 restricted shares subject to Rule 144 of the Securities Act of 1933 from the company on 11-15-08 for an additional 180 days of service.

Kinda funny that SmallCapVoice.com’s 275,000 restricted shares just became unrestircted in the last month, hmmmmmmmmmmmmmmmmmm aka the SEC is incompetent if they don’t halt this stock for blatant stock manipulation!!!!!!

And that positive SmallCapSentinal feature the other day that was ticker spammed to every major solar stock….that was paid for too with 30,000 shares:

Integrity Media Inc. (IMI) provides no assurance as to the subject company’s plans or ability to effect proposed actions and cannot project capabilities, intent, resources, or experience. The subject companies haven’t always approved the statements made in this report. This report is neither a solicitation to buy nor offer to sell securities and is for information purposes only and shouldn’t be used as basis for investment decisions. IMI isn’t an investment advisor, analyst or licensed broker dealer and this report isn’t investment advice. IMI is the beneficial owner of 30,000 restricted shares of GWSC provided by Emerging Markets Consulting LLC, an investor relations consultant to GWSC, for this report and other advertising services. Paid reports constitute a conflict of interest as to IMI’s ability to remain objective in communication regarding subject companies.

As if they’re actually gonna any contract with $780 in cash!!!!! The only thing this pump & dump is certain of is that the company is gonna use this spike in stock to raise precious capital in order to survive…my guess is in the $0.75 cents-$1 range, which would still be 3-4x what the stock was trading at before the pump happened.

My God, I love classic pump & dumps like this, they’re SO OBVIOUS with a little research (I explain my research process for 6 hours in my TIMfundamentals instructional DVD package)

Anyway, besides the stock manipulation, here’s the nasty SEC filings with the laughably horrific parts in bold:

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at January 31, 2009, and for all periods presented herein, have been made.

For the Three Months Ended
January 31, 2009 2008
REVENUES $ 50,916 $ 150,878

COST OF GOODS SOLD 3,129 105,001

GROSS PROFIT 47,787 45,877

January 31, October 31,
2009 2008
ASSETS (unaudited)
CURRENT ASSETS

Cash $ 780 $ 7,101
Accounts receivable, net 5,830 5,945
Inventory 123,916 127,044

Total Current Assets 130,526 140,090

PROPERTY AND EQUIPMENT, net 28,700 32,702

TOTAL ASSETS $ 159,226 $ 172,792

Common stock issued for services at $0.58 per share 2,200,000

Our operating expenses had increased significantly during the last quarters of 2007 as we increased our office facilities, hired new employees and consultants, increased our ecommerce sales, and increased our competitive bidding activities; in 2008, due to a lack of operating capital and
our inability to acquire purchase order and accounts receivables financing, as well as equity financing, we had a series of layoffs, dramatically decreasing our workforce
. We also could not complete occupying our new facility (Suite C12 in our existing complex) and began negotiations
with our landlord for assistance in subleasing that facility. Our lack of financing has also affected our ability to complete some orders in a timely fashion.

Because of our cash flow problems, during the quarter ended January 31, 2009 we were delinquent in paying many of our existing suppliers, and our credit rating declined. Our efforts to obtain accounts receivable, purchase order and inventory financing suffered a setback in September 2008 due to a significant decline in our stock price, caused by a group of control shareholders and brokers (which activity is the subject of a lawsuit by the company). Since stock warrants were part of the contractual compensation for our financing agent, this significant fluctuation in stock price affected our ability to raise equity capital. Moreover, the domestic, and then global, financial crisis which followed negatively affected our ability to obtain any type of purchase order, accounts receivable, inventory financing, or equity financing. We are continuing to negotiate for the necessary financing, but the credit crisis and broad economic downturn has caused both significant delays in our obtaining such financing, and much stricter requirements for obtaining such financing, with financial institutions and factors charging higher rates, demanding more comprehensive guarantees (including, in most cases, personal guarantees from our senior management), and requiring our customers’ end-users to qualify as credit worthy. This has negatively affected our business operations.

