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US Global Nanospace, Inc.
OTC- BULLETIN BOARD SYMBOL USGA
Corporate Headquarters:
2533 North Carson Street*
Suite 5107
Carson City, Nevada 89706
775-841-3246
ir@usgn.com
The Ones Responsible
Officers and Directors and Significant Players
John Robinson
Stephen B. Squires
SEC FILINGS
Some Basic Facts - as of September 30, 2003
Shares outstanding 13 November 2003 - 86,237,839
Total Assets September 30, 2003- $98,029
Total Liabilities - $2,987,244
Revenues for 6 months ending 9/30/03- $125,679
Total Net Loss for 9 months ended 9/30/03 - $3,126,081
Accumulated Deficit - $10,180,436
Stock price when report was published $2.85
Market capitalization $245,777,841
Date Complaint filed: January 28, 2004
Filed with: Enforcement Division Securities and Exchange Commission
Known actions to date - None
NOTE: 28 January 2004 - We have received information pertaining to the foreign patent applications filed by Squires and USDR. These were filed with the European Patent Center.
We apologize for this oversight but searched the USPTO as indicated by USGA. We will continue to investigate this matter to determine the status of these patents.
PATENT INFO
THE SEC COMPLAINT
SUMMARY
BELOW IS A SUMMARY REPORT. TO READ THE ACTUAL COMPLAINT CLICK ON IT.
Before we get into this report in depth, we want to make it very clear here that we support the idea behind anything that will make the troops in Iraq and elsewhere safer.
As much as we support the war on terrorism and Homeland Security, we also have a problem with companies that use these and other hot topics to promote their stock and that is the focus of our report today. US Global Nanospace, Inc. is a company that has capitalized on both and seen their stock skyrocket while consistently failing to deliver. We find this most troubling.
Due diligence produces clues as to some possible reasons why these failures occured.
PRODUCTS WITHOUT PATENTS
In their filings with the SEC, US Global claims as recently as their July 10K that:
Our original product was a cockpit security door for airplane flight decks known as the Guardian(TM) Anti-Ballistic Panel Cockpit Security Door (the "Guardian Door"). USGA's patent on the Guardian Door is currently pending."
They also claim:
"We have applied for patents for our G-Lam material and, as our products are developed we apply for patents if we believe it advantageous. We do not believe that our business would be materially affected by the expiration of any patents, if they are issued."
Also in July 2003 USGA announced that "US Global Nanospace, Inc. today announced it has filed a global patent application for the high performance, high efficiency NanoFilterCX(TM) for cigarettes."
Throughout promotional materials they also refer "USGA's patent-pending G-Lam anti-ballistic material".
And on their website, US Global is even more bold in claiming: "G-Lam™ is USGN's patented anti-ballistic material with half the weight and twice the strength of competitive offerings."
The May 3, 2003 issue of compositeworld.com repeats this bogus patent claim.
They even attached an exhibit to their 10K which listed the various items that, at one time, had some kind of patent action taken on the technologies in question.
However, when we went to the US Patent and Trademark Office web site to search for evidence of existing patent's or applications, we came up sorely lacking. In fact we did not find evidence of one single patent application on file. We looked under Stephen Squires, US Global Nanospace, US Global Aerospace and others and came up empty. We have also requested information from the company and to date have not been provided with any information.
One thing that can be said about the patent office, is that their methodology can be somewhat confusing and we often hear people discussing reasons why the patent actions they have taken are not published to the web. Under the circumstances we thought it would be a good idea to go over the process so you can understand how it works.
In the area of obtaining utility patents there are three basic steps which one can follow. Those are:
Provisional Patent - This is the simplest form of filing and is not reviewed. A Provisional Patent is effective beginning on the date received by the USPTO and for a period of one year only. It cannot be renewed. After that, the provisional patent documents become invalid. The provisional patent is designed to allow the inventor and early filing date for his/her patent while preparing the actual patent application, that when granted will provide the protection patents are designed to give. This is the type of filing that was done on the technologies acquired by US Global. Provisional Patents are not displayed on the USPTO website. Obtaining a Provisional Patent is not the same thing as applying for an actual utility patent however, it does allow the filing party to use the phrase "Patent Pending" with their technology for a period of one year.
