The SEC, on time, filed a Reply in Support of their Motion for Partial Summary Judgment. AEHI, in filing their earlier Response to the SEC's motion, attached a document it called a "Joint Statement of Disputed Material Facts," covering both defendants AEHI and Don Gillispie.
In their reply, the SEC characterized that Statement of Disputed Material Facts as so bad that they filed a motion to strike that statement from the record.
Highlights:
"AEHI’s public filings show a ceaseless trawl for cash beginning in October 2006 (before the first of the 23 PPMs defendants call “offerings”), through the filing of this lawsuit in December, 2010. SUMF ¶ 22.5 In fact, a sideby-side review of AEHI’s monthly stock sales against defendants’ chart of the 23 PPMs selected by AEHI shows no correlation between the sales and the timing of the supposed 23 offerings."
From the Motion to Strike: (emphasis added)
3. Defendants Inappropriately Rely on “Privileges” to Shield Evidence
In a further attempt to limit the Court’s consideration of relevant evidence, defendants rely on privilege arguments that are contrary to law. First, though defendants do not dispute that Gillispie asserted his Fifth Amendment privilege during his April 27, 2012 deposition in refusing to testify substantively to the questions posed, defendants nevertheless claim that his refusal to answer was not made “on the ground that the answer would tend to incriminate him.” The law says otherwise. A person does not have “carte blanche by virtue of the Fifth Amendment’s self incrimination clause to refuse to answer a question,” but can invoke the privilege only if “the answer one would give if one did answer it (and answer it truthfully) must have some tendency to subject the person being asked the question to criminal liability.” “To claim the privilege validly a defendant must be faced with “substantial hazards of self-incrimination, that are real and appreciable and not merely imaginary and unsubstantial.” Accordingly, the only inference that could be drawn from Gillispie’s refusal to answer questions is that the answers would tend to incriminate him.
Here is the SEC Reply:
The SEC's Motion to Strike:
Former AEHI CEO Don Gillispie
OK, everyone, I've got to step out for just a minute. I'll be right back, I promise!
Wednesday, July 25, 2012
Wednesday, June 6, 2012
SEC Files Motion For Partial Summary Judgment Against Alternate Energy Holdings, Inc., and CEO Don Gillispie
On June 1, the SEC filed a Motion for Partial Summary Judgment against AEHI and CEO Don Gillispie based on a very interesting "Statement of Undisputed Material Facts" which contains multiple references to Gillispie's assertion of Fifth Amendment rights and the fact that by so doing, he "removes any chance that any other explanation can be offered." The Memorandum in Support also points out that, "Parties are free to invoke the Fifth Amendment in civil cases, but the court is equally free to draw adverse inferences from their failure of proof.”
The Memorandum goes on to explain, "In any event, Gillispie is now precluded from presenting evidence in opposition as to matters on which he has invoked the Fifth Amendment privilege, including his knowledge." (p.24) (emphasis added)
See the Memorandum in Support
Here is the SEC's Statement of Undisputed Material Facts upon which they base the Motion for Partial Summary Judgment, included below that. The actual SEC Motion:
The Memorandum goes on to explain, "In any event, Gillispie is now precluded from presenting evidence in opposition as to matters on which he has invoked the Fifth Amendment privilege, including his knowledge." (p.24) (emphasis added)
See the Memorandum in Support
Here is the SEC's Statement of Undisputed Material Facts upon which they base the Motion for Partial Summary Judgment, included below that. The actual SEC Motion:
Tuesday, June 5, 2012
Source Capital Group Exec Scolded AEHI CEO Don Gillispie for "Inappropriate and Misleading" Stockholder Communication
A few more interesting nuggets are found in the latest pile of documents filed in support of the SEC's motion for partial summary judgment. Alert readers may recall the the post some time ago discussing "DonSpeak" and Gillispie's constant press release claims to "have funding commitments" which he directly contradicted in all of the company's quarterly and annual reports.
On September 9, 2009, AEHI CEO Don Gillispie sent out a shareholder update and stock solicitation (also posted on his "Clean Energy" blog here) which made the claim that that, "“The Idaho reactor, Idaho Energy Complex, is the process of seeking local approval and we expect it by year’s end.... We have a funding commitment from Source Capital for the site."
That particular notification did not sit well with Source Capital Group's "Senior Managing Director of Investment Banking," Richard Kreger, who wrote to Don a few days after the update:
"It was inappropriate and misleading for the company to notify its shareholders that the company has a funding commitment from Source Capital. What the company has from our firm is a commitment to raise capital for the company on a “Best Efforts” basis. Please clear all communications with us before communicating this kind of information with the public.
Here is the document filed by the SEC June 1, which has the email from Mr. Kreger to Don: (go to page 2 of 64, AEHI's "inappropriate and misleading" shareholder communication is right below it.
Interestingly, it was not the first time Mr. Kreger scolded Don for going too far with his "misleading" claims.
Here's the text of a June 5, 2009 AEHI Press Release:
"AEHI signs agreement with Source Capital Group to fund Idaho nuclear site Boise, Idaho, June 5, 2009 – Alternate Energy Holdings, Inc (OTC: AEHI.PK): AEHI signs an agreement to utilize Source Capital Group, Inc. to raise capital for the Idaho nuclear plant site project this week. The funds will cover land, water rights and engineering services to obtain NRC approval to construct and operate an advanced nuclear plant in Elmore County, Idaho. CEO Don Gillispie said, "This is a major step in the process to bring the first commercial nuclear plant to Idaho and the first advanced nuclear plant to the western US that is so in need of clean, low cost base load power to sustain industry and agriculture. We are very pleased to have a company with Source Capital's experience in raising funds for energy projects on board." Richard Kreger, Senior Managing Director of Investment Banking for Source Capital, stated that “Mr. Gillispie and his team have an extensive background in the nuclear power industry and have developed a compelling plan to create a new and much needed energy source for the western United States. We are excited to bring the merits of their vision to investors in an effort to ensure the success of this worthy project.” David Harris, President of Source Capital Group, Inc., affirmed that “clean, low cost energy is one of the most vital areas of focus for our nation’s future. Source is pleased to have the opportunity to leverage its financial services expertise in the energy sector to raise capital for AEHI and this important initiative.”
Mr Kreger sent this admonishment to Don after reading the press release:
“You should have forewarned me about that, number 1. Number 2, I requested that you remove my quote. This is not the way to kick things off. Number 3, I will not speak with reporters at all should they call me as the company is public and I can not disclose material non-public information in regards to this project to anyone not under NDA with the company.”
That email exchange is on page 53 of this document from the SEC filing:
On September 9, 2009, AEHI CEO Don Gillispie sent out a shareholder update and stock solicitation (also posted on his "Clean Energy" blog here) which made the claim that that, "“The Idaho reactor, Idaho Energy Complex, is the process of seeking local approval and we expect it by year’s end.... We have a funding commitment from Source Capital for the site."
That particular notification did not sit well with Source Capital Group's "Senior Managing Director of Investment Banking," Richard Kreger, who wrote to Don a few days after the update:
"It was inappropriate and misleading for the company to notify its shareholders that the company has a funding commitment from Source Capital. What the company has from our firm is a commitment to raise capital for the company on a “Best Efforts” basis. Please clear all communications with us before communicating this kind of information with the public.
Here is the document filed by the SEC June 1, which has the email from Mr. Kreger to Don: (go to page 2 of 64, AEHI's "inappropriate and misleading" shareholder communication is right below it.
Interestingly, it was not the first time Mr. Kreger scolded Don for going too far with his "misleading" claims.
Here's the text of a June 5, 2009 AEHI Press Release:
"AEHI signs agreement with Source Capital Group to fund Idaho nuclear site Boise, Idaho, June 5, 2009 – Alternate Energy Holdings, Inc (OTC: AEHI.PK): AEHI signs an agreement to utilize Source Capital Group, Inc. to raise capital for the Idaho nuclear plant site project this week. The funds will cover land, water rights and engineering services to obtain NRC approval to construct and operate an advanced nuclear plant in Elmore County, Idaho. CEO Don Gillispie said, "This is a major step in the process to bring the first commercial nuclear plant to Idaho and the first advanced nuclear plant to the western US that is so in need of clean, low cost base load power to sustain industry and agriculture. We are very pleased to have a company with Source Capital's experience in raising funds for energy projects on board." Richard Kreger, Senior Managing Director of Investment Banking for Source Capital, stated that “Mr. Gillispie and his team have an extensive background in the nuclear power industry and have developed a compelling plan to create a new and much needed energy source for the western United States. We are excited to bring the merits of their vision to investors in an effort to ensure the success of this worthy project.” David Harris, President of Source Capital Group, Inc., affirmed that “clean, low cost energy is one of the most vital areas of focus for our nation’s future. Source is pleased to have the opportunity to leverage its financial services expertise in the energy sector to raise capital for AEHI and this important initiative.”
