Home Public Markets Litigation Blog Subscribe Racing Contact
   Consultants to public companies, brokers, attorneys, regulators and OTC Markets Group, Inc.

Rainmaker Worldwide: Another Example of the Need for Extreme Due Diligence By Entities Looking For Funding and the Financiers Who Fund Them

Rainmaker Worldwide: Another Example of the Need for Extreme Due Diligence By Entities Looking For Funding and the Financiers Who Fund Them
Initially Posted: October 22, 2017 6:00 p.m. PDT   

Rainmaker Worldwide, Inc. (OTC: RAKR) has been the subject of some attention among followers of the three ring circus that is the over-the-counter markets.  The attention has been brought on the company, as it has been recognized as the current promotion of an unscrupulous group of promoters known as the Elite Penny Stock Group. Members of EPS presumably include some of those that were involved with the Awesome Penny Stocks group.  Both groups have been integral in the loss of hundreds of millions of dollars by investors in worthless penny stocks, almost all of which are now either suspended or dormant.

Some members of APS have been prosecuted.  Others are in hiding in hopes of avoiding capture.  Still others, including key figure, Eric Van Nugyen, are miraculously at large, presumably after cutting some sort of deal with regulators and authorities in exchange for ratting out there buddies.  Why Van Nugyen et al. are still free, is the subject of much speculation, but one thing is certain: the old promotional tactics of APS are alive and well within EPS.

Anyway, APS and EPS are not what this blog post is about.

From September 19th, trading volume in shares of Rainmaker saw an uptick from the previously sporadic trades executed since the ticker went live on July 24th.  On September 25th, shares were exchanging hands in earnest and the price began a determined climb upward. On October 9th, shares had reached a peak, nearly doubling in price from levels of just three weeks earlier.  By then, those who conduct the forensic research to ferret out penny stock fraud, including yours truly, already knew what was going on.

On October 10th, OTC Markets Group, facilitator of the OTC Link platform on which over-the-counter stocks trade, tagged Rainmaker with the dreaded Caveat Emptor skull and crossbones, a flag often applied to companies with aggressive promotional activity, such as what Rainmaker is experiencing.

Rainmaker is in the midst of a classic pump and dump program, designed to create hype through promotion, and the impression of interest in the stock through wash trading...all in classic APS/EPS style.

When the dust settles, Rainmaker stock will be trading at a fraction of current prices, and the company, whose technology and founders appear to be legitimate, will have lost all ability to draw favorable funding, having been drained of credibility.

The alternative scenario---probable in my opinion---is that trading in the stock will be suspended by the SEC, a frequent epilogue for companies under this kind of activity.

Consider the circumstances:

The CJTF Shell

The Rainmaker asset was vended into Gold & Silver Mining of Nevada, Inc, a filthy dirty company, previously known as CJT Financial, Inc., from which the ticker symbol CJTF was derived.  CJTF was a classic pump and dump scheme during the tenure of both companies, creating an endless amount of stock which was then dumped upon retail investors, usually during campaigns of hyping the stock.  As recently as November 17, 2016, CJTF still feigned being involved in gold mining.

From July 2015 to June 2017, a span of less than two years, after which the Rainmaker asset was vended into the shell and the company name and ticker symbol were changed, CJTF executed three reverse splits, the net result of which was that 2.6 billion old shares is now worth one share.  The previously glorified "assets", which were the subject of the hype during past pump and dump campaigns, have magically disappeared under cover of the company's statement, "CJT is no longer the wholly-owned subsidiary of the Company".

Kevin Wright

From June 16 to July 12, following the resignation of N. Fred Anderson, Kevin Wright was named the sole officer and director of CJTF.  These two dates mark when Wright bought the shell from Anderson and then subsequently flipped it to the Rainmaker crew.  As of the writing of this blog, Wright remains a director of RAKR and maintains voting control of RAKR through the issuance of 4 preferred shares to his company, JAAM Capital, Inc.