We are struggling to satisfy our basic cash requirements and we need to raise significant capital to continue as a going concern. We also have significant outstanding invoices from suppliers, some of which are overdue and which are negatively affecting our credit lines with our suppliers.
There can be no assurance that we will raise sufficient funds to continue our business operations.
Cash at the end of the period was $780, as compared with $85,929 at the end of the corresponding period in 2008. Our accounts receivable at January 31, 2009 were $5,830, with inventory of $123,916, as compared with accounts receivable of $102,607 and inventory of $99,881 at
January 31, 2008. We currently do not have any significant cash resources, and our need for capital is our most significant business concern and the single most significant factor limiting our growth. The significant decrease in our accounts receivable compared to the corresponding period
last year was caused by our inability to finance our sales contracts in a timely manner.

On May 27, 2008 the Company filed a lawsuit in the United States District Court, Central District of California, Case No. SACV08-00586 CJC (PLAx) alleging securities law violations and fraud against Douglas G. Furth individually and allegedly dba Millennium Consulting Group, Inc., a defunct Ohio corporation; Mark Fixler; JAG Enterprises, LLC; Michel Attias; Brendon Attias; Timothy Garlin; and various DOE defendants for disgorgement of short-swing profits in violation of the Securities Exchange Act of 1934, Section 16(b) and for recovery of damages for fraud and deceit. On August 7, 2008 we filed a First Amended Complaint adding, among others, defendants Comprehensive Financial Services, LLC, an Ohio limited liability company; The Signature Fund, a purported Ohio limited partnership; Signature Management, LLC, an Ohio limited liability company; Marc J. Bernstein; Legent Clearing LLC, a Nebraska company; UBS Financial Services, Inc., a California company; and
National Financial Services LLC aka Fidelity Investments National Financial Services, a Massachusetts company. Many of these defendants have answered and filed counterclaims, which we intend to vigorously contest.

One of our noteholders has agreed to forebear on the collection of a promissory entered into on September 1, 2007 with the company. As consideration for a six (6) month extension of the loan term, the parties agreed to the following: (i)The interest rate listed was changed from a
fixed rate of 12% per annum to 15% per annum, with payments due on the 15 th of each month; (ii) the conversion rights of the principal and unpaid interest remained, but the conversion rate was repriced at thirty cents ($0.30) per share; and (iii) the company also agreed, in consideration of its appreciation of her assistance and cooperation in extending this loan, to grant the noteholder stock equivalent to the amount of shares which would be purchased by a 10% interest “payment” on her loan. This amount, $10,000.00 (or 10% of the loan) yielded 50,000 shares of stock at a price of $0.20 per share. This was a one time nonrefundable and additional “interest” on her loan. The $100,000 loan, with accrued unpaid interest of approximately $9,000, was due March 1, 2009 and has not yet been repaid.

We are presently negotiating with certain bondholders to convert their bond debt into a combination of common and preferred stock, with designated privileges and preferences, including voting rights, which designations and terms are still being negotiated. The notes are secured by UCC-1 and a security agreement and our inability to renegotiate the notes could result in a foreclosure by the bondholders under their UCC-1 and security agreement.

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  • Big T
    So, basically they have about enough money to buy a sub sandwich without cheese? LOL.

    I love how the Yahoo MB SPNG fundies are unable to see or research the connection between the litigated Furth and King Lebed, whom he has teamed up with on SPNG in the past and has paid for work on the spongey mess.

    As I noted elsewhere, the product is not even good, the car washing sponge leaves residue and other streaking messes in a TV station consumer advocacy challenge given by 2 female reporters recently!

    Keep up your excellent work Tim!
  • Big T
    http://www.kvue.com/news/top/stories/042209kvue...

    Here is the link to the review of spongetech car washing system, by the reporters who said it was a big thumbs down. So, not only are they a pump and dump, but Tim you were too gracious in conceding that their product was decent! LOL
  • Max
    Tim, so where is LiveStock for June 12th. Still not available at LiveStream. Can you do anything about this?
  • nah livestock on the 12h was too bad quality to even save it...gonna be for timalert subscribers ONLY soon so i dont have to deal with all the idiots out therE:

    http://www.timalerts.com
  • Big T
    I would keep livestock free. It is good advertising for other materials, and PR.

