Since writing our first exposé on the dodgy dealings of Qtrax founder Alan Klepshitz in April, there have been some new and interesting eventualities that we thought TMV readers would be interested in.
Firstly, after having announced a deal with WMG on Feb 19, 2009, Qtrax still hasn’t made Warner content available. Why? TMV believe it is because they have yet to pay Warner the advance payment owed in order to get possession of the content. After some research it appears that Klepshitz has been on an international trip looking for more cash in order to pay Warner as well as settle some of the many financial judgments against Brilliant Technologies, Qtrax and him personally. These judgments are quickly approaching 7 figures and Klepshitz hasn’t held any shareholder meetings or filed any SEC reports in over 2 years.
The BLLN investor forums have been rife with fury over what has been characterized has “AK’s lies”. Evidently some of these small investors have been livid with the recent discovery of a significant amount of legal action against the company that had not been disclosed to shareholders as well as the shocking number of bounced checks that Klepshitz has been passing.
Klepshitz defenders on these boards are telling their fellow shareholders to be patient because portability and an international launch are just weeks away. These Qtrax defenders have been accused of “pumping and dumping”. According to one poster named “qcrap”, “just look at volume of stock”. The institutions are trapped because AK has them trapped. He has not filed so they cannot sell the toxic shares they have acquired and they are no doubt rightfully angry as well.
One poster goes on to say, “Trust me. that will be the next legal news you see…another example of lying to people…these guys funding the company to keep it going are now stuck with shares they cannot sell…good grief this guy is a snake! ”
Some zealots on this particular board, like the poster calling himself “Q-tunes”, post not only a blind defense of Klepshitz but also bazaar conspiracy theories. “I think it has always been clear that Apple, or someone, discovered the deals were not final and used it to try and kill Qtrax. On the positive side, Qtrax was able to show the labels the massive global interest in the service- just look at the web traffic the day of the non-launch. Maybe the labels were a little sneaky in there negotiating, trying to get more out of Qtrax. This, along with the economic down turn really slowed the process, IMO. Overall, though, the Midem event really only caused some bashing from the bloggers… because it gave them something juicy to write about and stir up debate. Now that the dust has settled, Qtrax has a little time (while under the radar) to finalize and fine tune their product before launching it the RIGHT WAY.”
Talk about delusional loser! In TMVs view information available in the public domain condemns AK. Alan via Robin Kent event contact TMV requesting and off the record chat. I say what is the point of an off the record chat when there are so many legal issues in the public domain. How about an “on the record” chat? But considering he has not filed any SEC report s in two years. In the US that is a federal offense. TMV’s key question would be why have these SEC filings not been made? But we all know the answer to that one. If he had field these reports TMV are pretty sure his investor base would be non-existent! Anyone called the FBI yet?
In the meantime, Klepshitz has been tracked to the 5-star Langham Place Hotel in Hong Kong, where he staked out for the last week and most likely took advantage of the “world class spa”. He appears to have moved his road show to Singapore this week, where he seems to consistently find money. Klepshitz evidently has a way with Asian investors who apparently don’t really care about rigorous due diligence.
The deal for new investors, according to the aforementioned boards, is that Klepshitz is offering shares in Qtrax, not the parent company Brilliant Technologies (BLLN is currently trading at around $0.25 a share) at $.50 a share with a minimum purchase of $25.000. But fear not, he’ll throw in an option to purchase an equal number of shares for the bargain basement price of $.25 each. So let’s do the math: $25,000 will buy you 50,000 shares and you’ll be able to buy another 50,000 shares for $12,500 thus making you the proud owner of 100,000 shares of Qtrax for a mere $37,500. And the key thin here of course, is that none of this has been reported to the Securities Exchange Commission (SEC).
On top of all this, there still lurks an action recently filed in the US Federal Courts in the Southern District of New York. US Federal Court are much more serious than state courts in the US and heretofore all of the Klepshitz/Qtrax/Brilliant lawsuits have been field in state courts. For some reason the federal suit has not yet been filed electronically. To get a copy one must visit the court and get one physically. TMV wonders if Klepshitz tried to somehow negotiate a deal to keep the suit from being available over the internet in an effort to shield it from investors?
Finally, where do labels stand on all this? Major labels seem to have no problem taking money from Qtrax even though it has clearly come from investors who Klepshitz does not pay back…moral? Not in TMVs view, but then again, the labels have been known for years to be worse than pimps in the morals department – Not all but a damn site many.