Lot78 Inc. (OTCBB: LOTE) “up to” $2.5m pump & dump

I first received pump emails yesterday prior to the market open on Lot78 from the various websites of Global Marketing Media LLC, that disclosed “Global Marketing Media LLC has been compensated sixty thousand dollars for a two day marketing and promotional effort on LOTE by Capital Financial Media, LLC.” Capital Financial Media aka CFM aka SmallCapFortunes.com is a big pumper and most of their pumps have hard mailers. Emails prior to the market open today came from MicroCapFortunes.com and BuyPennyStocks.com, linking to this landing page: http://www2.breakawaystocksonline.com/lot78/index.html

Disclosed budget: “up to $2,500,000”
Promoter: Eric Dickson’s Breakaway Stocks

Paying party: Capital Financial Media LLC

Shares outstanding: 57,053,138
Previous closing price: $0.92
Market capitalization: $52 million

“CFMhasmanaged [sic] a total production budget of up to $2,500,000 for advertising efforts and will retain any amounts over and above the cost of production, copywriting services, mailing and other distribution expenses, as a fee for its services. Breakaway Stocks is paid $5,000 as an editorial fee fromCFMand [sic] also expects to receive newsubscriber [sic] revenue as a result of this advertising effort.”

Two years ago Capital Financial Media (CFM) had a reputation for fairly successful large mailer pumps. They no longer have that reputation as many of their pumps in the last two years have done horribly. I am looking to short LOTE at some point, though probably not immediately. Notice the weasily way the compensation is disclosed: “up to $2,500,000” — I believe it likely that nowhere near that much ever gets spent.

Full disclaimer:

IMPORTANT NOTICE AND DISCLAIMER: This advertising issue of Breakaway Stocks does not purport to provide an analysis of any company’s financial position, operations or prospects and this is not to be construed as a recommendation by Breakaway Stocks or an offer or solicitation to buy or sell any security. Lot78, (LOTE), the company featured in this issue, appears as paid advertising by SopacHoldings Ltd. to provide public awareness for LOTE. Breakaway Stocks and Capital Financial Media (CFM) have used outside research andwriters using public information to create the advertisement coming fromBreakaway Stocks about LOTE. Although the information contained in this advertisement is believed to be reliable, Breakaway Stocks and CFMmakes nowarranties as to the accuracy of any of the content herein and accepts no liability for howreadersmay choose to utilize the content.Readers should performtheir own due-diligence, including consultingwith a licensed, qualified investment professional or analyst. Further, readers are strongly urged to independently verify all statementsmade in this advertisement and performextensive due diligence on this or any other advertised company. Breakaway Stocks is not offering securities for sale. An offer to buy or sell can bemade onlywith accompanying disclosure documents and only in the states and provinces forwhich they are approved.Many states have established rules requiring the approval of a security by a state security administrator. Checkwith http://www.nasaa.org or call your state security administrator to determinewhether a particular security is licensed for sale in your state.Many companies have information filedwith state securities regulators andmanywill supply investorswith additional information on request. CFMhasmanaged a total production budget of up to $2,500,000 for advertising efforts and will retain any amounts over and above the cost of production, copywriting services, mailing and other distribution expenses, as a fee for its services. Breakaway Stocks is paid $5,000 as an editorial fee fromCFMand also expects to receive newsubscriber revenue as a result of this advertising effort. *More information can be received fromLOTE’s investor relations firm. Further, specific financial information, filings and disclosures aswell as general investor information about publicly traded companies like LOTE, advice to investors and other investor resources are available at the Securities and Exchange Commissionwebsitewww.sec.gov andwww.nasd.com. Any investment should bemade only after consultingwith a qualified investment advisor and after reviewing the publicly available financial statements of and other information about the company and verifying that the investment is appropriate and suitable. Investing in securities is highly speculative and carries a great deal of risk especially as to newcompanieswith limited operations and no history of earnings. The information contained herein contains forward-looking Informationwithin the meaning of section 27a of the Securities Act of 1993, as amended, and section 21e of the Securities Exchange Act of 1934, as amended, including statements regarding expected growth of the featured company. In accordancewith the safe harbor provisions of the Private Securities LitigationReform Act, LOTE notes that statements contained herein that look forward in time,which include everything other than historical information, involve risks and uncertainties thatmay affect the Company’s actual results of operations. Factors that could cause actual results to differ include the size and growth of the market, the Company’s ability to fund its capital requirements in the near termand in the long term; pricing pressures, technology issues etc.

PDF copy of LOTE pump web page.

[Edit 2013-4-24]: Scan of front and rear of LOTE hard mailer.

Disclaimer: I have no position in any stock mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

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