    Here's how you can do it AND stop the idiots:

    Require username and password registration to post *any* chats (easy coding, ask Pallian) This stops most of the log in spoofing. Stop the rest of determined morons with code that prevents anonymous proxy server log ins, again, already being done on blogs to prevent banned users from use of anonymouse.org type services to re-offend. Simple as that! All of this can be done at essentially no cost if you implement it correctly and store the code off of Livestream and only have users plug in the specs on their end for the sessions. If they HAVE to have an associated IP address to log in, they cannot use anonymous proxies, but have to have a fixed IP, which most have anyway so it is no big deal.

    Livestock can remain free, you get more exposure and test drives of your trading methods in application for skeptics, AND Timmay keeps his sanity...
  • cool, I found them to in a scan.
  • CJ Rivas
    i coded this once. to get rid of floods in any chatroom is as simple as checking the ip and counting the number of messages from that ip in a given number of seconds. if it exceeds a preset amount , just drop'em and block'em. those bastards!!!
  • Big T
    CJ, I hope Tim reads your post. It IS easy. A shame for a few idiots to spoil it for everyone else. If you require a fixed IP you can avoid proxy server mayhem, and you can code to block acceptance from anyone who tries to use an anonymous proxy to post from. If it is fee subscription based, it cuts down the exposure PR benefit of having a forum like Livestock, to promote DVD and Tim Alert sales, etc.
    A bit of script would solve nearly the entire problem...
  • William
    For livestock, I suggest you offer a $10 per moth deal (or include it as part of you superchirp.com) for people who're NOT timalerts subscribers.

    Anybody was in last week's livestock? Just wondering how bad it was... I could imagine a lot of HEB & SPNG bitter shareholders bashing there (that's why a few dollars per month can effectly keep them away).
  • Big T
    Livestock has been gratis since day one, IIRC, and the same solution of stopping abusers can be as easily solved with a line of code as a subscription requirement. The exposure to a larger group of curious investigators as PR would suffer in the subscription model. Those prospects might result in a bigger pool of Alert subscribers over time, not to mention the plugs for the DVDs that would get more exposure in the free model. Tim can obviously do whatever he wishes as it is his show...
  • ByeBye
    Adam Feuerstein is being investigated by the SEC - File HO1334423 15-Jun-09 04:15 pm The SEC has responded today that they have opened an active investigation File HO1334423. Due to the timing and nature of his articles on HEB.

    you can contact them at

    MERRILY W KATZ
    Office of Investor Education and Advocacy
    U.S. Securities and Exchange Commission
    (202)551-6317

    Looks like you'll be next there Timmy.
  • Rsrch777
    I have been following this company for a while now and I believe you are either confused or intentionally misleading us. There are a few points you seem to have missed or failed to clearly explain:
    1. Late filings, especially for quarterly reports, are not unusual; what matters is why a company is filing late. If you look at the 12b-25 Notice of Late Filing the company filed with the SEC about the reasons it was late in filing, it says: “The Company’s management is presently involved in supervising, preparing, submitting and negotiating various proposals and submissions to utilities and planning and zoning authorities relating to the planning, zoning, proposed development and construction of solar farms. As some of these proposals and submissions have deadlines mandated by those utilities and authorities, these activities are requiring most of the Company’s present management time and has resulted in a delay in completing the Quarterly Report on Form 10-Q. The company will file its report on or before the fifth calendar day following the prescribed due date.” Why didn’t you point that out to your readers?
    2. You list negative financial information about the company from its SEC filings, but if this is a pump-and-dump, why has the company been so honest in its SEC filings that you could pick out these negatives? Like a lot of companies they have financial issues but at least they are honest about them and provided complete disclosure.
    3. Speaking of disclosure, why don’t you disclose how you are shorting this stock? Are you naked shorting? Are other people helping you short it?
    4. Only NYSE and Nasdaq companies are required to file press releases to announce late filings; OTCBB companies are not required to do so and most don’t.
    5. You claim volume has dried up but the stock has traded more and more DOLLAR VOLUME every day.
    6. You say there was a “panic” and then you say you are shorting the stock and you give it a bad write-up. Hmmm, you are betting that the stock price will go down and giving it a boost. Be careful what you admit to in writing; it could come back to bite you.
    7. You say the company has no audited financials; of course that’s not true; just check the filings on EDGAR. Why are you lying about this (maybe to drive the stock price down so you can make money shorting)?
    8. You think GWS is the single worst company you ever shorted? Are you serious? With major banks going under and GM in bankruptcy, you take a shot at a small company that has been around for five years?
  • ha let them investigate adam, his article was clearly a negative catalyst for the stock whether he did anything wrong or not. learn to play off catalysts
  • Rsrch777, your question reek of being an amateur...here are your answers:

