2014-11-05 SEC Press pdf 25 KB 8,385 chars

In re APT Motovox Group

Exhibit of SEC Sanctions 10 Companies for Disclosure Failures Surrounding Financing Deals and Stock Dilution

summary

APT Motovox Group, Inc. violated Section 13(a) and Rule 13a-11 by failing to disclose over 2 billion shares of unregistered common stock issued between January and June 2014, each batch exceeding 5% of outstanding shares, and agreed to a cease-and-desist order and $25,000 penalty without admitting guilt.

paragraph

APT Motovox Group, Inc. failed to file required Form 8-K disclosures for unregistered stock issuances totaling more than 540 million shares (Jan–Mar 2014), 650 million shares (Apr–May 2014), and 810 million shares (May–Jun 2014), each exceeding five percent of its outstanding shares. These omissions violated Section 13(a) of the Securities Exchange Act and Rule 13a-11, which mandate timely reporting of unregistered equity sales by registered issuers. The SEC accepted a settlement in which Motovox consented to a cease-and-desist order and agreed to pay a $25,000 civil penalty in nine installments through July 15, 2015.

narrative

APT Motovox Group, Inc., a Delaware corporation registered with the SEC and trading under the symbol MTVX on OTC Link, violated Section 13(a) of the Securities Exchange Act and Rule 13a-11 by systematically failing to disclose unregistered stock issuances. Between January 15 and March 14, 2014, Motovox issued over 540 million shares, exceeding 135% of its outstanding shares as of November 2013; between April 23 and May 14, it issued over 650 million shares, surpassing 16% of its outstanding shares as of April 2014; and between May 23 and June 16, it issued over 810 million shares, exceeding 17% of its outstanding shares as of May 2014. Each of these issuances triggered mandatory Form 8-K disclosure requirements under Item 3.02, yet Motovox filed no such reports during these periods. The company, formerly known as Frozen Food Gift Group, Inc., had been registered since February 2012 and was obligated to comply with ongoing reporting duties. Without admitting or denying the findings, Motovox consented to a cease-and-desist order issued by the SEC on November 5, 2014, and agreed to pay a $25,000 civil penalty in nine installments through July 15, 2015, with payments directed to the Enterprise Services Center and a copy sent to the SEC’s Atlanta office.

Enriched metadata

Scheme: unregistered-securities (80%)
Outcome: settled
Civil penalty: $25,000

Classified unregistered-securities(confidence 80%). EDGAR detection: forms Form D/S-1· recall 41% / precision 30%. detection rule →

Extracted insights

Dollar amounts 4

$25K $25,000 $10K–$100K
$10K $10,000 $10K–$100K
$2K $2,000 <$10K
$1K $1,000 <$10K

Triples 9

Securities and Exchange Commission deems appropriate cease-and-desist proceedings be instituted
Respondent submitted Offer of Settlement
Commission determined to accept Offer of Settlement
Respondent consents to entry of Order
Motovox is Delaware corporation headquartered in Kansas City, Missouri
Motovox has been registered with Commission since February 3, 2012
Motovox entered into agreements with financing company on February 14, 2014, March 11, 2014, and March 21, 2014
Motovox sold more than 540 million shares of its common stock to financing company and other parties between January 15, 2014 and March 14, 2014
Motovox failed to file Form 8-K with Commission between January 21, 2013 and March 20, 2014

PDF

In re APT Motovox Group · Source

Text layers

Extracted body text (8,385c)

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 73522 / November 5, 2014

ADMINISTRATIVE PROCEEDING
File No. 3-16253

In the Matter of

APT Motovox Group, Inc.

Respondent.

ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO
SECTION 21C OF THE SECURITIES
EXCHANGE ACT OF 1934, MAKING
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER

The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities
Exchange Act of 1934 (“Exchange Act”), against APT Motovox Group, Inc. (“Motovox”) or
“Respondent”).

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the
purpose of these proceedings and any other proceedings brought by or on behalf of the
Commission, or to which the Commission is a party, and without admitting or denying the findings
herein, except as to the Commission’s jurisdiction over Motovox and the subject matter of these
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making
Findings, and Imposing a C ease-and-Desist Order (“Order”), as set forth below.