Utility Patent Application - In order to be granted a utility patent (the type applicable to all technologies in this deal), a person must file a non-provisional patent application. The process of obtaining the actual patent is a matter of review and revisions over a period of time. It isn't necessary to go into the details here as it isn't relevant. When a person or a company claims that a patent has been applied, they are claiming that they have actually filed a patent application. (Since provisional patents are granted upon receipt and overnight delivery is asked for by the USPTO, it wouldn't make much sense to say you had applied for a provisional patent since you would have been granted it the day after "applying"). Utility Patent applications are posted to the USPTO website once a patent application number has been assigned. This process usually takes no more than three months. Accordingly, since this is near the end of January 2004, all patent applications filed by mid October 2003 should now be displayed on the USPTO website.
Patent - Once the non-provisional patent application has been submitted in the proper form and has been reviewed by the Patent Office and found to meet the requirements, then a patent is granted. Of course, we don't have to discuss this particular category any further since it has absolutely nothing to do with US Global or any of their products at this time.
Now that you understand the patent process a little better and understand what is and what isn't displayed on the USPTO website, let's review the dates the Provisional Patents were filed and see if they are still in effect.
This is from the assignment agreement to US Global.
The following United States and foreign patent applications and
all issues, reissues, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof:
A. U.S. Provisional Patent Application for an Anti-Ballistic,
Nano-Scale Composite Sheet, Application . 60/327,684 filed October 6,
2001, assigned to USDR Aerospace, Ltd. by assignment dated
October 19, 2001, recorded in U.S. PTO on January 29, 2002.
B. U.S. Provisional Patent Application for an Anti-Ballistic,
Light-Weight, Secure Cockpit Door, Application No. 60/349,988
executed on January 18, 2002 and filed January 23, 2002.
Assigned to USDR Aerospace, Ltd. by Assignment of Application
executed on January 18, 2002
C. U.S. Provisional Patent Application for an Anti-Ballistic,
Wide Angle Peephole Viewer, Application No. 60/349,990
executed on January 18, 2002 and filed January 23, 2002.
Assigned to USDR Aerospace, Ltd. by Assignment of Application
executed on January 18, 2002.
Each of these provisional patents expired more than a year ago! They cannot be extended! There is no disclosure that any further action has been taken by US Global and based upon our searches of the United States Patent and Trademark Office, no non-provisional utility patent applications have been filed by USGA as of approximately October 15, 2003. Could USGA have simply filed for another provisional patent simply so they could continue using the phrase "patent-pending"?
Also, we believe there is a material difference between a patent application and a provisional patent application and the investing public has a right to know the difference.
Has US Global attempted to mislead the investing public by re-filing annual provisional patent applications at a cost of about $80 in order to help promote their stock by claiming "patent pending" or have then not even bothered with that? Either way, what is obvious is that US Global has not filed an actual utility patent application despite the fact that the original provisional applications all expired well over a year and even two years ago. We have written USGA for clarification but have not received a response to this and other questions and issues raised in this report.
On a side note, it makes us wonder if, since it is a certainty that all the provisional patents that were subject to the royalty agreement have long expired, if US Global still has any obligation under this paragraph.
"in consideration of the sum of $10.00 and other good and valuable consideration, the receipt of which is hereby acknowledged, and the promise by Assignee to pay Assignor a royalty of three and one-half per cent (3 1/2 %) on all of Assignee's sales until Assignor has received a total of $15,000,000 and a royalty of one per cent (1%) of all of Assignee's sales thereafter until all patent rights of the Intellectual Property have expired". Of course with John Robinson controlling the vote, he can always decide to pay himself the money regardless of what is fair or legally required. Such is the risk investing in a company where one man controls the show.