    1. i'm short through thinkorswim, look at the big logo smacking your face every comment

    2. late quarterly filings are ALWAYS a negative

    3. Volume has begun to dry up after the initial pump, read 2000 blog posts of mine and learn before u waste my time

    4. in their SEC filing, the company says they have no audited financials, i believe 'em

    5. GM doesn't matter, only dumb CNBC viewers care about that crap, this company has $780 in the bank, has risen 1,000% on paid for promotion and their hook is they've submitted an application, trying to win a big multi-million contract.

    6. suckers will ALWAYS fall for such trickery, thats why I will ALWAYS have a business selling educational products to smarten them up:

    http://www.timothysykes.com/store
  • Rsrch777... Holy cow. Read this article again. Try to pretend you want the company to fail so that you are able to read Tim's analysis with a different voice.

    Based on financial information, this company will not be a going concern for much longer unless they use their remaining <$1k to bribe a locality to award them a contract (or agree to view proposal, because that is newsworthy, right?).

    The thing with these OTC companies is that they can exist in this manner for quite some time. The shares are simply used for a pump to generate funds to keep the dream alive. But... realistically, would you hire this company to do work for a company you worked with? How would they fund a project? Financing isn't exactly easy nowadays.

    You make the point...
    "2. You list negative financial information about the company from its SEC filings, but if this is a pump-and-dump, why has the company been so honest in its SEC filings that you could pick out these negatives? Like a lot of companies they have financial issues but at least they are honest about them and provided complete disclosure."

    I'll tell you why! The law requires that they do so! Full disclosure? There is no place to hide anything. The company barely exists. It isn't exactly AIG or GM where there are places to hide some of the facts.
  • Tim - thanks for the all the credit, but here is some simple math for you;
    150,000 shares issued 7/18/08 followed by a 20 to 1 reverse split in late October equals 7,500 shares. 275,000 restricted shares issued 11/15/08 came due on 6/15/09. Have you ever filed 144? I will be lucky if these are free in the next two weeks. I know facts can ruin a good slam when you are a shorter. Maybe the SEC will be looking closer at you.
  • Watching Livestock for free and reading the free blogs for about 2 months is the reason why I subscribed and bought DVDs.
  • Jenny
    how much does thinkorswim charge you to short otcbb/pink sheets and how can you tell if they are available to short?
  • jenny, costs $10/trade, i've gone over how to short on thinkorswim a dozen times, my subscribers know how
  • Big T
    Alice,

    the reason I changed my own opinion on Sykes has been the free blog and Livestock shows, and have suggested others purchase his products. I think both of those provide a 1-2 punch of marketing that reaches the doubters and skeptics, ultimately leading to more sales.

