If you have seen the most recent SEC filing by the CEO of IC Places, Inc. Mr. Steven Samblis (formally IC Punch Media, Inc), you might have noticed a section making a statement about, have there been any legal proceedings. See graphic below (click to enlarge). As one could imagine, any legal proceedings the company is involve with are an important piece of information that should be included in the filings, so investors can be aware of any real or perceived risk the company may have as a result.
Well… this most recent filing, the 10K (see here), as well as the previous filing, the 10Q (seen here) there is NO mention (or can be said, “disclosure”) that there is in fact a legal proceeding that, by all appearances should have been disclosed. Please refer to the graphic below (again, click to enlarge). Notice the dates of both the commencement of the legal action, and the dates of the K/Q reporting periods.
It’s public knowledge that the lawsuit was filed, and active when the SEC filings were submitted, so WHY was the legal action against the company not disclosed ? If interested, a complete listing of the initial complaint, and all subsequent documents can be obtained here. With the damages demanded ($75,000), that would have resulted in approximately 250 million shares of stock to satisfy payment. Many would agree this is significant, so significant as to certainly warrant inclusion (disclosure) in each filing where the action was still active. With approximately 16 documents having been filed with the court over a 6-month period, and at least $75,000. on the line, one would think it would be difficult to “forget” about the lawsuit, such that it would be overlooked when completing the SEC filings.
Also, as evidenced in the below graphic, before an actual trial began there was an out of court settlement. According to the documents, the settlement amount was $32,128.00, to be paid in 3 monthly installments. And as a condition of the settlement there was a provision in the settlement that provided for the event of a default (i.e. non-payment). In the event of a default, a Judgement would be entered IN THE FULL AMOUNT of sought damages (i.e. $75,000.).
Well, guess what… Mr. Samblis did not make the very first payment, and, as the settlement terms allowed for, a Judgement for the full $75,000. was entered, AND… of course additional legal fees were requested as a result. See the graphic below.
Where does the lawsuit stand today… unknown. There was a hearing scheduled for 2/14/2014 but as the below graphic indicates, there was a “No Appearance”. We don’t know WHO didn’t appear, or WHY they didn’t appear. We have attempted to contact Mr. Kernan but as of this posting date there has been no response. One could assume the debt is still outstanding, (if Mr. Samblis couldn’t make the first 10k payment, its unlikely he could come up with the 75k full default amount), however there is no confirmation of such at this time. One could also assume that if the debt had been satisfied, such a significant expenditure would need to be listed in the 10K document. However, there would be no need to assume anything if Mr. Samblis were to make a statement as to the status of the lawsuit. He could say: a) its paid, b) he could say its not paid and why… c) he could say its not my fault and blame it on the accountant, or d) and the most likely is… he could not say anything, and if he remains silent on the matter, that might give a good indication as to if its been paid yet.
Also troubling, and may explain a lot about the whereabouts of content (2000 hours of video, etc) and other issues, such as the reasoning for the “Strategic Partnership” designation of MyImagineTV (instead of a wholly owned subsidiary of IC Places, Inc.), is the notification in one of the attorney’s letters seen below. Notice the highlighted section related to the “remedies” available, specifically “taking possession of intellectual property”.
What was the lawsuit about… it had to do with the breach of terms and conditions set forth in a “Producer Agreement” regarding the production of the “Woody and Craig, Zombie Hunters”. See the quasi-press release in the below graphic.
So folks… fraud, or an honest mistake? You have the facts, and you can form an opinion of your own.
Additionally, it would seem appropriate for investors to ask… have there been any other misrepresentations in any of the previous SEC filings? We know, as pointed out by Joseph Collins, that Mr. Samblis’s employment contract had not been listed in any previous filings prior to the dispute between them. The notification of the employment contract started appearing after the dispute. Below is an excerpt from one of our previous posts here, demonstrating there was apparently misrepresentation of Mr. Samblis’s Employment Contract. One would think that an employment contract with terms that paid the CEO 250 million shares of stock, and $250,000. as compensation, would be significant enough to disclose.
Investors are led to believe that reports submitted to the SEC by reporting companies are accurate, and portray a valid and complete picture of the company listed. With examples like the above, one rightfully questions if investors can really count on the accuracy of such documents. Can you really trust what you read in these SEC filings anymore ??? What else may have been “forgotten” ?
The other indirect negative ramification of this breach of contract is… it would seem reasonable that other people in the network production/entertainment/talent end of the business may be hesitant to do business with Mr. Samblis now that he has a history of a breach of contract. This no doubt makes it more difficult to do business.