(as recent history indicates, that include increasing the authorized shares from 100 million to 300 million)
The fact that all provisional patents included in the sale have expired and no actual utility patent applications appear to have been filed for ANY USGA product prior to October, 2003, it also makes us wonder if there is anything special about the products that US Global is bragging about.
US GLOBAL'S PRODUCTS
G-LAM
G-Lam, US Global's supposedly patented anti ballistic material sounds very much like one of the newer materials out there today. USGA claims it is not an aramid fiber like Kevlar but rather a PBO like material which would make it like Zylon. Zylon, however, has recently had its own share of problems as some of their bullet proof vests are being penetrated.
Since they have not actually patented G-Lam or even filed a utility patent application as of October 2003, are they simply using someone else's fabric to build their products? There is nothing wrong with this, as long as you disclose what is true. One thing is for sure, we have our concerns.
ALL-CLEAR(tm)
We also have some real problems with USGA's representations about this particular product.
We have noticed that USGA posted the following claim on their website, that ALL CLEAR (tm) is "designed to allow expansion to include remediation of agro-terrorism or pesticide threats and to mitigate other livestock or agricultural risk from diseases such as Mad Cow, Hoof & Mouth or bacterial wilt"
They also claim
"In addition, ALL-CLEAR is being efficacy tested internationally for eradication and containment of both Hoof-and-Mouth and Mad Cow diseases and for use in other wide area applications, such as decontaminating aircraft arriving from quarantined areas and decontaminating farms and ranches"
Mad Cow disease is caused by prions. Animals are infected when they eat food containing these prions. We have seen no evidence that MCD is transmitted by casual contact or even between cows who may from time to time kiss passionately.
Animal feed is contaminated with prions when feed processors grind up parts of animals infected with the disease to make food such as bone meal. It is not spread like a virus or bacteria might be spread. Basically, when you feed a cow, food containing bone meal from another cow (cannibalistic cows, imagine that) and that bone meal was made from a cow with MCD, then the disease is spread to the cow eating cow. (tofu burgers anyone?).
Just like many people pumped their stock based upon some far fetched connection to anthrax when that scare was most vivid in American's minds, today many companies are attempting to attach their products to one of today's latest hot-buttons, two of them being nanotechnology and Mad Cow disease.
More than being a product which actually represents the ability to interrupt the MCD cycle and play a material part in its eradication, we believe that the only cycle being truly affected here is most likely the pump and dump cycle. In fact, we think the best way ALL CLEAR(tm) might be effective in preventing a cow from becoming infected with Mad Cow disease would be to stick the spray nozzle up the cow's ass as it approached the contaminated feed and discharge the unit until the cow thinks better of it and changed directions.
Neither TIAX or the US Government has suggested this product is designed to impact the global Mad Cow problem and we would like some scientific support for US Global's contentions prior to taking them at face value.
Guardian anti-ballistic security cockpit door
SALES BUT NO REVENUE
Another serious problem we have with US Global Nanospace is their consistency in announcing and promoting their stock based upon contracts that never materialize.
Let's examine the many claims and statements as well as the truth surrounding the alleged sales of the companies Guardian cockpit door.
On July 25, 2002 USGA, (then Caring Products, Inc) announced that their "proprietary Guardian™ Anti-Ballistic Panel Cockpit Security Door was selected for installation in DHL Airways' DC8 cargo aircraft. DHL, an air cargo industry leader, is anticipating the need to comply with broadening FAA flightdeck security regulations, initially enacted only for passenger-carrying aircraft."
They went on to claim that "The Guardian™ Door is expected to be the first reinforced cockpit door to receive STC certification from the FAA, which USDRGA anticipates receiving by August 2002."
They earlier announced in June 2002 that the application for STC certification had entered phase 5, the last phase in the approval process.
In their February 2003, 10Q, the company claimed that "on September 11, 2002, we entered into an agreement with El-Al Israel Airlines to install the Guardian (TM) Door on El-Al's 747-200B aircraft."