Mr Kreger sent this admonishment to Don after reading the press release:
“You should have forewarned me about that, number 1. Number 2, I requested that you remove my quote. This is not the way to kick things off. Number 3, I will not speak with reporters at all should they call me as the company is public and I can not disclose material non-public information in regards to this project to anyone not under NDA with the company.”
That email exchange is on page 53 of this document from the SEC filing:
Sunday, June 3, 2012
AEHI CEO Don Gillispie: "Based on the advice of Counsel, I invoke my rights under the Fifth Amendment and decline to answer." - 134 Times!
In a sworn deposition with SEC attorneys on April 27, 2012, Alternate Energy Holdings, Inc. CEO Don Gillispie asserted his Fifth amendment right against self-incrimination no less than 134 times in about an hour and a half. Many of the questions are very simple, like the first one: "Mr. Gillispie, are you married?"
Some very interesting developments alongside the SEC case appear to have motivated Don's reluctance to speak. Page 27 has the most intriguing partial information, some of which has been redacted by the SEC. Don's attorney says he is "representing him in connection with...." and five lines are blacked out. He goes on to say "In my experience people who are investigated who are charged criminally may be innocent, and in Mr. Gillispie's situation, I mean, he certainly denies any criminal wrongdoing."
On page 28, the SEC attorney, in explaining the situation, gives us a few more clues:
"Just at the outset I would say that any criminal investigation is not within the purview of the SEC. It's within the purview of the US Attorney's office here in Boise. And, of course, if you have questions about that, I would refer you to the US Attorney's office." Then, three and a half more lines are blacked out.
Something very interesting is going on alongside both of AEHI and Gillispie's Federal Court cases, which are only civil, not criminal cases.
There are more clues scattered about the record- a reference in an earlier response to a motion to compel in which AEHI refers to the government having "seized computers," AEHI filing motions to seal documents which could "cause harm to defendants" if made public, and in a new court case filed in Payette county, (paragraph 51 on page 43, this little nugget:
"Payette County officials not only ignored evidence of fraud that had been presented in US District court, but they also apparently ignored the existence of a federal criminal investigation of the AEHI stock fraud scheme. On February 9, 2011, Payette County received a request for records from Special Agent Melissa Ripley of the U.S. Department of Treasury, Internal Revenue Service, Criminal Investigation Division." (emphasis added)
Below are the actual deposition and Payette Lawsuit documents:
Some very interesting developments alongside the SEC case appear to have motivated Don's reluctance to speak. Page 27 has the most intriguing partial information, some of which has been redacted by the SEC. Don's attorney says he is "representing him in connection with...." and five lines are blacked out. He goes on to say "In my experience people who are investigated who are charged criminally may be innocent, and in Mr. Gillispie's situation, I mean, he certainly denies any criminal wrongdoing."
On page 28, the SEC attorney, in explaining the situation, gives us a few more clues:
"Just at the outset I would say that any criminal investigation is not within the purview of the SEC. It's within the purview of the US Attorney's office here in Boise. And, of course, if you have questions about that, I would refer you to the US Attorney's office." Then, three and a half more lines are blacked out.
Something very interesting is going on alongside both of AEHI and Gillispie's Federal Court cases, which are only civil, not criminal cases.
There are more clues scattered about the record- a reference in an earlier response to a motion to compel in which AEHI refers to the government having "seized computers," AEHI filing motions to seal documents which could "cause harm to defendants" if made public, and in a new court case filed in Payette county, (paragraph 51 on page 43, this little nugget:
"Payette County officials not only ignored evidence of fraud that had been presented in US District court, but they also apparently ignored the existence of a federal criminal investigation of the AEHI stock fraud scheme. On February 9, 2011, Payette County received a request for records from Special Agent Melissa Ripley of the U.S. Department of Treasury, Internal Revenue Service, Criminal Investigation Division." (emphasis added)
Below are the actual deposition and Payette Lawsuit documents:
Thursday, November 17, 2011
AEHI CEO Turning Failure Into Success: How to Not Do Your Homework and Still Get a Big Fat Raise
The Dog Keeps Eating Our Homework, part...what, 5?
This has been covered before, but now it's starting to look like a bad habit:
April 1, 2011: Instead of the Annual Report due the day before, AEHI filed a "Notification of inability to timely file Form 10-K 405, 10-K, 10-KSB 405, 10-KSB, 10-KT, or 10-KT405" Why? Because they were "not able to timely compile the subject report without unreasonable effort or expense."
May 17, 2011: Instead of the Quarterly report due the day before, AEHI filed a "Notification of inability to timely file Form 10-Q or 10-QSB." Again, they offer up the half-assed excuse, "Registrant was not able to timely compile the subject report without unreasonable effort or expense."
June 13, 2011: On the heels of these two failures by CEO Don Gillispie to effectively manage his company so as to comply with rudimentary SEC filing requirements, the AEHI board takes decisive action: "On June 10, 2011, the Board of Directors of Alternate Energy Holdings, Inc. approved a fifteen percent (15%) increase in the monthly salary of Donald L. Gillispie, the Company’s President and Chief Executive Officer, from $40,000 per month to $46,000 per month, to be effective as of July 1, 2011."
Taking the Board's clear signal in the form of his 15% raise, AEHI CEO Don Gillispie and his staff continue as usual, blowing off the next two SEC reporting deadlines:
August 16, 2011: Instead of the Quarterly Report due the day before, AEHI filed a "Notification of inability to timely file Form 10-Q or 10-QSB" Why again? You guessed it: "Registrant was not able to timely compile the subject report without unreasonable effort or expense."
November 15, 2011: Instead of the Quarterly Report due that day, AEHI filed a "Notification of inability to timely file Form 10-Q or 10-QSB" Yeah, they did. Again: "Registrant was not able to timely compile the subject report without unreasonable effort or expense."
Four consecutive SEC filing dates deadlines, known well in advance. Four consecutive failures on the part of the CEO to ensure his company filed those reports by the deadline.
What should we expect? - he does only get $552,000.00 a year in cash compensation for all that hard work, after all.
This has been covered before, but now it's starting to look like a bad habit:
April 1, 2011: Instead of the Annual Report due the day before, AEHI filed a "Notification of inability to timely file Form 10-K 405, 10-K, 10-KSB 405, 10-KSB, 10-KT, or 10-KT405" Why? Because they were "not able to timely compile the subject report without unreasonable effort or expense."
May 17, 2011: Instead of the Quarterly report due the day before, AEHI filed a "Notification of inability to timely file Form 10-Q or 10-QSB." Again, they offer up the half-assed excuse, "Registrant was not able to timely compile the subject report without unreasonable effort or expense."
June 13, 2011: On the heels of these two failures by CEO Don Gillispie to effectively manage his company so as to comply with rudimentary SEC filing requirements, the AEHI board takes decisive action: "On June 10, 2011, the Board of Directors of Alternate Energy Holdings, Inc. approved a fifteen percent (15%) increase in the monthly salary of Donald L. Gillispie, the Company’s President and Chief Executive Officer, from $40,000 per month to $46,000 per month, to be effective as of July 1, 2011."
Taking the Board's clear signal in the form of his 15% raise, AEHI CEO Don Gillispie and his staff continue as usual, blowing off the next two SEC reporting deadlines:
August 16, 2011: Instead of the Quarterly Report due the day before, AEHI filed a "Notification of inability to timely file Form 10-Q or 10-QSB" Why again? You guessed it: "Registrant was not able to timely compile the subject report without unreasonable effort or expense."
November 15, 2011: Instead of the Quarterly Report due that day, AEHI filed a "Notification of inability to timely file Form 10-Q or 10-QSB" Yeah, they did. Again: "Registrant was not able to timely compile the subject report without unreasonable effort or expense."
Four consecutive SEC filing dates deadlines, known well in advance. Four consecutive failures on the part of the CEO to ensure his company filed those reports by the deadline.