Kevin Wright can be connected to a number of previously hyped tickers, sometimes through his company JAAM Capital, Inc., some of which are now dormant companies, including ticker symbols PUBC, MMTMF, FBCD, CHUM, and FNHI.  Each of these tickers have created significant investor losses.

Kevin Wright is also an officer/partner in Rethink Capital, LLC and Vibe Capital, LLC, which is significant for reasons I will discuss later.

It seems likely that at the commencement of trading in RAKR, Kevin Wright controlled over 14 million free trading shares, the result of the partial conversion of a note he held in the amount of $214,500.  Almost certainly, it is these 14 million shares that are being sold into the market during the current promotion.

Paul Heney

Upon the consummation of the July 12th reverse takeover of Rainmaker, Paul Heney was named as an Executive Vice-President.

In past lives, Heney was an officer of two companies that were the targets of pump and dump campaigns, Rainchief Energy, Inc. (OTC: RCFEF), which was the subject of multiple Cease Trade Orders by the British Columbia Securities Commission, and the particularly dirty and ongoing bitcoin scheme, Digatrade Financial Corp. (OTC: DIGAF), which I believe could also be heading for an SEC suspension.

Michael O'Connor

Michael O'Connor became the President and CEO of Rainmaker on July 12th, as part of the reverse takeover. He is also the Chairman of the Board.

O'Connor previously held similar positions with My Screen Mobile, Inc. (OTC: MYSL), a now dormant shell.  I find it particularly disturbing that this dubious part of his past has been obfuscated from the biography that was included in the company's July 27th disclosure.

The Landing Page

The Rainmaker promotion begins with the publishing of a landing page at AmericanWaterBaron.com--saved in perpetuity here--,which has already been linked throughout social media.  According to Who Is records, the domain was registered on August 16th, just weeks before and in the planning of the current promotion campaign.

What is important is that this landing page contains a disclaimer that is almost identical to that which was found at AmericanTechReport.com, a now depublished website that earlier this year contained the landing page for the promotion of American Leisure Holdings, Inc. (OTC: AMLH).  The devastation created by the AMLH promotion is evident in its chart.



Expect that the AmericanWaterBaron.com site will also be depublished at the conclusion of the Rainmaker promotion.

Among the few differences between the RAKR and AMLH disclaimers, is this statement within the AMLH disclaimer, "We publish the Information on our website, stocks.expert...".  This is key.

Peter Kolacz

By picking through DNS records, the domain stocks.expert can be shown to be owned or at least controlled by Peter Kolacz of Mississauga, Ontario.  Kolacz can be connected to numerous pump and dump subjects in addition to AMLH, including tickers IMPG, INXR and EMYSF.

So did the disclaimer on AmericanWaterBaron.com merely plagiarize the disclaimer previously found on the the AmericanTechReport.com site?  As far-fetched as that may seem, any doubt of a connection between the two promotions evaporates with the revelation that Kolacz is a partner with Kevin Wright in Rethink Capital, LLC and Vibe Capital, LLC.

The connection between Kolacz and Kevin Wright is the smoking gun and is clear cut proof that Rainmaker Worldwide is under the thumb of some devious promoters and other bad actors, including Kevin Wright. Consider the following:

Peter Kolacz was partners with Anthony Thompson in now defunct Nevada corporation, Microcapster Corp.

Anthony Thompson, together with Jay Fung and Eric Van Nugyen--yes the same Eric Van Nugyen that was part of the APS crew-- was charged by the SEC for conducting pump and dump schemes in several tickers.

The Peterbourgh Connection

Peterbourgh is a small city about 85 miles north of Toronto, Canada.  It is the headquarters of Rainmaker.  The Peterbourgh Examiner is the local newspaper and has published a couple of articles regarding Rainmaker, including one announcing the commencement of trading in the stock, which curiously sounded like a pump piece.  Even more curious is that when I attempted to contact the writer of the Rainmaker articles, the paper approached CEO Michael Connor, rather than respond to my attempts to reach out to them.  Is there some sort of inappropriate allegiance here? Draw whatever conclusions you like.  I have drawn my own.