Then again on April 25, 2003 the company announced that "US Global Aerospace, Inc. (OTC Bulletin Board: USGA) announced today it has received new orders totaling $1,440,500 for 38 of the Company's Guardian(TM) Cockpit Security doors. The new orders include doors for El Al Israel Airlines' Boeing 737, 747, 757 and 767 fleets, and Aer Lingus' Airbus A320 and Boeing 737 fleets. The USGA Guardian(TM) door is the only enhanced security flight deck door that has passed the Israeli Security Agency's (ISA) extensive testing and been determined by the ISA to meet its rigorous standards." (Was this the same or a different El Al order?) (We also want to note that US Global has subsequently edited the original press release on their website to remove any mention of Aer Lingus for reasons which will become apparent).
In May 2003, this claim was expanded by Stephen Squires, who at that time was claiming to be the "Vice Chairman" of the company in an interview with the Reno Gazette. He claimed then that “We have 200 firm orders from existing airlines, inside and outside the U.S., including (Israel’s) El Al Airlines” In this same article, Squires claimed that "About 50 of the Carson City-based company’s nearly 500 employees are involved in" the Guardian door program." Of course, USGA never has had anything close to 500 employees.
It is now 1 1/2 years after August 2002 and the FAA has still not issued the STC certification for the Guardian door.
According to his resume, President John Robinson had considerable experience working with the FAA prior to becoming President of USGA. We believe he knew or should have known that FAA approval would be highly unlikely or impossible within the 35 days as he claimed when announcing the DHL sale.
In their July 11, 2003 filing of their 10K, the company basically attempts to unwind everything it claimed previously by saying:
In April 2003 El Al Israel Airlines, while it was under the control of the government of Israel, submitted an order to USGA for the purchase of Guardian Doors for its fleet of aircraft. Since that time, however, the airline has been privatized. Currently we are unsure whether the change in ownership will have any effect on the purchase of the doors. In April 2003 we also received a purchase order from Aer Lingus, the national airline of Ireland, for Guardian Doors. Shortly after we received the purchase order, Aer Lingus notified us that it intended to award the contract for the cockpit doors to Airbus. We believe that the major original equipment manufacturers (OEMs) in the aircraft industry have such overwhelming resources and influence in the marketplace that it will be difficult or impossible for us to gain entry, even though we believe that the Guardian Door is the best product available. We are currently reassessing our ability to compete successfully in the OEM-controlled market for secure cockpit doors. However, we will continue to obtain a wide range of STC's for very specific markets, as we have identified a number of profitable custom door opportunities in areas that we believe the major OEMs are unwilling or unable to supply.
Although anything is possible, after researching matters we have serious doubts about the accuracy of these claims. Here's why
1. El-Al only floated between 15% and 24% of their outstanding stock so the government retained control of the company. If firm contracts were in place, we believe that El Al, as a corporation, would still be required to honor its commitments. Of course this assumes that USGA was being completely truthful when it clearly stated that these were firm orders.
2. Air Lingus, on the other hand, announced the very next day after the US Global press release that they had completed installation of secure cockpit doors on all 7 of their international Airbus 330 jets. Additionally, according to USGA their doors are designed to Boeing model 7x7's and the Airbus 320. USGA doesn't mention the Airbus 330 which is an entirely different plane from the 320.
The article also indicated that Aer Lingus was "in the process of examining options for the introduction of the doors on all short haul flights". Come on now, let's take a reality pill here. Aer Lingus was even more financially troubled following 9-11. Furthermore, it is common knowledge that Airbus is a government subsidized airline. Their only immediate requirements were to have security doors installed on their international flights and that was announced as COMPLETED THE DAY AFTER US GLOBAL ANNOUNCED THE SALE!
I admit to being born at night, but it wasn't last night! Something stinks here. Something stinks real badly.
So, did Aer Lingus cancel or was there ever a purchase order produced in the first place? Another aspect of this we find if very hard to accept is that any reliable companies would cancel a purchase order. Purchase orders normally are the final step in the process of acquiring a product and are designed to specify exactly the details of the item being purchased at that time. For example, a company might contract to purchase 7 cockpit doors from a supplier then issue the first purchase order for 2 of those doors to signal the desire to have them shipped pursuant to the contract.