What should we expect? - he does only get $552,000.00 a year in cash compensation for all that hard work, after all.
Monday, October 10, 2011
Who's The New Guy?
AEHI announced a new hire on October 5th:
Alternate Energy Holdings, Inc. today announced the hiring of J. Peter Honeysett as Director of Nuclear Projects, a newly-created position focused on directing the Payette, Idaho nuclear project and others as they relate to nuclear energy.
A 29-year veteran of the nuclear industry, Honeysett spent his career with Florida Power and Light working in operations at the St. Lucie Nuclear Power Plant in Port St. Lucie, Florida. As a senior licensed operator he has been involved in all aspect of plant operations throughout his career including the responsibility of overseeing operations of both nuclear reactors at St. Lucie.
Where might one have heard about this fellow before? Here is a letter he wrote in support of AEHI to Payette County during the rezone process:
Look at how closely the press release bio matches Mr Honeysett's own letter.
Interesting that AEHI didn't announce a job search prior to hiring for this 'newly-created position.' It's also interesting that someone local was not hired. One wonders what happened to all the resumes collected during AEHI's little resume stunt to generate rezoning support a couple of years ago.
Saturday, July 30, 2011
Motion Sickness, Part II: Discovery Dispute Continues; SEC Files Motion to Compel AEHI to Produce and Preserve Documents
Continuing the saga of the discovery dispute from May, the SEC has now filed a Motion to Compel Alternate Energy Holdings, Inc., and its CEO Don "Idunno" Gillispie to produce the shit the SEC has been asking for since, oh, 'round 'bout Dec 27th or so, give or take . The SEC looks to be none too happy with AEHI's attorneys shenanigans, so the SEC fired this motion off, escalating things a bit:
Motion to Compel
Memorandum in support of Motion to Compel
Declaration of SEC Attorney David Berman
Exhibits A-F
Exhibit G: Deposition of Don Gillispie, June 28, 2011.
Exhibits H-P
Interesting look at our CEO with 45 years experience who is somehow worth more than $40,000.00 per month:
Video of SEC attorneys asking Don a simple question.
Q. Is AEHI China incorporated in the United States?
A. N0.
Q. Is it incorporated in China?
A. They have a Chinese business license. I do not know if they are incorporated in China.
Q. Is AEHI China incorporated in any jurisdiction?
MR. ROTH: In the US, you mean?
Q. BY MR. BERMAN: In any jurisdiction anywhere?
A. I really don't know. I just wanted to have a business license in China because that's
what we needed to be able to do this.
Q. When I say "incorporated," that implies that AEHI China may be a corporation. Let me ask a different question. Does AEHI China have a business form other than a corporation?
A. I don't know.
Q. For example, is AEHI China an LLC?
. I don't think so, but I'm not sure.
Or something called a Limited Company? . It may be that. That rings a bell.
Who would know whether AEHI China -
who would know about the corporate structure of AEHI China?
A. I assume Nancy Shi, since she's the one that set it up.
Q. Is AEHI China registered with the Chinese government in any way other than having a business license?
A. All these documents are in Chinese. I've seen the business license, and you can see "AEHI China" and everything else is in Chinese. I don't know exactly, but I know she had to get all of these pieces of paper to make this an existing entity that could operate in China. So whatever was required of it to get a license from the government, I know it took a business license because I've seen that. I think it may be issued from the government, and it is universal. It is not a city license, per se. We may do one in the state, but they do one for the whole country. I think the answer is yes to that question.
Q. I think you testified you don't have perfect understanding of this. S0 if you don't know, that's fine. I'm just going to ask some clarifying questions.
Does AEHI China have a charter from theChinese government?
A. I don't know.
Q. Does AEHI China report to the Chinese government in the way that AEHI reports to the Securities and Exchange Commission in the United States?
A. I don't know that either.
Q. D0 you know if AEHI China pays taxes in China?
A. I assume so.
MR. ROTH: If you don't know -
THE WITNESS: I don't know.
MR. ROTH: He doesn't want any assumptions. He wants to know what you know.
THE WITNESS: I do not. I don't know.
Q. BY MR. BERMAN: Does AEHI China pay taxes in the United States?
A. I don't know that either.
Q. Does AEHI China report to any ' United States based regulators?
A. I've never heard that mentioned.
Q. Does AEHI China work with any entity other than AEHI?
A. No.
Q. And let me clarify that. I'm thinking maybe I saw some hesitation, and I think know
Other than as a counter party, does AEHI China work on behalf of any other entity besides AEHI?
A. I do not believe so.
Q. Does AEHI China have a physical office anywhere?
A. Yes.
Q. And where is that located?
A. It's in Beijing.
Q. Can you tell me the address in Beijing?
A. Not off the top of my head. It is in the Central Business District.
Q. Does it have any other offices anywhere?
A. N0.
Q. Does it maintain files anywhere outside of its Beijing office? 1
A. I don't think so.
Motion to Compel
Memorandum in support of Motion to Compel
Declaration of SEC Attorney David Berman
Exhibits A-F
Exhibit G: Deposition of Don Gillispie, June 28, 2011.
Exhibits H-P
Interesting look at our CEO with 45 years experience who is somehow worth more than $40,000.00 per month:
Video of SEC attorneys asking Don a simple question.
Q. Is AEHI China incorporated in the United States?
A. N0.
Q. Is it incorporated in China?
A. They have a Chinese business license. I do not know if they are incorporated in China.
Q. Is AEHI China incorporated in any jurisdiction?
MR. ROTH: In the US, you mean?
Q. BY MR. BERMAN: In any jurisdiction anywhere?
A. I really don't know. I just wanted to have a business license in China because that's
what we needed to be able to do this.
Q. When I say "incorporated," that implies that AEHI China may be a corporation. Let me ask a different question. Does AEHI China have a business form other than a corporation?
A. I don't know.
Q. For example, is AEHI China an LLC?
. I don't think so, but I'm not sure.
Or something called a Limited Company? . It may be that. That rings a bell.
Who would know whether AEHI China -
who would know about the corporate structure of AEHI China?
A. I assume Nancy Shi, since she's the one that set it up.
Q. Is AEHI China registered with the Chinese government in any way other than having a business license?
A. All these documents are in Chinese. I've seen the business license, and you can see "AEHI China" and everything else is in Chinese. I don't know exactly, but I know she had to get all of these pieces of paper to make this an existing entity that could operate in China. So whatever was required of it to get a license from the government, I know it took a business license because I've seen that. I think it may be issued from the government, and it is universal. It is not a city license, per se. We may do one in the state, but they do one for the whole country. I think the answer is yes to that question.
Q. I think you testified you don't have perfect understanding of this. S0 if you don't know, that's fine. I'm just going to ask some clarifying questions.
Does AEHI China have a charter from theChinese government?
A. I don't know.
Q. Does AEHI China report to the Chinese government in the way that AEHI reports to the Securities and Exchange Commission in the United States?
A. I don't know that either.
Q. D0 you know if AEHI China pays taxes in China?
A. I assume so.
MR. ROTH: If you don't know -
THE WITNESS: I don't know.
MR. ROTH: He doesn't want any assumptions. He wants to know what you know.
THE WITNESS: I do not. I don't know.
Q. BY MR. BERMAN: Does AEHI China pay taxes in the United States?
A. I don't know that either.
Q. Does AEHI China report to any ' United States based regulators?
A. I've never heard that mentioned.
Q. Does AEHI China work with any entity other than AEHI?
A. No.
Q. And let me clarify that. I'm thinking maybe I saw some hesitation, and I think know
Other than as a counter party, does AEHI China work on behalf of any other entity besides AEHI?
A. I do not believe so.
Q. Does AEHI China have a physical office anywhere?
A. Yes.
Q. And where is that located?
A. It's in Beijing.
Q. Can you tell me the address in Beijing?
A. Not off the top of my head. It is in the Central Business District.
Q. Does it have any other offices anywhere?
A. N0.
Q. Does it maintain files anywhere outside of its Beijing office? 1
A. I don't think so.
Monday, July 18, 2011
Idaho Samizdat Nuke Notes Blog Article on SEC vs. AEHI
Here's the latest take on the SEC vs. AEHI case from respected nuclear issues blogger Dan Yurman, at his Idaho Samizdat Nuke Notes Blog:
Impact on other nuclear programs in IdahoSo much for AEHI's claims of credibility in the nuclear industry.
