Published by Vancouver Sun

By David Baines

It started last Saturday with a teaser. A penny stock promotion service called BoldStocks.com sent me an e-mail saying it was going to recommend a stock on Monday. The stock’s identity would remain a secret until then, but “Mr. Bold” offered a hint: “It could not be more timely.”

On Sunday morning, there was another hint: “Don’t leave home without it.” And in the evening, yet another: “More than 10 years in business with stable management and key researchers.”

On Monday, the mystery company was revealed: Skinvisible Inc., a Las Vegas-based company that has developed a hand sanitizer to prevent the spread of the H1N1 virus.

Boldstocks.com is one of several Internet tout services run by Pentony LLC of Frisco, Tex. The disclaimer revealed that Skinvisible had paid Pentony 500,000 restricted shares to stage this little game.

At the close of business on Monday, “Mr. Bold” proudly announced that Skinvisible, which trades on the OTC Bulletin Board in the United States, had closed up seven per cent on double the usual trading volume. But keep in mind, this is a penny dreadful where percentages can be very misleading. The absolute increase was one cent, to a grand total of 15 cents.

Skinvisible claims its “DermSafe chlorhexidine hand sanitizer has been tested against many bacteria and viruses. It has been proven to kill / inactivate a number of influenza A viruses; including a strain of H1N1, the swine flu virus.”

But there are lots of effective hand sanitizers already on the market (including plain old soap). The difference is that Skinvisible claims it has a patented ingredient that fights germs up to four hours after washing, but this has not been proven.

In the United States, the product requires Federal Drug Administration approval before it can claim to combat swine flu. It has not received that approval. In Canada, the product has been approved by Health Canada for personal use only.

A few days ago, the company announced it has sold licensing rights to a distributor for all of Singapore, Malaysia, Thailand, Indonesia and the Philippines. This might be encouraging, but for two things: Payment terms were not disclosed, and the announcement was made by Terry Howlett, the company’s president and CEO.

Howlett is well known to me as a former Howe Street denizen who learned very early in his career that a promoter, like a virus, has to adapt quickly to its environment to survive.

Howlett’s first Howe Street adventure, Presley Laboratories Inc., was listed on the Vancouver Stock Exchange in April 1987.

It began as a multi-level marketer of “Lady Love” cosmetics and hair products, but soon switched gears and announced it would acquire Modern Electronics Inc., which had developed a security system for buildings.

By June that year, the company was referring to Modern as its “wholly owned subsidiary” and projecting sales of $500,000 the first year and $1 million the second. But several months later, Howlett announced the “proposed” acquisition had fallen through. More premature exclamations would follow.

In September 1988, Howlett announced Presley would market a telephone touch-tone order entry system developed by a person named Jerry Hodge of Irving, Tex. (A dozen years later, Hodge would pop up again in Skinvisible.)

In February 1989, Howlett announced a letter of intent to sell 10 systems worth $665,000 to a Calgary company over the next six months. Projected sales over the next year were $3.3 million.

But within several months, he announced this deal had also fallen through. Instead, the company would sell marketing and software rights to the ordering system to a Vancouver company for $5.5 million. This also fell apart.

In January 1990, Howe Street bon vivant Harry Moll — who was building a VSE mini-conglomerate called Pineridge Capital Group — acquired a controlling interest in Presley from Howlett.

Howlett — who remained as chairman — kept churning out good news. He said the company’s Canadian dealer would buy $6 million worth of product over the next 12 months. And that was just Canada. Marketing in the U.S. would start in September 1990.

As always, the proof was in the financial statements. Total sales for the two years ending July 1991 — when Howlett was promising millions of dollars in revenues — were only $98,000, and losses were a whopping $1.3 million.

In 1992, Moll’s mini-conglomerate collapsed in scandal. It was revealed he had sold hundreds of thousands of dollars worth of shares in Presley and several other Moll-controlled companies to the Wolverhampton municipal pension fund in England. That raised the question, what was a supposedly sober fund like this doing in flaky stocks like these?

The fund manager was later fired, raising suggestions that he had been taking bribes. Moll denied he had provided any special incentives: “Just lunch, and a cocktail or two,” he said.

Then-B.C. premier Glen Clark was sufficiently alarmed by Moll’s antics that he commissioned a government inquiry into regulation of the exchange. VSE officials, meanwhile, blackballed Moll from any association with its listed companies.

In the wake of this scandal, Moll returned control of Presley — which by this time had been renamed Voice-It Technologies Inc. — to Howlett.

Without missing a beat, Howlett announced the touch-tone ordering system would be used in a venture called Talking Flowers, which enabled people to send flowers and talking messages to their loved ones. It was also a flop.

Howlett made more breath-taking announcements that never amounted to anything. By June 1997, he resigned as director and president. The company limped along until March 1999, when it was suspended for failure to file financial statements, then delisted for failing to pay its listing fees.

In 2000, Howlett reunited with his old pal Hodge and his buddy Moll — even though he had been thoroughly disgraced by now — and took Skinvisible public on the bulletin board.

In his usual style, Howlett has been spewing a steady stream of boosterish announcements, but they haven’t amounted to much. During the six months ending June 30, the company reported $146,976 US in sales while racking up another $879,621 in losses, raising its cumulative losses to $17.8 million. Total assets were only $195,938 against $746,484 in liabilities, which means the company is basically insolvent.

Howlett said during a brief telephone interview this week that he now lives in Las Vegas, where the company’s head office is located. He said Moll and Hodge are no longer involved.

I asked what he thought of the BoldStocks.com hype. He said he had nothing to do with it, which is strange considering that Pentony says the company paid 500,000 shares for the service.

Asked what he thinks of that style of promotion, he replied, “I have no opinion on it.”

That was an astute answer. I mean, who wants to spoil their own party?

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