    I think less exposure will occur from limiting Livestock only to existing or possible Tim Alerts subscribers. Covestor also helps due to its supposed verified trades, to promote his "record". The Livestock shows are really funny and the entertainment aspect helps pitch the products being sold. The blog gives the (late) picks, the show gives the (late, usually) why's and wherefores on specific set-ups in more personal terms...
  • Stuart Smith, u take $ from companies with $780 in cash in the bank and make them out to look like potential investment...and u wanna come on here and tell me i'm doing something wrong? thats funny...have u sold your shares yet?
  • Stuart Smith
    Timothy Sykes you want drive your first hedge fund into the the dirt and claim you know what you are doing? You have enough misleading facts about GWSC to suit your purpose of driving the price of the stock down. As for the shares, I am still holding as they are restricted. You might want to learn a little about the process you claim to know so much about. You seem a bit testy. Book sales down?
  • Stuart, all i did was pick apart the nasty SEC filings, i have no idea when u're gonna sell your restricted stock, i just find it funny u feature a company with so little going for it...wow, they applied for a contract, LOL
  • Cat
    I just want to know, RESPECTFULLY, why you call people amateurs and morons? If you really are in the "right", you should feel no need to reduce yourself to act in the same way as some of the spammers on your site. And why do you feel the need to start or end virtually every post of yours with some plug for your DVDS, like when answering jenny's simple question about trade costs? "my subscribers know how"...honestly, what a put off! I am a subscriber to your timalerts for the first time this month, and sorry to say, this is my first and last month. Whatever good advice you may have, your persona is just tacky and overwhelming...Plus, you spin things to suit you and then attack others when they have a different view. Not professional. I first found your site on a lark and initially thought you were interesting (obviously, if i signed up for timalerts) and I still think your youtube videos are cool overall, but your internet antics are really grating, even after only two weeks. I don't think I am alone in saying I would appreciate a straight-up shooter instead of a kid acting out on in the schoolyard, especially if you expect people to pay you 50 bucks a month. You can ridicule me all you want or take it as an honest opinion from someone who paid you $30 and no longer reads your alerts after roughly two weeks (i'm sure you'll do the former but oh well). I much prefer Tyler Bollhorn's multi-faceted, informative, and non-combative trading info. Lesson learned.
  • Cat, when u get as many questions that u've already answered like i do, u get annoyed and u earn the right to call people morons for their laziness...its also my fault because i need to push my DVDs harder so more people will get them.

    i could care less about being professional, professional DVD salesman are that way because they are afraid of being found out for the frauds that they are...u can think of me however u want, but u will respect my trading strategy because its real
  • PS i could charge 500 for timalerts and it'd still be a deal if u understood how to wait for the perfect setup, consider yourselves lucky i'm still in the mood to teach and share
  • rsrch777
    This company has audited financials; they file with the SEC. Where exactly did you find information on lenders requesting personal guarantees from management? I follow their filings closely and I do not see anything that would even remotely point to such a conclusion.
  • read their quarterly report, its all in there, how else do you think i got those quotes listed above? cmon dude, learn to read
  • Looks like your quote of."GWS is a company with "no contracts" is NO longer true...

    GWS Technologies, Inc. Partners with Dominion Real Estate on Alternative Energy Projects

    Have your readers Google Dominion Real Estate Partners, Inc.

    SCOTTSDALE, Ariz.--(BUSINESS WIRE)--GWS Technologies, Inc. (OTCBB: GWSC - News), an alternative energy company developing renewable energy solutions, announced today that it has partnered with Dominion Real Estate Partners, Inc. (DREP) to provide solutions and technology integration on alternative energy projects in Texas and Arizona.

    GWS will also supply solar panels and equipment to retrofit commercial buildings operated by DREP and assist the company in applying for certification under the Commercial/Industrial Solar Energy Tax Credit Program. The primary goal of this program is to stimulate the production and use of solar energy in commercial and industrial applications by subsidizing the initial cost of solar energy devices. Tax credits can be used to offset Arizona income tax liability; any unused credit amounts can be carried forward for a five-year period.

    “These incentives are continuing to drive the demand for our business,” said Richard Reincke, President of GWS Technologies, Inc. “They are making solar installations economical, and giving businesses a chance to go green with a minimal capital investment.”

    “When we were evaluating the benefits of renewable energy solutions, GWS presented the most comprehensive, cost efficient, and time effective proposal to supply and install the equipment and integrate solutions on our projects,” stated Robert Dwyer, President of DREP.
  • krsone
    Tim, what do you think of this GWSC news today? It does seem kind of legit.
  • krsone, timalert subscribers saw me post this premarket:

    Fluff GWSC PR this morning:

    http://finance.yahoo.com/news/GWS-Technologies-...
    could lead to another wave of pumping

    http://www.timalerts.com
  • krsone
    Thanks for the response, Tim. So are you still watching it to possibly short again?
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