AEHI’s now tarnished reputation has been a pain in the neck for the Idaho National Laboratory, which conducts nuclear energy R&D work for the federal government.
An anonymous source familiar with the issues at the Idaho lab told this blog this week via email that having a firm like AEHI in Idaho has often challenged INL's public image.
"We all too often have to defend our own programs and the nuclear industry because of their corrupt tactics, rhetoric, and confusing promises. The sooner AEHI goes away the better."
Wednesday, July 13, 2011
SEC Files Motion to Amend Original Complaint: "AEHI's Securities Lawyers and Investor Relations Firm Resigned Over Their Concerns"
The SEC on July 7th filed a Motion for Leave to Amend Complaint, outlining the SEC's addition of new claims and "further factual allegations describing the time, place, and manner of the defendants' fraud," in their case against Alternate Energy Holdings, Inc., CEO Don Gillispie, and Fomer Key Senior Executive Vice President (and now former President of Energy Neutral) Jennifer Ransom. And her dog Bosco's LLC, too.
Appendix A to the Motion is the Amended Complaint, and Appendix B (immediately following A in the same .pdf in the link) is the original Complaint with the proposed changes shown as strikethrough or underline for deleted or added material.
Lots of new shit has come to light in the amended complaint. A couple of highlights:
One of the more interesting additions is paragraph 82, on page 20 of the Amended Complaint: (emphasis added)
If the court grants the Motion for Leave to Amend Complaint, then AEHI will have 14 days to respond to the new allegations in the amended complaint.
As more new shit comes to light, the Dude will post it here.
Appendix A to the Motion is the Amended Complaint, and Appendix B (immediately following A in the same .pdf in the link) is the original Complaint with the proposed changes shown as strikethrough or underline for deleted or added material.
Lots of new shit has come to light in the amended complaint. A couple of highlights:
One of the more interesting additions is paragraph 82, on page 20 of the Amended Complaint: (emphasis added)
AEHI Continues to Issue New Press Relaeases
82. On or around September 22, 2010, after raising the issue with Gillispie and company management, AEHI's securities lawyers and investor relations firm resigned over their concerns about the volume and and nature of AEHI's press releases.On page 12, the SEC adds a new laundry list of Private Placement Memoranda that, according to the SEC, "falsely state" "that they have funding."
83. Following these resignations, AEHI continued to issue a new press release almost every business day, including on October 4, 11, 14, 15, 18, 19, 25, 27, 28; November 1, 2, 8, 9, 11, 15, 17, 22, 29; and December 1, 2, 3, 6, 10, and 13, 2010.
As more new shit comes to light, the Dude will post it here.
Tuesday, May 31, 2011
AEHI Facebook Response: CEO Don Gillispie Too Busy To Respond to Former Board Member; "Speak to Someone Else"
A warning of sorts to Alternate Energy Holdings, Inc.'s newst board member: If you leave, you might not get the answers you were looking for. Oh Well.
Via AEHI's stock pumping Facebook page, former board member Gregory Kane finally gets a reply (a full 12 days later) to his question regarding his 2.5 million share stake in the company:
Since he is a former board member, maybe Mr. Kane's shares are restricted- which could very well mean his shares are 'blacked out'- until the company removes the restriction. One of the emails in the SEC case has Don directing someone to move shares from unrestricted back to restricted. Maybe this former board member is simply seeking to have Don, or his Key Senior Executive Vice President for Administration and Asian American Relations remove the restriction on Kane's shares. But, it appears, the folks at AEHI's World Headquarters are simply too busy to be bothered with such requests.
Here's the screenshot (with unrelated comments snipped out):
Via AEHI's stock pumping Facebook page, former board member Gregory Kane finally gets a reply (a full 12 days later) to his question regarding his 2.5 million share stake in the company:
"Greg, there is no black out on AEHI stock. It is trading, but with a much smaller volume, based largely on price and the fact that there is no market maker on the stock. I cannot comment on how that is coming along, except to say that the proper paperwork has been filed, but what happens next is up to the FINRA approval process. As for Mr. Gillispie, he is very busy with pressing matters that relate to approving and building a nuclear power plant, so your broker will need to speak to someone else in the office."Like maybe the Key Senior Executive Vice President for Lavish Expenditures?
Since he is a former board member, maybe Mr. Kane's shares are restricted- which could very well mean his shares are 'blacked out'- until the company removes the restriction. One of the emails in the SEC case has Don directing someone to move shares from unrestricted back to restricted. Maybe this former board member is simply seeking to have Don, or his Key Senior Executive Vice President for Administration and Asian American Relations remove the restriction on Kane's shares. But, it appears, the folks at AEHI's World Headquarters are simply too busy to be bothered with such requests.
Here's the screenshot (with unrelated comments snipped out):
Updated: AEHI Announces New Board Member; No Stranger to Luxury, Generosity
Got this in email at DudeNews Headquarters this morning:
|
| Looks like she's legit. In which case, there'll might some changes in practice there at AEHI World Headquarters in Eagle. Or, the'll have another director bail out in a few months. We'll see. Update: An Alert Reader found an article in the Jackson Advocate which may shed some light on the selection of the new board member: (emphasis added) It can certainly be said that Glover really enjoys the finer things in life, such as, expensive clothes, eating at high priced restaurants, taking cruises and jetting around the world seated in first class. However, Glover's humble upbringing of never forgetting where she comes from is oftentimes demonstrated by her anonymous gifts to the least of these.Hmm. Sounds familiar. Perhaps they met at some five-star resort, and maybe Don casually mentioned the troubles he and his Key Senior Executive Vice President face with lawsuits from the SEC and investors. At which point, maybe the prospective board member would have offered, with a smirk and consdescending tone, "Let me show you how it's done in the real world." As the Alert Reader pointed out, let's hope Don told her about the $2500 reporting rule if she seeks to indulge her penchant for luxury and generosity on the AEHI dime, at least. |
Friday, May 20, 2011
Departed Director: Former AEHI Board Member Can't Seem to Get Answers- Now Just Another "Whining Shareholder?"
Alert Readers may recall Alternate Energy Holdings, Inc's February Board of Directors shakeup exodus, in which two Directors (28% of the board) resigned effective immediately, according to their timely filed(!) 8-K:
However, Alert Readers will want to take a look at AEHI's Stock Pumping Facebook Page, where the Dude observed an interesting comment by former Director Greg Kane: (took a screenshot in case the comment gets deleted)
Whoa. A former director's stock broker can't get a call in to Five-Finger Double-Dipping Don? Not even the (Now Conveniently Former) Key Senior Executive Vice President For Lavish Expenditures will return his calls?
But Wait, Dude! Are you sure it's the same guy?
Yep. He even posted the same comment on his own Facebook Page:
Sure enough, the "Eagle-I Nuclear Assistance" company matches Kane's bio from an earlier company 10-K:
Greg Kane, Vice President and Director
How much stock did Kane get stuck with?
According to this Form 4, about two and a half million shares:
No wonder Kane's a little miffed at his broker being blown off- that's somwhere near a quarter million dollars given the recent .08-.13 share price range.
And, it's no wonder Don Gillispie and his Convenietly Former Key Senior Executive Vice President are blowing off the guy's broker- they sure don't want to have to tell the other shareholders that a former board member is trying to unload his stake, or part of it.
One gets the sense that perhaps not all is well at AEHI Interplanetary Headquarters...
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 7, 2011, Alternate Energy Holdings, Inc. (the "Company") accepted the resignations, effectively immediately, of Mr. Leon Eliason and Mr. Gregory Kane from the Board of Directors of the Company. Mr. Eliason and Mr. Kane have each served on the Board of Directors of the Company since the Company’s inception in 2006. Both Mr. Eliason and Mr. Kane resigned due to personal reasons and not over any disagreement with the Company’s Board of Directors or its management. The Company intends to search for potential candidates to appoint as new directors of the Company to fill the vacancies created by Mr. Eliason’s and Mr. Kane’s resignations.
However, Alert Readers will want to take a look at AEHI's Stock Pumping Facebook Page, where the Dude observed an interesting comment by former Director Greg Kane: (took a screenshot in case the comment gets deleted)
But Wait, Dude! Are you sure it's the same guy?