Something stinks here and we would like to know exactly what happened with the orders and the certification. We simply aren't buying the excuses given by USGA.
AND, BY THE WAY, WHERE ARE THE OTHER 162 DOOR ORDERS?
Let's not forget what Vice Chairman* Stephen Squires told the Reno Gazette. “We have 200 firm orders from existing airlines, inside and outside the U.S., including (Israel’s) El Al Airlines”.
According to Rich Schineller, the man in charge of investor relations for USGA, the El Al and Aero Lingus orders totalled 38 of the 200 represented in the Vice Chairman's statement. So, where are the orders for the other 162 Guardian Anti-Ballistic Cockpit Security DoorS?
Here's another question that really needs to be answered. Is USGA a Production Approval Holder? A Production Approval Holder (PAH), according to the FAA, is the holder of a Production Certificate (PC), Approved Production Inspection System (APIS), PMA (Parts Manufacturer Approval) or TSOA (technical standard order authorization) who controls the design and quality of a product or part thereof. Since USGA is quick to brag about accomplishments, many of which are called into question because they never materialize, you would think they would disclose it if they were. It seems that the FAA requires not only certifies parts like different doors used to retrofit passenger airplanes, but they apparently certify manufacturers and designers as well.
The last mention of the Guardian cockpit doors in a company press release was in an October update where it merited only three lines saying that the company claimed to still be talking to El Al about their doors and that they hadn't yet received the FAA certification that John Robinson assured the current and potential investors would be granted by August 2002. The subsequent Company Update listing the company's primary products didn't even give the Guardian door a mention.
Total value of door orders
between Aer Lingus and El Al $ 1,440,500
Total approximate value of all
200 firm orders @ $50,000 each $10,000,000
(USGA claims a value of $40,000
to $180,000 per door)
TOTAL REVENUE FROM SALE $ ZERO - ZIP - NADA
OF DOORS
NO PATENTS AND NO SALES! IS THERE ANYTHING ELSE?
Well, let's try to be accurate, USGA did manage to sell some Radomes for total gross revenues of $125,679 in the last 6 months. These were the first revenues since the company's inception in March 2002 and allowed the company to hold the accumulated deficit for the first 21 months to only $10,475,838.
MOOSE RIVER CONSULTING? WHO COULD FORGET MOOSE RIVER CONSULTING?
On October 29, 2002, the company proudly "announced its acquisition of the Nanosil™treatment technology through an exclusive license agreement with Moose River Consulting, Inc. Nanosil™ is a proprietary super hydrophobic surface modification process that produces surfaces that are designed to repel water completely."
They also announced that their market potential for their Nanosil technology would exceed $50,000,000 per year!
The acquisition was disclosed in the subsequent 10Q in November 2002 and was never heard of again.
ANYONE CARE TO TELL US WHAT THAT WAS ABOUT? DID THEY ACTUALLY ACQUIRE IT? WHAT HAPPENED TO IT?
WHO IS MOOSE RIVER? WHERE ARE MOOSE AND SQUIRREL?
Vice Chairman?
Stephen Squires, alleged inventor of many of USGA's technology and Chief Technology Officer of USGA was interviewed by The Reno Gazette in May 2003. Steve demonstrated, better than most, the companies complete disregard for accuracy. First of all, he presented himself as the Vice Chairman of USGA. This position usually describes a director of the company who would serve as Chairman in the event the Chairman wasn't able to. Of course, when the company filed its 10K in July, Squires was not listed as director or an officer and certainly not Vice Chairman.
Of course Squires had other interesting statements which were equally as questionable. Here they are.
US Global Aerospace Inc.’s previous work was mostly classified, “so you wouldn’t see a lot about us,” said Vice Chairman Steve Squires.