Peterborough is also the home of the Peterbourgh Region Investor Angels (PRAN).  PRAN members have invested a total of $2.5 million in Rainmaker, receiving restricted stock which will not become legend free until July 24, 2018.  Unfortunately for these members, their stock is likely to be worthless, or near worthless by the time that date comes along.

Michael Skinner

Michael Skinner is the Chief Strategy Officer of Rainmaker and a director of PRAN.  Contrary to Michael O'Connor's objections to my inquiries, Skinner was quite generous with his time, and we chatted for about on hour on Friday the 20th.

According to Skinner, the PRAN members contributed the $2.5 million investment over a period from late 2015 to early 2016. This means that the members have to wait about 2 1/2 years from the time of their investment to being able to execute any sort of exit strategy.  This seems unreasonable to me, but they were probably deliberately set up to stay out of the way of the pending stock dump(s).

Skinner stated that the CJTF shell was recommended for a Rainmaker reverse takeover by Michael O'Connor and Paul Heney, after they reportedly conducted the appropriate due diligence.  It was also Michael O'Connor who brought Kevin Wright and Paul Heney into the deal.

Now I should state that Skinner vouches for Michael O'Connor, having known him for years.  He is familiar with O'Connor's efforts with MYSL, and had even considered acquiring the company at one point, but decided against the acquisition after conducting his own due diligence.   According to Skinner, MYSL had a legitimate technology and would have been a success if not for the demise of Blackberry.  Of course my suspicions regarding O'Connor's relationship to Rainmaker prevail, since his past with MYSL was left off the disclosed biography and especially since he was the one who brought Wright and Heney to the deal.

Skinner claims not to have heard of Peter Kolacz and for some reason or other, I tend to believe him.

John D. Thomas

John D. Thomas is an attorney who is attempting to help Rainmaker combat OTC Market's CE tag with an opinion letter filed 8 days after the skull and crossbones were applied.  Thomas has represented numerous dirty tickers including; AZFL, CHIT, DNAD, EKNL, HCEI, PKGM, RNTL, SRPX, and VICT.

MacDonald Tuskey Corp.

It is interesting that John Thomas is helping Rainmaker with its CE problems, rather than its listed securities counsel, MacDonald Tuskey Corp.  This firm has its own docket of dubious clients, past and present, each with its own pump and dump history. They. are too numerous to identify them all, but include HHWW, OMVS, AGIN, BLKG, NVGC, NMED, LEXG, LITH and former APS promotion, PRTN.

Conclusion

I would think that Rainmaker would be facing an entire differently future had they had access to the due diligence discussed in this post.  Almost certainly, the members of PRAN, headed by Michael Skinner, would have objected to the circumstances that lead to the current predicament.  Those considering reverse merger and financing would be best served by an independent study of any deal being considered.  There are too many wolves among the sheep.

I expect that the members of PRAN who invested a total of $2.5 million in Rainmaker, will have a nice write off against future capital gains.  RAKR shares will eventually tank, unless the SEC gets to them first, after which the floor will drop once trading resumes on the grey sheets.  In the meantime, expect lots of "yeah, but"s to this post.

~ George

Disclaimer: Although I consult for OTC Markets Group, they had nothing to do with this report, nor did they sanction me to conduct my investigation or write this report.  The decision to apply a Caveat Emptor tag on Rainmaker stock or any other action deemed appropriate by OTC Markets Group, is not discussed with me in advance.  I do, however, discuss certain independent findings on companies with certain parties at OTC Markets Group, as I do with the SEC, FBI or other regulatory bodies or authorities.  I hold no position in any of the companies mentioned and never have.
-->