Yep. He even posted the same comment on his own Facebook Page:
Sure enough, the "Eagle-I Nuclear Assistance" company matches Kane's bio from an earlier company 10-K:
Greg Kane, Vice President and Director
A past nuclear plant manager, Mr. Kane has served as Vice President and Board member of the Company since September 2006. Mr. Kane is the President of Eagle “I” Nuclear Assistance, a consulting firm that has provided management consulting to over 25 nuclear programs. Mr. Kane has held that position since 1998. Mr. Kane was previously the General Manager at Virginia Power’s twin unit PWR North Anna Nuclear Plant, where he was responsible for safe operation and budgeting of the station in the all aspects of operations. Mr. Kane has completed the Navy Nuclear Program.It looks like this former Director might be trying to unload the shares he got stuck with during his tenure, and has run into some sort of snag, and now Don Gillispie won't return the broker's phone calls.
How much stock did Kane get stuck with?
According to this Form 4, about two and a half million shares:
No wonder Kane's a little miffed at his broker being blown off- that's somwhere near a quarter million dollars given the recent .08-.13 share price range.
And, it's no wonder Don Gillispie and his Convenietly Former Key Senior Executive Vice President are blowing off the guy's broker- they sure don't want to have to tell the other shareholders that a former board member is trying to unload his stake, or part of it.
One gets the sense that perhaps not all is well at AEHI Interplanetary Headquarters...
Wednesday, May 18, 2011
New Filings in AEHI SEC Lawsuit: Motion Sickness and Discovery Disputes
On April 8, Alternate Energy Holdings, Inc. filed a Motion For Summary Judgment in the SEC's ongoing case against the company. In it, and its attached Memorandum in Support and Statement of Undisputed Facts, the company essentially repeats claims made in their answer to the SEC's complaint, and leans a bit more on the assertion that (Now Conveniently Former)Key Senior Executive Vice President Jennifer Ransom was Actually Just Someone Hanging Around The Office And Answering Phones, and that she relied upon the advice of counsel in her failing to file any, like, paperwork or anything, as she unloaded a million shares of AEHI stock while filing her nails and arranging cruises, limousine service and trips to China. But the Dude digresses.
'Round about April 26th, the Judge issued an order adopting the parties' stipulation to response dates, discovery timelines, and on the 27th issued an order setting July 18, 2011, 9:00 AM as the hearing date.
Apparently, things went awry in the discovery process, and the parties whined to the judge via correspondence. No dice, said the Judge. Move me.
Thus was born yesterday's Motion to Vacate, which was accompanied by an interesting Memorandum in Support and three exhibits: Exhibits A, B and C. The most interesting is Exhibit A, a memorandum from SEC attotrney David Berman to AEHI's lawyers, indicating AEHI's reluctance or refusal to produce relevant emails and documents in time for the SEC to be able to use them in a deposition tomorrow! (May 19th) Check out some of the names and topics referred to in the memo: (emphasis and embedded links added)
This is definitely getting more interesting.
More updates as they are filed on PACER.
'Round about April 26th, the Judge issued an order adopting the parties' stipulation to response dates, discovery timelines, and on the 27th issued an order setting July 18, 2011, 9:00 AM as the hearing date.
Apparently, things went awry in the discovery process, and the parties whined to the judge via correspondence. No dice, said the Judge. Move me.
Thus was born yesterday's Motion to Vacate, which was accompanied by an interesting Memorandum in Support and three exhibits: Exhibits A, B and C. The most interesting is Exhibit A, a memorandum from SEC attotrney David Berman to AEHI's lawyers, indicating AEHI's reluctance or refusal to produce relevant emails and documents in time for the SEC to be able to use them in a deposition tomorrow! (May 19th) Check out some of the names and topics referred to in the memo: (emphasis and embedded links added)
Re: Securities and Exchange Commission v. Alternate Energy Holdings, Inc. etal., Case No.AEHI's "Management Structure?" Ha! Four hundred pages of emails about a 10-Q? No wonder they were late. AEHI's Insider trading policy? What's a policy?
Rich and Dick,
I write regarding the privilege log that you sent us last night for the documents produced by Pillsbury Winthrop Shaw Pittman. It is evident that defendants have directed Pillsbury to withhold a number of documnents that are clearly not privileged - either because of the basic nature of the documents, or because of the privilege waiver in this case, or both. Moreover, notwithstanding my previous request, defendants have not provided any explanation in the log as to why they believe the documents are privileged after the Waiver. Accordingly, we must ask that defendants reconsider their position and produce all responsive, non-privileged documents immediately, and in no event later than this Monday, May 16. This time frame is necessary to mitigate prejudice to the Commission, given that we are deposing Louis Bevilacqua - the Pillsbury partner at the center of defendants’ privilege waiver - on May 19 in Washington, D.C. in preparation for our response to defendants Summary Judgment Motion.
Because Mr. Bevilacqua’s deposition is scheduled for this coming Thursday, We do not have the time to identify each and every deficiency in the 163 page privilege log. Therefore, We have summarized below a few core categories of documents that have been improperly withheld.
A. Communications that are not privileged because they copy third parties.
A communication between a lawyer and his client is not privileged if a third party is present or copied. See generally In re Grand Jury Investigation, 974 F.2d 1068, 1071 n.2 (9th Cir. 1992) (test for privilege includes requirement that communication be “made in confidence.”). This is clearly the case for a large percentage of communications reflected in the log. For example:
PWSP00008-11 - Email copies David Waldman of Crescendo Communications
PWSP 000119-124 - Email copies Richard Kreger of Source Capital Group, Inc
PWSP 000533 - Email between Gillispie and Richard Hammond of UBS. Not only is no attorney party to the email, the email relates to “sale of Jenníe’s shares.”
PWSP 000540-541 - Email copies Martin Johncox and Cooper.
PWSP 000569 - Email copies Louis Shi, Jack Wynn, Tom Doss, Eric Cooper and Eddie Smith.
PWSP 001073 Email copies Jack Wynn.
PWSPOOOISO7-1509 - Email is between Gillispie and Richard Hammond of UBS (no attorney is party to the communication).
PWSP 0003003-4134 - More than 1,000 pages of letters are between Brian Buck of Pillsbury and Interwest Transfer Company (no client is party to the communication).
B. Documents that do not contain legal advice or Work product.
Documents are only privileged if they contain: (a) attorney-client communiications providing or reflecting legal advice, and/or (b) attomey work product created in anticipation of litigation. See . generally re Grand Jury Investigation, 974 F.2d at n.2; Admiral Ins. Co. v. US. Dist Ct., 881 F.2d 1486, 1494 (9th Cir. 1989) (citing Fed. R. Civ. P. 26(b)(3)). Cf United States v. Martin, 278 F.3d 988, 999 (9th Cir. 2002) (“The fact that a person is a lawyer does not make all communications with that person privileged.”) (internal citation omitted). Defendants have nowhere disclosed on which theory they are relying for the documents on the log. In fact, many of the documents on the log appear to fall into neither category. For example:
PWSP 0002953-2991 - Pillsbury invoices to AEHI
PWSP 00029923002 - Retention agreement between AEHI and Pillsbury
PWSP 0004250-4251 - Email summary is “Discussion regarding new counsel”
PWSP 007652-7656 Email summary is “Discussion re Pillsbury termination”
PWSP 007665 - Email summary is “Discussion about Revised Pillsbury legal bill”
C. Documents that are not priveleged because they are subject to defendants’ voluntary privilege Waiver.
Defendants have affirmatively claimed that Ms. Ransom is not liable under Section 16 of the Exchange Act because she relied on the advice of her counsel at Pillsbury when, in 2010, she chose not to publicly disclose her sale of a million AEHI shares. Defendants have rested this claim on the assertion that Mr. Bevilacqua was “the most knowledgeable and experienced person who had personal knowledge of Ms. Ransom’s title and obligations.”
A defendant “cannot be allowed, after disclosing as much as he pleases, to withhold the remainder.” Weil v. Inv. Indicators, Research & Mgmt., Inc., 647 F.2d l8, 24 (9th Cir. 1981) (quoting VIII J. Wigrnore, Evidence 2291, at 636). Said another way, defendants here cannot use the privilege as both a “sword” and a “shield.” And yet, this is what they appear to have done. The Pillsbury privilege log reflects that defendants have withheld documents related to the very same subject matter on which they have affirmatively waived privilege, and other documents that are necessary for the Commission to respond to their claim of reasonable reliance on counsel. For example:
PWSP 002120-2143, 00374-443 100 pages of email discussions between AEHI and Pillsbury regarding the filing of Forms 3 and 4 under Section 16 of the Exchange Act- the very statute under which Ms. Ransom is charged.
