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by John Barr

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Vol. 13 - March 5, 2014

Profile of Makism 3D (MDDD) - A Penny Stock   

To Baseball Mom, please find a financial advisor you trust.  To financial advisors, as long as Baseball Mom is asking questions about the likes of Makism 3D, there are prospects out there that need you.


Makism 3D (MDDD, $0.63) has no products and no revenue. It just raised $350,000 in a private placement offering, and it has virtually no other assets. It has a CEO and CFO with no experience running a public company.  Finally, it has a $38 million market cap, which was $360 million not so long ago.


I recently rode the commuter bus on a cold New York night with a friend who used to be a sell-side analyst.  He mentioned that high school batting cage baseball practice had started.  A baseball mom asked him about investing in a "3D printing company from the U.K. that's about $75 million."  My friend asked some questions and learned that the mom knew little about the company and he urged her to steer clear.


We would like to report briefly on our research on Makism 3D. When we first looked up Makism 3D on Yahoo! Finance, we found a Las Vegas company, Advanced Cellular, Inc. (Makism 3D's Yahoo! Finance page has since been updated.) Advanced Celullar was a development-stage company with one executive officer who resides in the Philippines and a single shareholder owning 50 million of 70 million shares outstanding. As of June 30, 2013, Advanced Cellular had $4,707 of cash and $1,200 of prepaid expenses. It had no other assets.

Umicron Ltd. was a development-stage company incorporated under the laws of England and Wales by Luke Ruffell, 26, CEO and Matthew Lummis, 26, CFO. Mr. Ruffell studied product design and architecture at Ravensbourne College of Design and Communication of London, which offers a "vocationally focused portfolio of courses, spanning fashion, television and broadcasting, and interactive product design." Mr. Lummis studied Business and Management at University Campus Suffolk and has spent the last four years as Facilities and Landscape Manager for Forest Camping Ltd., a campsite in the U.K.

As of September 30, 2013, Umicron had $1,789 of cash and $11,005 of equipment. On October 29, 2013, Umicron was acquired by Advanced Cellular to create Makism 3D. Makism 3D is a development-stage company looking to develop the Wideboy™ 3D printer. Terms of the merger split the new ownership 51/49 between Umicron and Advanced Cellular holders. Coincident with the merger, the company raised $600,000, with $350,000 due at closing, from an accredited investor for $0.60 per share.


We note that on December 6, the shareholder with 50 million shares, which became 9 million shares after the merger, resigned from the board of the new company, making it easier for him to sell his stock.


Starting in late November 2013, there was a well-funded campaign to promote Makism 3D's stock. Edge Strategies, LLC (no information available) paid Blackrock Media Group, LLC. (no information to be found on them either) $2.75 million to "create awareness about the stock." Providence Media Strategies, a Kitts and St. Nevis company with little information available, was also paid $50,000 by Blackrock Media group for "investor awareness."  Providence operates a number of identical "stock research" newsletters including The Paragon Report and The Bedford Report.  On the front of these research websites they offer research on reputable and established companies such as EMC Corporation (EMC).  They also offer a microcap stock service, which they describe as:


"...provide a service that your broker cannot: informing you of small-cap companies with great potential. Small-Cap stocks are what the name implies... typically a company with a small market capitalization; usually $20 - $100 million. Market capitalization is the price of the company's stock multiplied by the number of shares outstanding. In other words, market capitalization is the price which the market perceives the company is worth."


"There are two reasons why some of the most undervalued companies in the world are not made available to, or by, your broker."


"First, federal and state securities laws keep brokers from offering you some of their most valued information. Certain companies (most of which are small-cap) do not register with the SEC and state securities commission due to the expensive costs that would cripple their company. Therefore, brokers are unable to mention these companies ..."


That is scary stuff.


Makism 3D hit $6 per share or a $360 million market cap (60 million shares outstanding) in late November.   On December 11, 2013, the company issued the following press release.

"Regarding plans for upcoming production efforts in Q1 2014, the Company has entered into final stage negotiations with a number of key component manufacturers in the UK. Chief amongst these is a commitment for January delivery of an initial production run of custom enclosures. In addition, the Company has developed a key relationship with a highly experienced manufacturer of embedded electronics, and also with a noted designer of innovative extruders, which together should contribute a significant degree of functionality, quality, and reliability to the Wideboy™ product line."

Two days later, on December 13, the SEC issued a suspension of trading order "because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in Makism3D's common stock and asked anyone with information about the matter to contact SEC attorneys. When trading closed, the stock was at $1.28. On December 27, the SEC opened trading. Since the December 27 trading halt ended the stock has moved up from $0.40 to $1.18 and is currently trading around $0.63.


Several bloggers and a Seeking Alpha writer are doing a great job reporting on Makism3D. Michael Goode and the website Pumps & Dumps have blogs detailing many penny stock schemes. Seeking Alpha's Penny Stock Realist also does a great job writing about these stocks.

According to Michael Goode, the CEO and CFO claim no knowledge of the $2.75 million paid "stock awareness" scheme.  And from Pumps and Dumps,


"MDDD was begat from the shell known as Advanced Cellular Inc. (ADDU), created through an August, 27, 2010 S-1 filing by Attorney William O'Neal.  It is noteworthy that in 2006, O'Neal was banned by the SEC for writing fraudulent opinion letters in order to remove the legends from restricted stock, as well as for illegally selling restricted stock into the market. There's your first red flag."


"Original President, Nir Eliyahu, still owns 9 million shares of what is likely unrestricted stock, after agreeing to cancel an additional 41 million shares he held, in the transaction to acquire Umicron Ltd. Red flag number two."

On February 4, 2014, Weinberg & Bear LLC was dismissed as Makism 3D's independent public accountant. Unfortunately a stock like this can't be shorted.  There are no shares available to borrow.


So to Baseball Mom, please find a financial advisor you can trust.

To financial advisors, as long as Baseball Mom is asking questions like this, there are prospects out there without advisors. They need you.

The information presented in this commentary is not intended as personalized investment advice and does not constitute a recommendation to buy or sell a particular security or other investments.
This message is not an offer of the Needham Growth Fund, the Needham Aggressive Growth Fund or the Needham Small Cap Growth Fund. Shares are sold only through the currently effective prospectus. Please read the prospectus and consider the investment objectives, risks, and charges and expenses of the Fund carefully before you invest. The prospectus contains this and other information about the Fund.


Investment returns and principal value will fluctuate, and when redeemed, shares may be worth more or less than their original cost. Shares held 60 days or less are subject to a short-term redemption fee of 2%. Past performance does not guarantee future results and current performance may be higher or lower than these results.  Current month-end performance and a copy of the prospectus is available at or by contacting the Fund's transfer agent, U.S. Bancorp Fund Services, LLC at 1-800-625-7071.


Funds holding smaller capitalized companies are subject to greater price fluctuation than those of larger companies. Also, the Fund's use of short sales, options, futures strategies and leverage may result in significant capital loss. Total return figures include reinvestment of all dividends and capital gains. Needham & Company, LLC, member FINRA/ SIPC, is the distributor of The Needham Funds, Inc.