The J-I-N for the I-E-Ds is S-H-I-T, Part IV

I suppose the story of Ionatron’s IED zapper could simply be seen as a good idea that just didn’t work out. It happens all the time in the business and scientific worlds. But there is a very good argument that Ionatron never had a good idea in the first place, but stole it. Mr. Peter Schlesinger, President of the small San Diego based HSV Technologies, Inc., says that in early 2002 he was approached by Joseph Hayden, who represented one of the world’s largest defense contractors, Raytheon, about the possibility of a partnership for joint licensing of “directed energy technology”. Any agreement would be contingent, of course, on Raytheon first having a look at HSV’s proprietary material. HSV had a patented system to disable a fleeing car and short circuit hi speed police pursuits through what HSV called “…electrically conductive air” created by “multi-photon and ‘collisional’ ionization”; a laser.
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Three meetings with Hayden and Raytheon staffers followed, at which the HSV staff shared with the Raytheon folks their most intimate secrets. But the third meeting, on May 31st at the Raytheon facility in San Diego, was interrupted by a man who identified himself as Robert Howard, and whom Joseph Hayden explained did research and development for Raytheon. Howard then boldly announced that all of HSV’s patents were “worthless”, and that Raytheon wasn’t particularly interested in them. Hayden and Howard informed HSV that Howard had a meeting on Monday with Raytheon and HSV must agree by then to sell their patents at Howard’s price or the deal was dead. But in fact, the following Monday, June 3, 2002, Robert Howard was on the other side of the continent, in Delaware, filing incorporation papers creating Ionatron. And a few weeks later Ionatron hired Joseph Hayden and other ex-Raytheon employees, to develop “…laser guided technologies”, with an 8% share to each of the new employees. Raytheon says they have no record of Robert Howard ever having worked for them.
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Then, in March of 2004, in a ‘reverse merger’, Ionatron swallowed up the shell of a failed lawn care provider, U.S. Home & Garden, Inc. What could a research and development firm, interested in “energy beam weapons” find interesting about a lawn mowing and fertilizer service? Could there be some secrete laser application to control crab grass? Or could it be that H&G was listed on NASDAQ, and Ionatron wanted that seat. The entire Home & Garden board resigned along with the CEO, after issuing 48,452,240 new shares of stock, diluting existing shares by well over half, and then exchanging them all for outstanding shares of Ionatron. And the new board of the new U.S. Home & Garden were all familiar faces - Robert Howard as President, James Hayden and Stephen McCahon (both from Raytheon) as V.P.s, Thomas Dearmin as the new CEO and CFO, and David Hurley and George Harlin. All they kept was the name, and they quickly changed that back to Ionatron; same company, same name but now $9 million richer, thanks to all the paper shuffling.
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And about a month before this merger of power mower and the laser became public knowledge Terese Dearmin, wife of Thomas Dearmin, the new CEO/CFO, bought and sold H&G stock, making a very nice profit when news of the merger broke of $13,178. Unfortunately, Terese was also a chatty Kathy, and told so many people about the merger in advance that the SEC made her forfeit the profit and hit her with a $25,000 fine. They also fined her father, with whom she had shared the info, $10,000.00; and her mother; and yet another business partner.
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With the merger, Robert Howard’s salary went from $69,000 in 2004 to $148,000 in 2005, just as the stock was peaking at $10.71 a share. And then, in March of 2006, Howard announced his retirement. At 83, he told shareholders: *
“Because of my age and health concerns, my ability to travel is becoming restricted and I can no longer devote the time and attention to company matters that Ionatron deserves… Since I remain the largest shareholder and biggest believer in Ionatron’s future, I am always available to help in any way that I can and believe the best years are still to come for Ionatron. I plan to focus an increasing portion of my energies on…the Robert Howard Philanthropic Foundation.”
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When Robert Howard had founded Ionatron all he processed was experience and patients filched from HSV. The stock he issued had literally been worth one cent a share, and was now selling for around $9.00. Luckily for Howard he had already cashed in on his creation, back when investors still believed that an IED zapper was a possibility, selling off large chunks of stock. But he remained the largest single stockholder in Ionatron, even if it was now selling for less than $4.90 a share. And in early August 2007 he filed with the SEC when he sold 11,000 more of his shares of Ionatron at $5.37 a share. The buyer was not identified.
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Meanwhile Ionatron has just announced they have a $3 million contract to develop some lasers for the U.S. Navy. They are no longer even talking about their IED zapper.
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Ionatron, Inc.
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