|10-17-2007, 11:49 AM||#1|
Join Date: Oct 2005
Xyience Subject to Desist and Refrain Order in California
by Adam Swift
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Xyience, who recently signed a 3-year contract extension as the official energy drink of the UFC, was issued a Desist and Refrain order by California's Department of Corporations on September 10, 2007. Among the allegations contained in the order:
* Selling $2.1 million dollars in stock to California residents without the state's authorization.
* Material misrepresentations made to investors regarding pending litigation and the prior business success of CEO Russell Pike.
* Failure to disclose a default judgement against Pike for writing bad checks.
* Failure to disclose signed confessions of judgement in an action involving Pike's former business venture, Advanced Cart Technology (ACT), for using false pretenses, false representations, and fraud to convince investors to invest in the company.
* Failure to disclose a prior guilty plea to bank fraud, money laundering, and aiding and abetting in connection with ACT, resulting in a sentence of 59 months in a federal prison, three years of supervised release, and a restitution order for $2,367,146.
* Failure to disclose ACT bankruptcy proceedings
* Failure to disclose a prior prison sentence for grand theft and forgery
The order concludes:
Based upon the foregoing findings, the California Corporations Commissioner is of the opinion that the common stock of Xyience Incorporated is a security subject to qualification under the California Corporate Securities Law of 1968 (California Corporations Code section 25000 et seq.) and is being or has been offered or sold without being qualified in violation of Corporations Code section 25110. Pursuant to section 25532 of the Corporate Securities Law of 1968, Russell Craig Pike and Xyience Incorporated are hereby ordered to desist and refrain from the further offer or sale in the State of California of securities, including but not limited to common stock, unless and until qualification has been made under the law or unless exempt.
In addition, the California Corporations Commissioner is of the opinion that the securities of Xyience Incorporated were offered or sold in this state by means of written or oral communications which included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, in violation of section 25401 of the Corporate Securities Law of 1968. Pursuant to section 25532 of the Corporate Securities Law of 1~68, Russell Craig Pike and Xyience Incorporated are hereby ordered to desist and refrain from offering or selling or buying or offering to buy any security in the State of California, including but not limited to common stock, by means of any written or oral communication which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.
The order was filed approximately one month prior to announcement of the extension of the company's relationship with the UFC.
|10-17-2007, 11:51 AM||#2|
East Side Guru
Join Date: Feb 2007
Re: Xyience Subject to Desist and Refrain Order in California
How Xyience makes any money on anything other than the Energy drinks, which are quite good tasting for being sugar free, is beyond comprehension.