PWSP 002144-2149 - Emails relating to insider stock purchases and AEHI’s insider trading policy. These matters implicate the same disclosure issues and legal analyses that are at the center of defendants’ privilege Waiver.
PWSP 000573, 581-582 - Emails relating to “due diligence,” presumably regarding AEHI. These are plainly relevant to the question of what Mr. Bevilacqua knew (and was told) about AEHI and its management structure.
PWSP 000632-1019 - Almost 400 pages of emails relating to the drafting of AEHI’s 10-Q. These are plainly relevant to the question of what Mr. Bevilacqua knew (and was told) about AEHI and its management structure.
PWSP 006700-6735 - Same.
PWSP 004495-4497, 5691, 5693-5760, 5774-5775 - Emails relating to AEHI Private Placement Memoranda. These are plainly relevant to the question of what Mr. Bevilacqua knew (and was told) about AEHI and its management structure. For example, several AEHI PPMS describe Ms. Ransom as a “key member of management.”
This is definitely getting more interesting.
More updates as they are filed on PACER.
Tuesday, May 17, 2011
AEHI Quarterly Report: First Revenue of $169K; $660K Admin Expenses; Net Loss of $653K; $20.2M Net Loss Since Inception
Alternate Energy Holdings, Inc., led by priority-impaired CEO Don Gillispie, filed its SEC 10-Q for the first quarter of 2011 today, after previously announcing they would not be able to file by the deadline of the 16th due to not being able to file by the deadline of the 16th.
At least they had a good reason.
Highlights:
Turning Lemonade into Lemons
First ever revenue: $169,000, Cost of Sales 161,588; gross profits (drumroll please)........ $7,412!
Wow.
Till you see the Operating Expenses of $660,656.
Let's see: They were able to sell $161,588 worth of bullshit for $169,000 and it only cost them $660,656 to keep the doors open and lights on to facilitate generating profits that will somehow rival Exxon Mobil?.
And since inception, AEHI's management has managed, in not quite six years, to generate a net loss of 20.2 Million Dollars to finally show a whopping $7,412 profit!
$7412/$161,588= 4.5%. Shitty profit margin.
Here's the consolidated income statement from the late(est)-filed AEHI 10-Q:
Ouch.
Interesting apparent contradiction:
On page 13, "Notes To Consolidated Financial Statements", the Company says:
Spent nearly a quarter million dollars in legal fees in three months:
Lawyer Up!
At least they had a good reason.
Highlights:
Turning Lemonade into Lemons
First ever revenue: $169,000, Cost of Sales 161,588; gross profits (drumroll please)........ $7,412!
Wow.
Till you see the Operating Expenses of $660,656.
Let's see: They were able to sell $161,588 worth of bullshit for $169,000 and it only cost them $660,656 to keep the doors open and lights on to facilitate generating profits that will somehow rival Exxon Mobil?.
And since inception, AEHI's management has managed, in not quite six years, to generate a net loss of 20.2 Million Dollars to finally show a whopping $7,412 profit!
$7412/$161,588= 4.5%. Shitty profit margin.
Here's the consolidated income statement from the late(est)-filed AEHI 10-Q:
Ouch.
Interesting apparent contradiction:
On page 13, "Notes To Consolidated Financial Statements", the Company says:
"During 2011, Alternate Energy Holdings, Inc. -Did not issue any common stock for services or cash."However, on page 20, the Company says:
Financing ActivitiesWhich is it? Did they or did they not issue common stock during the three months ending March 31, 2011?
Net cash used in financing activities increased by $3,906,446 for the three months ended March 31, 2011 as compared to the same period in 2010. The increase in funds used by our financing activities was primarily due to issuance of shares of stock for cash during the three months ended March 31, 2011.
Spent nearly a quarter million dollars in legal fees in three months:
Lawyer Up!
AEHI's Quarterly Report Late; Updates: Issues Puff Piece, Lost Homework Excuses In Lieu of Timely Report
According to the SEC's instructions for Form 10-Q, AEHI's latest quarterly report, for the period ending March 31, 2011, should have been filed on May 16th:
Here we go again.
Wasn't an agreement by AEHI and CEO Don Gillispie to comply with the securities laws part of the bargain by which they regained access to the cookie jar?
Update 7:30 AM: While they're busy not preparing required reports to give investors the information they need to make intelligent decisions, the staff at AEHI's Interplanetary Headquarters apparently does have the time to create yet another of their bullshit-laden puff pieces in an attempt to help the sagging stock price:
And Again.
UPDATE 10:36 AM: AEHI Just filed another "NT"late filing lame excuse form 10-Q:
They have time to try to pump sunshine up our asses, but they don't have time to fulfill their obligations to shareholders in a timely manner. Just the thing everyone looks for in a competent CEO, don't you think?
Notification of inability to timely file Form 10-Q
1. The SEC requires the Registrant (AEHI) to state in reasonable detail the reason why the report could not be done on time.
2. The Registrant's "reasonable detail" of the reason is this:
Is this kind of shitty work product what one would expect of a CEO with "45 years of experience?"
.
A quarterly report on this form pursuant to Rule 13a-13 or Rule 15d-13 shall be filed within the following period after the end of each of the first three fiscal quarters of each fiscal year, but no report need be filed for the fourth quarter of any fiscal year:
a. 40 days after the end of the fiscal quarter for large accelerated filers and accelerated filers (as defined in 17 CFR § 240.12b-2) ;and
b. 45 days after the end of the fiscal quarter for all other registrants.
Here we go again.
Wasn't an agreement by AEHI and CEO Don Gillispie to comply with the securities laws part of the bargain by which they regained access to the cookie jar?
Update 7:30 AM: While they're busy not preparing required reports to give investors the information they need to make intelligent decisions, the staff at AEHI's Interplanetary Headquarters apparently does have the time to create yet another of their bullshit-laden puff pieces in an attempt to help the sagging stock price:
AEHI Subsidiary, Green World Water(TM), Invited to Algeria with U.S.-Algeria Business CouncilHere we go again.
Alternate Energy Holdings, Inc. (OTCQB:AEHI; www.aehipower.com) announced today that AEHI subsidiary Green World Water(TM) has been invited as one of just 30 companies to travel to Algeria to discuss potential partnerships with high-ranking government officials and international industrialists in Algiers and Oran. The trip is part of the U.S. Algeria Business Council, of which Green World Water has been a member since 2010.
And Again.
UPDATE 10:36 AM: AEHI Just filed another "NT"
They have time to try to pump sunshine up our asses, but they don't have time to fulfill their obligations to shareholders in a timely manner. Just the thing everyone looks for in a competent CEO, don't you think?
Notification of inability to timely file Form 10-Q
PART III - NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR or the transition report or portion thereof could not be filed within the prescribed time period.
The Registrant is unable to file the subject report in a timely manner because the Registrant was not able to timely compile the subject report without unreasonable effort or expense. The Registrant fully expects to be able to file within the additional time allowed by this report.Let's break that down:
1. The SEC requires the Registrant (AEHI) to state in reasonable detail the reason why the report could not be done on time.
2. The Registrant's "reasonable detail" of the reason is this:
We couldn't file the report on time because we couldn't compile the report on time.Is that reasonable detail?
Is this kind of shitty work product what one would expect of a CEO with "45 years of experience?"
.
Thursday, May 5, 2011
Dude Book Review: Three Cups of Deceit
Jon Krakauer's new article/e-Book Three Cups of Deceit: How Greg Mortenson, Humanitarian Hero, Lost His Way, has some very interesting tales of Mortenson's misuse of funds, misuse of trust, and an aversion to being held accountable for his actions while claiming to build schools in Afghanistan as described in his book Three Cups of Tea. Page 68 has an analysis which will sound all too familiar to followers of the AEHI saga: (emphasis added)
"During the past several months, as I came to grasp the magnitude of Mortenson’s deceit, I felt ashamed at being so easily conned. How could those of us who enabled his fraud—and we are legion—have been so gullible? Ted Callahan attributes the uncritical acceptance of Mortenson and his shtick to the seemingly endless war raging in Central Asia. “The way I’ve always understood Greg,” Callahan reflects, “is that he’s a symptom of Afghanistan. Things are so bad that everybody’s desperate for even one good-news story. And Greg is it. Everything else might be completely fucked up over there, but here’s a guy who’s persuaded the world that he’s making a difference and doing things right.” Mortenson’s tale “functioned as a palliative,” Callahan suggests. It soothed the national conscience. Greg may have used smoke and mirrors to generate the hope he offered, but the illusion made people feel good about themselves, so nobody was in a hurry to look behind the curtain. Although it doesn’t excuse his dishonesty, Mortenson was merely selling what the public was eager to buy."