Of course, prior to getting involved in the Guardian cockpit door, the company called itself Caring Products International and their work was designing "a line of proprietary urinary incontinence products with disposable liners which were sold under the Rejoice brand name in the U.S., Canada and Europe" Of course, we never realized that adult diaper technology falls under the heading of national security requiring their development to be "mostly classified" but that is what Vice Chairman Squires seemed to be telling us.
“Really our expertise is in advanced materials development, mostly nanosciences,” Squires said.
Prior to announcing the hiring of Dr. Jiang Zhu on January 2, 2004, the company had not revealed any credible evidence to support this claim. We have seen no resume for Steven Squires, USGA's Chief Technology Officer so only know he used to be the president of Avcom Technologies and was responsible at least in part for Wheelits a lighting system designed so "THAT PEOPLE COULD SEE YOUR COOL CUSTOM WHEELS AT NIGHT WHILE YOU ARE DRIVING DOWN THE ROAD"
Strangely enough, Avcom Technologies' parent company before it went bankrupt was United States Defense Research. Hey, isn't USDR owned by John Robinson? Small world!!
Here is another statement from the Vice Chairman.
“We have 200 firm orders from existing airlines, inside and outside the U.S., including (Israel’s) El Al Airlines,” he said. “That will grow substantially now that the rest of the carriers can see the time savings.”
We already have covered this claim so no sense going over it again. Are you starting to get the picture here? But wait, here is another Squires-ism.
About 50 of the Carson City-based company’s nearly 500 employees are involved in this program, he said.
“We hope for 2003 to have 5 percent market in the U.S. and 10 percent of the world share,” the executive said. “That’s $56 million in revenues — and we think that’s conservative.”
When USGA filed its 10K in 60 days later, it was revealed that the company only had 11 full time employees. Plus, given what we know now about the door situation, and given at the time, the door was not certified and the company had zero revenues from inception, does anyone think $56 Million in the next 9 months was conservative in Squires or Robinson's mind?
Executives offices are WHERE???
* The article also described the company as a Carson City based company. What the company has never bothered to disclose to the market is that their address of
2533 North Carson Street*
Suite 5107
Carson City, Nevada 89706
belongs to Laughlin Associates, a Nevada incorporation company that also, for a fee, allows you to call their offices yours. There isn't a 5th floor in this two story building so Suite 5107 will be kind of hard to find. Now technically, Laughlin Associates offers their incorporation customers a special package where, for a fee, you can probably qualify to CALL their offices your office to qualify under the tax codes as Nevada has no corporate income tax. You also get use of conference rooms and other office features when you are in town but if you ask yourself the question, does John Robinson and his associate of many years Julie Seaman or any other full time employees (actual not technical) show up for work at the Laughlin offices every day? We don't think so. They are all working out of their actual offices at 1016 Harris Road, Arlington, Texas. Now frankly, we don't care what kind of charade a company wants to use to get the proper tax breaks but we think it is inappropriate at least to represent to a reporter that your company is a Nevada based company like Squires did and make it sound like it is a genuine part of the Nevada economy.
Of course, one has to question what kind of reporter would simply interview a person then write a story without even bothering to check any of the facts. Talk about lazy and irresponsible reporting! PR companies do that but they are paid to regurgitate company promotional rhetoric. We always thought reporters and ESPECIALLY business editors like Ed Shur were supposed to be more responsible than that. We wrote Mr. Shur to see what steps he took to confirm the various representations made by Squires and the only reply we got was that they didn't share non-published information but "the proper attributions were in the story". Given the strength of his work here, he should consider applying for a job at the New York Times.
TROUBLE WITH PROCEDURES
Normally we wouldn't concern ourselves if a company failed to measure up to the standards expected by an accounting firm for reporting to the SEC. However, US Global is a company that has set its sights on working with the FAA and meeting their ever so stringent record keeping requirements. Because they are responsible for keeping air travel safe both mechanically and in matters of security, we are certain that the level of compliance required for companies working within the industry probably exceed that of a public company. Furthermore, when it comes to the war on terror, national security and the military and the war on terror we also believe companies who seek to do business with the the military and the manufactures who supply them with equipment must also have their internal systems for recording and reporting efficiently established. That is why we find it so troubling to read this disclosure in the company's last 10Q.
