Description

Sniffex has $87,000 in cash, total assets of $140,000 (excluding a product license of $600,000 which I’ll get to later), against liabilities of $275,000 (aS of 9/30/05). All in all well less than $1 million dollars has been put into the business. The current market cap with 79 million shares outstanding is $240 million (I kid you not). I recommend it as a short.

Sniffex smells like stock promotion. Sniffex was incorporated in Nevada (the first clue) on October 27th, 2004 with the name Snissex. On November 1st, 2004 the Board approved an amendment to change the name to Sniffex (the secretary has a hard time spelling). In January 2005 the company’s charter was revoked due to clerical errors. In February 2005 the company was reincorporated in Nevada.

On March 23, 2005, the Company entered into a non exclusive Patent Sublicense Agreement with TASC International for an apparatus and method for the detection of materials. The agreement grants the Company the license to market and manufacture the device under the name Sniffex. The Company markets the devise as a hand held explosives and weapons detection device.

The Company issued 60,000,000 common shares to TASC International and Ivan Velichkov (both based in Europe) at $0.01 to acquire the rights to the patents. So ten months ago the stock value set by the company in this transaction was one penny, today the stock sells for $3.12, an appreciation rate of 31,100%. The value of the license was $600,000 when acquired and today its “pink sheet” value is $187 million.

On January 6th, the company put out a press release stating it had received $5 million in funding from a European group. No terms were given. I have called the company and they are unwilling to talk about the terms or the investor. Pure speculation on my part but maybe someone is selling the one penny stock at $3 to $5 dollars and putting a little back into the company to make the company’s value look more legitimate.

Sniffex is headquartered in Irving, Texas and the CEO is Paul Johnson. Mr. Johnson is the former CEO of another pink sheet company, LifeStyle Innovations, which formerly had a market value of over $100 million and a balance sheet similar to SniffEx’s. Now it just has a balance sheet similar to Sniffex since it trades at $.001 cents and has a market cap of $3 million.

There is a wed site called junkfax.org that is dedicated to helping stop junk faxes. There is an entry on the site that talks about a company called Vision Labs that sends out junk faxes. In the entry regarding Vision Labs is a reference to a company called DataPoint Technologies which had used Vision Labs to send out blast fax stock promotions. DataPoint Technologies office address is the same Sniffex’s. 5215 N. O’Connor Blvd. Suite 200 Irving, Texas 76039.

So does the handheld bomb detection device work? There is a quirky web site for the James Randi Education Foundation that is headed by a profession magician that exposes phycics, faith healers and such. It offers $1 million to anyone that can, in a controlled setting prove they have “super” powers. They may be stepping out of their mission statement some on this one but they have offered a challenge to Sniffex to successfully demonstrate the device. Here the entry on the site with the commentary and letter sent to Paul Johnson the CEO of Sniffex


Certified Mail #7003 0500 0002 3034 8263 received on August 8/05 – that I wrote to the CEO of a company selling a device he calls the Sniffex, a hand-held toy which is the same as the Quadro Locator and the DKL LifeGuard. Do a search on our site for references to those frauds.



Paul Johnson, Sniffex, Inc.
S5215 North O'Connor Blvd.
Suite 200
Irving, TX, 75039
Dear Mr. Johnson:

This is a formal offer to you and your corporation from the James Randi Educational Foundation. We stand prepared to award you our million-dollar prize for a successful demonstration of the Sniffex device that you market.
Details on this offer can be found at www.randi.org/research/index.html on the Internet.

For your convenience, I have enclosed a printed-out application form. Simply fill this out and return it to this Foundation, and we will immediately begin arranging a simple protocol – in line with those which you say were done at the New Mexico Institute of Mining and Technology

We await your response.

Well, yes, we await a response. But we’ll move on with our lives while waiting...

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Other commentary from Jame Randi Foundation website....

Go to [www.sniffex.com] tinyurl.com/c8nz and notice how fuzzy the letterhead is… I’m currently looking into that performance report, which has no date, and the grammar and spelling are shaky. So far as I can tell, New Mexico Tech – where I visited last month – can’t verify that they did any testing of this device. The report even misspells the name of the Sniffex as “Snieffix.” The engineer who they say invented this wonder, Bulgarian Yuri Markov, is said to have been “a satellite connection consultant to the Deutsche Telecom over the past 10 years.” How that qualifies him as an expert in explosives, I cannot tell.

In any case, Yuri and Paul claim that the Sniffex can detect a sample of explosive “several meters” away, in steel- or concrete-shielded casings. I propose a test – for the JREF prize – from just half a meter away, the explosive contained in a simple paper bag. That should be very interesting to Paul Johnson, but I guarantee that it won’t; it would show that the Sniffex is a fake, a fraud, a scam.

You have my address and telephone number, Mr. Johnson...


There is another reference to Sniffex on the web through a bulletin board for people involved or interested in military or law enforcement special operations. On it is a current reference to a Sniffex demonstration that the person had witnessed in Seattle. The comments follow...

“Supposedly you hold this widget in one hand and walk around with your other arm sticking out and the magic antenna will point to the explosives. During the demo the company “VP” missed a block of C-4 and was only able to narrow down some sheet explosives to an area of three cars (and he went right by the four boxes of .40 cal in the truck of XXX car)”.

There is a website called Stocklemon that has done a profile on Sniffex that includes a description of a web of people involved in Sniffex that have common ties to other promotional public companies.

I know very little about bomb detection, but I believe the odds are that the devise has little value and so does the company.. at least a small fraction of the $250 million market cap. I have recently found shares to short but likely at levels that suit an individual or a smaller size Fund.

Catalyst