The book is a great read- it is filled with many, many more specific examples which have an uncanny similarity to AEHI's antics over the past couple of years.
The Dude recommends.
Saturday, April 9, 2011
Annual Report Highlights, Part II: Employee Reductions, Don's House Now An Executive Office and Slumber Party House, Land Price Up 67%!
After getting busted by the SEC, Alternate Energy Holdings, Inc. has made a few changes in how they report certain items in their Annual report. Highlights below:
Downsizing:
2009 Annual Report:
Employees
The Company and its subsidiaries have 15 full-time employees. In addition, nine officers and directors provide certain services dedicated to current corporate and business development activities. In the future, the officers will devote services on a full-time basis and six independent directors will serve part-time up to ten hours per week.
2010 Annual Report:
Employees
As of March 31, 2011 the Company and its subsidiaries have 7 full-time employees. In addition, because we are an early stage company, we also retain at any given time the services of five to ten third party contractors or consultants, including our CEO, who provide management, engineering, surveying, construction and other services in support of the project and our other business units.
Fix the double-dipping by reclassifying the house:
2009 Annual Report:
Item 2. Properties
The Company’s operations are principally located at 911 E. Winding Creek Dr., Suite 150, Eagle, Idaho 83616. The Company currently pays $1,300 as monthly rent for the use of this office. Once the construction of the Idaho Energy Complex is completed, the plant will become the Company’s primary facility.
2010 Annual Report:
Item 2. Properties
The Company’s operations are principally located at 911 E. Winding Creek Dr., Suite 150, Eagle, Idaho 83616. The Company currently pays $2,000 as monthly rent for the use of this office which is renewable annually. Once the construction of the Idaho energy complex is completed, the plant will become the Company’s primary facility. The Company also rents a 4,000 square foot home in Eagle, Idaho, at a current rental of $3,000 per month. This location is used as additional office space by Company executives and for lodging and meetings when third parties are visiting the Company from out of town. Any personal use of the home by any Company executive is treated as additional compensation to such executive.
That would appear to be the house featured in the exhibits to the SEC complaint- the house the company was paying for while Don received a housing allowance at the same time.
Conveniently, the company now tries to claim it is an additional corporate office.
See the "Zone Code: R1 in the image above? That creates a problem with the company using that house as a business or professional office: it's a prohibited use in a residential zone, according to the City of Eagle Zoning table. From "how to read the table:"
To determine in which district a specific use is allowed:
Going down the list, we see commercial offices (business and professional), hotels, motels, "professional activities", circuses, laundries, clubs or lodges- none of those are permitted uses in a residential zone, or on property zoned R-1 as the property at 2554 N. Saddle Mountain is. So, if the house is being used primarily as an office for a commercial enterprise, it is a zoning violation. Otherwise, it's just Don's house.
Site Land price increases by Ten Million Dollars:
2009 Annual Report:
The Site
After a three-year search, the Company has, through Idaho Energy, located a primary site (the “Site”) in Payette, Idaho that will cost approximately $15.0 million, including the acquisition of water rights. This location is well suited for the licensing, construction and development of a nuclear power reactor.
2010 Annual Report:
The Site
After a three-year search, the Company has, through Idaho Energy, located a primary site (the “Site”) in Payette, Idaho that will cost approximately $25.0 million, including the acquisition of water rights. The Company believes this location is well suited for the licensing, construction and development of a nuclear power reactor.
2009 Annual Report
Land Purchase Agreement
There is an agreement between the Company and the current site owner for the purchase of the land (the “Land Purchase Agreement”) and a draft agreement for the water rights and additional land, which is expected to be executed as a final water rights agreement by the end of March 2010. Once completed, the agreement will transfer title to Idaho Energy upon constructive receipt of an approximately $5.0 million cash payment for the land plus $10.0 million for additional land with water rights.
2010 Annual Report
Land Purchase Agreement
There is an agreement between the Company and the current site owner for the purchase of the land (the “Land Purchase Agreement”) and an agreement for the water rights and additional land for backup site. Once completed, the agreement will transfer title to Idaho Energy upon constructive receipt of an approximately $5.0 million cash payment for the land plus $20.0 million for additional land with water rights. A 4% deposit was previously paid to hold the land for up to twelve months, which was subsequently extended for an additional twelve months to through the end of 2011.
Cost of Overseas Operations quadruples:
2009 Annual Report:
The Company estimates the cost of operation for its four corporate subsidiaries will be approximately $750,000 per year.
2010 Annual Report:
The Company estimates the cost of operation for its four corporate subsidiaries will be approximately $3,000,000 per year excluding phase 1 of the Project.
Whoops, there goes a hundred grand up in smoke:
2009 Annual Report:
At December 31, 2009, the Company had a $100,000 deposit held in the escrow with Perkins Coie to fund a potential joint venture project to develop and manufacture a hybrid engine in China.
2010 Annual Report:
Deposit represented monies held in escrow for a potential joint venture project that will develop and manufacture a hybrid engine in China. The funds were released from escrow and replaced with a note receivable that was deemed to be uncollectible and of no value at December 31, 2010.
Who? Never Heard of Her: Scrub, scrub, scrub!
2009 Annual Report:
Jennifer Ransom, Senior Vice President of Administration and Corporate Secretary
(The Key Senior Executive Vice President's name appears thirteen times in this report)
2010 Annual Report:
Jennifer WHO? The Former Key Senior Executive Vice President's name now appears only once, listing her in a table as "Jennifer Ransom, owner of 5% or more" with the incredible seventeen million shares she received for what the company now claims is really expensive office help.
More in another post.....
.
Downsizing:
2009 Annual Report:
Employees
The Company and its subsidiaries have 15 full-time employees. In addition, nine officers and directors provide certain services dedicated to current corporate and business development activities. In the future, the officers will devote services on a full-time basis and six independent directors will serve part-time up to ten hours per week.
2010 Annual Report:
Employees
As of March 31, 2011 the Company and its subsidiaries have 7 full-time employees. In addition, because we are an early stage company, we also retain at any given time the services of five to ten third party contractors or consultants, including our CEO, who provide management, engineering, surveying, construction and other services in support of the project and our other business units.
Fix the double-dipping by reclassifying the house:
2009 Annual Report:
Item 2. Properties
The Company’s operations are principally located at 911 E. Winding Creek Dr., Suite 150, Eagle, Idaho 83616. The Company currently pays $1,300 as monthly rent for the use of this office. Once the construction of the Idaho Energy Complex is completed, the plant will become the Company’s primary facility.
2010 Annual Report:
Item 2. Properties
The Company’s operations are principally located at 911 E. Winding Creek Dr., Suite 150, Eagle, Idaho 83616. The Company currently pays $2,000 as monthly rent for the use of this office which is renewable annually. Once the construction of the Idaho energy complex is completed, the plant will become the Company’s primary facility. The Company also rents a 4,000 square foot home in Eagle, Idaho, at a current rental of $3,000 per month. This location is used as additional office space by Company executives and for lodging and meetings when third parties are visiting the Company from out of town. Any personal use of the home by any Company executive is treated as additional compensation to such executive.
That would appear to be the house featured in the exhibits to the SEC complaint- the house the company was paying for while Don received a housing allowance at the same time.
Conveniently, the company now tries to claim it is an additional corporate office.
 |
| Ada County Assessor's file on 2554 N Saddle Mountain Way |
See the "Zone Code: R1 in the image above? That creates a problem with the company using that house as a business or professional office: it's a prohibited use in a residential zone, according to the City of Eagle Zoning table. From "how to read the table:"
To determine in which district a specific use is allowed:
A. Find the use in one of the land use groups;
B. Read across the chart until either "P" or "C" appears in one of the columns;...if no letter appears the use is prohibited.