"Our Chief Executive Officer ("CEO") and our Chief Financial Officer ("CFO") carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on those evaluations our CEO and CFO believed that our disclosure controls and procedures were designed to ensure that information required to be disclosed by us in the reports we file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. However, this review was based on historical practices and procedures. Our CEO and our CFO were informed by Grant Thornton LLP ("GT") in July 2003 that our historical practices and procedures were not effective, would not insure timely reporting of the information required to be reported and would have to be changed. As a result of the foregoing, we will be implementing significant changes in our disclosure controls and procedures. We intend to take immediate corrective actions."
We are concerned this could be a visible symptom of a problem far greater than what has been revealed. Is this company run with the type of a commitment to accuracy and efficiency that should be contracting to help provide for your defense and the defense of your military?
POSSIBLE LEGAL PROBLEMS?
We also located information pertaining to some litigation involving Stephen Squires and his Avcom Technologies, Inc. We have highlighted the troubling phrase in the failed appeal made by Avcom and Squires. During the trial, it reveals that:
Due to a “dire financial situation,” Avcom subsequently executed an assignment for the benefit of creditors, transferring all of its assets to another company.
Now, we are not attorneys so we are only speculating here but were these assets the rights to the technologies now being developed by US Global that were transferred and was Robinson's USDR Global Aerospace, Ltd. The timing certainly seems appropriate and these technologies were transferred apparently first from Squires and/or Avcom to USDR then from USDR to US Global. If this is the case, then this makes the fact that USDR appears to have been the parent company of Avcom at one time even more relevant and interesting.
Since it appears also that the failed appeal resulted in a possible judgement for the plaintiff, we are also wondering if the plaintiff might also have a claim against the property transferred. We are attempting to contact the plaintiff to determine if this is the case. If there is something here, it could certainly explain why Stephen Squires suddenly decided to start going by S. Brad Squires. One thing for sure. We have a lot more questions than we have answers about this particular situation.
CONCLUSION
US Global Nanospace, Inc. is a company that has demonstrated the ability to talk the talk an awful lot more than it has walked the walk. They claim to be developers of patented and patent pending technologies yet these technologies were originally developed in 2001 and early 2002 and following the filing, at that time, for Provisional Patents, we can find no evidence of any actual utility patent applications being filed up to October 2003.
They are a company that has promoted themselves based upon claims of FIRM orders for about $10,000,000 worth of their cockpit doors yet failed to generate a single dollar in revenues from those doors despite the fact that they claim these orders go back as far as September 2002.
They are the kind of company that explains to a reporter that the reason they hadn't been heard of much before was because their work was mostly classified when their previous products were adult diapers.
They are a company that appears willing to jump on just about any bandwagon in order to promote their stock including the Mad Cow disease bandwagon.
Now they are asking us to believe that the military is actually testing their Humvee turret in Iraq and Afghanistan. Given their past tendencies, are we to believe them or is this simply another exaggeration? They recently announced that they have made a deal with an Israeli manufacturer to build their turrets and that the deal included an initial order of 20 turrets. What they didn't spell out, as usual, was who ordered the turrets. We suspect this order was not an order from a USGA customer but rather from USGA itself. Not surprisingly, the news release didn't make this point clear.
Many of the answers to our questions raised here lie within the files of USGA's corporate offices... no... let's try to be more accurate. Many of the answers to the questions raised here lie within the files at the company's offices in Midland, Texas. We have written them to clarify the issues of patents and sales and will report here what we learn when/if they respond.
Frankly, we are concerned enough about the apparent deceptions going on that we feel the SEC should give serious consideration to taking a look at exactly what is going on at this company.
As always, we will gladly provide a forum for any documented and verifiable comments by the company and will promptly and sincerely apologize for any errors in our facts. Our commitment is to bring forth the truth and the facts in the matter and we encourage US Global Nanospace to produce whatever documents they can to clear up our concerns and the concerns of what we assume are many USGA shareholders.
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