III.

On the basis of this Order and Respondent’s Offer, the Commission finds
1
that:

Company Background

1. Motovox (formerly known as Frozen Food Gift Group, Inc.) is a Delaware
corporation headquartered in Kansas City, Missouri. Motovox is a smaller reporting company
under Rule 12b-2 of the Exchange Act and has been registered with the Commission under Section
12(g) of the Exchange Act since February 3, 2012. Motovox’s last-filed periodic report was the
form 10-Q/A for the period ended March 31, 2014. Its shares are quoted on OTC Link (formerly
“pink sheets”) operated by OTC Markets Group Inc. under the symbol MTVX.
Applicable Reporting Requirements Concerning the Issuance of Unregistered Shares

2. Under Item 3.02 of Form 8-K, a smaller reporting company must disclose the
unregistered sales of equity securities unless such sales, in aggregate since its last report filed under
Item 3.02 or its last periodic report, whichever is more recent, constitute less than five percent of
the number of shares outstanding of the class of equity securities sold. The registrant must file
within four business days of the date of the occurrence or when such agreement becomes
enforceable against the registrant.

Motovox Failed to Disclose the Issuance of Unregistered Shares

3. On or around February 14, 2014, March 11, 2014, and March 21, 2014, Motovox
entered into agreements with a financing company (“financing agreement”) pursuant to which
Motovox issued shares of common stock to the financing company purportedly in reliance on a
registration exemption found in Section 3(a)(10) of the Securities Act of 1933 (“Securities Act”).

4. Between January 15, 2014 and March 14, 2014, Motovox sold more than 540
million shares of its common stock to the financing company and other parties in transactions that
were not registered under the Securities Act. On January 15, 2013, the common stock sold, in the
aggregate, exceeded five percent of the number of shares of common stock outstanding reported on
Motovox’s November 19, 2013 Form 10-Q. Ultimately, the common stock sold exceeded 135
percent of the number of shares of common stock outstanding reported on Motovox’s November
19, 2013 Form 10-Q, as amended on February 14, 2014.

5. Motovox failed to file a Form 8-K with the Commission between January 21, 2013
and March 20, 2014, disclosing the unregistered sales of equity securities.

1
The findings herein are made pursuant to Respondent’s Offer of Settlement and are not
binding on any other person or entity in this or any other proceeding.

6. Between April 23, 2014 and May 14, 2014, Motovox sold more than 650 million
shares of its common stock in transactions that were not registered under the Securities Act. On
April 23, 2014, the common stock sold, in the aggregate, exceeded five percent of the number of
shares of common stock outstanding reported on Motovox’s April 15, 2014 Form 10-K, as
supplemented by its April 16, 2014 Form 8-K. Ultimately, the common stock sold exceeded 16
percent of the number of shares of common stock outstanding reported on Motovox’s April 15,
2014 Form 10-K, as supplemented by its April 16, 2014 Form 8-K.

7. Motovox failed to file a Form 8-K with the Commission between April 29, 2013
and May 19, 2014, disclosing the unregistered sales of equity securities.

8. Between May 23, 2014 and June 16, 2014, Motovox sold more than 810 million
shares of its common stock in transactions that were not registered under the Securities Act. On
May 23, 2014, the common stock sold, in the aggregate, exceeded five percent of the number of
shares of common stock outstanding reported on Motovox’s May 20, 2014 Form 10-Q.
Ultimately, the common stock sold exceeded 17 percent of the number of shares of common stock
outstanding reported on Motovox’s May 20, 2014 Form 10-Q.

9. Motovox failed to file a Form 8-K with the Commission between May 29, 2014 and
June 20, 2014, disclosing the unregistered sales of equity securities.

10. As a result of the conduct described above, Motovox violated Section 13(a) of the
Exchange Act and Rule 13a-11 thereunder, which require every issuer of a security registered
pursuant to Section 12 of the Exchange Act to file with the Commission information as the
Commission may require, including current reports on Form 8-K to disclose the occurrence of
certain events.

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions
agreed to in Respondent Motovox’s Offer.