Going down the list, we see commercial offices (business and professional), hotels, motels, "professional activities", circuses, laundries, clubs or lodges- none of those are permitted uses in a residential zone, or on property zoned R-1 as the property at 2554 N. Saddle Mountain is. So, if the house is being used primarily as an office for a commercial enterprise, it is a zoning violation. Otherwise, it's just Don's house.
Site Land price increases by Ten Million Dollars:
2009 Annual Report:
The Site
After a three-year search, the Company has, through Idaho Energy, located a primary site (the “Site”) in Payette, Idaho that will cost approximately $15.0 million, including the acquisition of water rights. This location is well suited for the licensing, construction and development of a nuclear power reactor.
2010 Annual Report:
The Site
After a three-year search, the Company has, through Idaho Energy, located a primary site (the “Site”) in Payette, Idaho that will cost approximately $25.0 million, including the acquisition of water rights. The Company believes this location is well suited for the licensing, construction and development of a nuclear power reactor.
2009 Annual Report
Land Purchase Agreement
There is an agreement between the Company and the current site owner for the purchase of the land (the “Land Purchase Agreement”) and a draft agreement for the water rights and additional land, which is expected to be executed as a final water rights agreement by the end of March 2010. Once completed, the agreement will transfer title to Idaho Energy upon constructive receipt of an approximately $5.0 million cash payment for the land plus $10.0 million for additional land with water rights.
2010 Annual Report
Land Purchase Agreement
There is an agreement between the Company and the current site owner for the purchase of the land (the “Land Purchase Agreement”) and an agreement for the water rights and additional land for backup site. Once completed, the agreement will transfer title to Idaho Energy upon constructive receipt of an approximately $5.0 million cash payment for the land plus $20.0 million for additional land with water rights. A 4% deposit was previously paid to hold the land for up to twelve months, which was subsequently extended for an additional twelve months to through the end of 2011.
Cost of Overseas Operations quadruples:
2009 Annual Report:
The Company estimates the cost of operation for its four corporate subsidiaries will be approximately $750,000 per year.
2010 Annual Report:
The Company estimates the cost of operation for its four corporate subsidiaries will be approximately $3,000,000 per year excluding phase 1 of the Project.
Whoops, there goes a hundred grand up in smoke:
2009 Annual Report:
At December 31, 2009, the Company had a $100,000 deposit held in the escrow with Perkins Coie to fund a potential joint venture project to develop and manufacture a hybrid engine in China.
2010 Annual Report:
Deposit represented monies held in escrow for a potential joint venture project that will develop and manufacture a hybrid engine in China. The funds were released from escrow and replaced with a note receivable that was deemed to be uncollectible and of no value at December 31, 2010.
Who? Never Heard of Her: Scrub, scrub, scrub!
2009 Annual Report:
Jennifer Ransom, Senior Vice President of Administration and Corporate Secretary
(The Key Senior Executive Vice President's name appears thirteen times in this report)
2010 Annual Report:
Jennifer WHO? The Former Key Senior Executive Vice President's name now appears only once, listing her in a table as "Jennifer Ransom, owner of 5% or more" with the incredible seventeen million shares she received for what the company now claims is really expensive office help.
More in another post.....
.
Wednesday, April 6, 2011
Alternate Energy Holdings' Annual Report Filed: $19.575M Cumulative Net Loss, Loses 38K On Energy Neutral Home, Company's "Internal Controls Not Effective Due to Material Weaknesses"
Alternate Energy Holdings, Inc., today finally filed their Annual Report, SEC Form 10-K, for the period ending Dec 31, 2010.
Among the highlights:
For the period, still zero revenue, and a cumulative loss pushing twenty million dollars:
Built an "Energy Neutral Home" and lost 38K, almost as much as they spent on cruises and travel:
But the really interesting part was the company's admission of their shitty control and recordkeeping:
Direct quote from page 35 of AEHI's SEC Form 10-K"
"A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As a result of this evaluation, we concluded that our internal control over financial reporting was not effective as of December 31, 2010 because of the material weaknesses set forth below.
The following is a summary of our material weaknesses as of December 31, 2010:
Appropriate Documentation Not Retained
Controls established to obtain proper authorization and documentation of expenditures, valuation and recording processes for shares issued for services were not operating effectively. Documentation for some shares issued for services was missing.
Also, there are transactions recorded for services provided where an invoice to substantiate the expense could not be located. Invoices have not been retained to support expenditures reported as required by the Company.
As of February 2011, the Company has put an internal policy in place whereas the CFO is now pre-approving all invoices and stock issuances with the proper support of the CEO's approval of the expenditure. As of March 2011, the Company is providing a monthly listing of any new stock issuance to the Board of Directors for their review and authorization. Due to the current SEC investigation we are also providing the SEC, on a monthly basis, all expenditures over $2,500 with the proper documentation to support the expenditure."
So, NOW (As of March, 2011) they are doing what they should have been doing all along?
Why did it take SEC involvement to get them to do what any legitimate company should have been doing from the outset?
.
Among the highlights:
For the period, still zero revenue, and a cumulative loss pushing twenty million dollars:
Built an "Energy Neutral Home" and lost 38K, almost as much as they spent on cruises and travel:
But the really interesting part was the company's admission of their shitty control and recordkeeping:
Direct quote from page 35 of AEHI's SEC Form 10-K"
"A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As a result of this evaluation, we concluded that our internal control over financial reporting was not effective as of December 31, 2010 because of the material weaknesses set forth below.
The following is a summary of our material weaknesses as of December 31, 2010:
Appropriate Documentation Not Retained
Controls established to obtain proper authorization and documentation of expenditures, valuation and recording processes for shares issued for services were not operating effectively. Documentation for some shares issued for services was missing.
Also, there are transactions recorded for services provided where an invoice to substantiate the expense could not be located. Invoices have not been retained to support expenditures reported as required by the Company.
As of February 2011, the Company has put an internal policy in place whereas the CFO is now pre-approving all invoices and stock issuances with the proper support of the CEO's approval of the expenditure. As of March 2011, the Company is providing a monthly listing of any new stock issuance to the Board of Directors for their review and authorization. Due to the current SEC investigation we are also providing the SEC, on a monthly basis, all expenditures over $2,500 with the proper documentation to support the expenditure."
So, NOW (As of March, 2011) they are doing what they should have been doing all along?
Why did it take SEC involvement to get them to do what any legitimate company should have been doing from the outset?
.
Friday, April 1, 2011
The Dog Ate Our Homework (Again!): AEHI Annual Report Deadline Missed; Files "Notification of Inability to Timely File Form 10-K " Instead
Alternate Energy Holdings' annual report, SEC Form 10-K, was not filed when due on March 31st. A day later, AEHI files this interesting notice: (emphasis added)
Hmmm. Too much trouble to file their reports on time? "Unreasonable effort or expense" would be required to be a fully reporting company that welcomes scrutiny and has always filed its reports on time before?
Like this doozy: "AEHI is in compliance with all reporting to the SEC and is designated as fully reporting, and would not be trading on OTBQX if not." Or: "The only filings that were late was when we changed attorneys earlier this year and couple form 4s I think were late but in the required quarter we never have we missed an important filing like a 10Q or 10K…that summarize happenings and we use lots of press releases to keep people informed…"
Sure, Don. Sure.
.
PART II - RULES 12b-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort or expense and the registrant seeks relief pursuant to Rule 12b-25(b), the following should be completed. (Check box if appropriate)
[X] | (a) | The reasons described in reasonable detail in Part III of this form could not be eliminated without unreasonable effort or expense; |
[X] | (b) | The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, 11-K , Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the subject quarterly report or transition report on Form 10-Q or subject distribution report on Form 10-D, or portion thereof will be filed on or before the fifth calendar day following the prescribed due date; and |
PART III - NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR or the transition report or portion thereof could not be filed within the prescribed time period.
The Registrant is unable to file the subject report in a timely manner because the Registrant was not able to timely compile the subject report without unreasonable effort or expense. The Registrant fully expects to be able to file within the additional time allowed by this report.
Like this doozy: "AEHI is in compliance with all reporting to the SEC and is designated as fully reporting, and would not be trading on OTBQX if not." Or: "The only filings that were late was when we changed attorneys earlier this year and couple form 4s I think were late but in the required quarter we never have we missed an important filing like a 10Q or 10K…that summarize happenings and we use lots of press releases to keep people informed…"
Sure, Don. Sure.
.
Subscribe to:
Posts (Atom)