Accordingly, it is hereby ORDERED that:

A. Pursuant to Section 21C of the Exchange Act, Respondent Motovox cease and desist
from committing or causing any violations and any future violations of Section 13(a) of the
Exchange Act and Rule 13a-11 thereunder.

B. Respondent shall pay civil penalties of $25,000 to the Securities and Exchange
Commission. Payment shall be made in the following installments: $10,000 on or before
November 15, 2014; $2,000 on or before December 15, 2014; $2,000 on or before January 15,
2015; $2,000 on or before February 15, 2015; $2,000 on or before March 15, 2015; $2,000 on or
before April 15, 2015; $2,000 on or before May 15, 2015; $2,000 on or before June 15, 2015; and
$1,000 on or before July 15, 2015. If any payment is not made by the date the payment is required

4
by this Order, the entire outstanding balance of civil penalties, plus any additional interest accrued
pursuant to 31 U.S.C. 3717, shall be due and payable immediately, without further application.
Payment must be made in one of the following ways:

(1) Respondent may transmit payment electronically to the Commission, which
will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent may make direct payment from a bank account via Pay.gov
through the SEC website at http://www.sec.gov/about/offices/ofm.htm
; or

(3) Respondent may pay by certified check, bank cashier’s check, or United
States postal money order, made payable to the Securities and Exchange
Commission and hand-delivered or mailed to:

Enterprise Services Center
Accounts Receivable Branch
HQ Bldg., Room 181, AMZ-341
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying
Motovox as a Respondent in these proceedings, and the file number of these proceedings; a copy
of the cover letter and check or money order must be sent to William P. Hicks, Division of
Enforcement, Securities and Exchange Commission, 950 East Paces Ferry Rd. N.E., Suite 900,
Atlanta, Georgia 30326.

By the Commission.

Brent J. Fields
Secretary

OCR text (8,389c · tika · 95% conf)

UNITED STATES OF AMERICA

Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 73522 / November 5, 2014

ADMINISTRATIVE PROCEEDING
File No. 3-16253

In the Matter of

APT Motovox Group, Inc.

Respondent.

ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO
SECTION 21C OF THE SECURITIES
EXCHANGE ACT OF 1934, MAKING
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the
purpose of these proceedings and any other proceedings brought by or on behalf of the
Commission, or to which the Commission is a party, and without admitting or denying the findings
herein, except as to the Commission’s jurisdiction over Motovox and the subject matter of these
proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Cease-
and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making
Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below.

III.

On the basis of this Order and Respondent’s Offer, the Commission finds1 that:

Company Background

Applicable Reporting Requirements Concerning the Issuance of Unregistered Shares

Motovox Failed to Disclose the Issuance of Unregistered Shares

5. Motovox failed to file a Form 8-K with the Commission between January 21, 2013
and March 20, 2014, disclosing the unregistered sales of equity securities.

1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not
binding on any other person or entity in this or any other proceeding.

7. Motovox failed to file a Form 8-K with the Commission between April 29, 2013
and May 19, 2014, disclosing the unregistered sales of equity securities.

9. Motovox failed to file a Form 8-K with the Commission between May 29, 2014 and
June 20, 2014, disclosing the unregistered sales of equity securities.

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions
agreed to in Respondent Motovox’s Offer.

Accordingly, it is hereby ORDERED that:

by this Order, the entire outstanding balance of civil penalties, plus any additional interest accrued
pursuant to 31 U.S.C. 3717, shall be due and payable immediately, without further application.
Payment must be made in one of the following ways:

(1) Respondent may transmit payment electronically to the Commission, which
will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent may make direct payment from a bank account via Pay.gov

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or

(3) Respondent may pay by certified check, bank cashier’s check, or United

States postal money order, made payable to the Securities and Exchange
Commission and hand-delivered or mailed to:

Enterprise Services Center
Accounts Receivable Branch
HQ Bldg., Room 181, AMZ-341
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying

Motovox as a Respondent in these proceedings, and the file number of these proceedings; a copy
of the cover letter and check or money order must be sent to William P. Hicks, Division of
Enforcement, Securities and Exchange Commission, 950 East Paces Ferry Rd. N.E., Suite 900,
Atlanta, Georgia 30326.

By the Commission.

Brent J. Fields
Secretary