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Recently Banned Promoter Linked to Reg A Advance

Fee Scheme (Part 1 of 3)
By Teri Buhl and Brett Goetschius | March 6, 2017

A California securities offering promoter who was the subject of the very first SEC enforcement action taken against a participant in the
newly reformed Reg A market has been linked to a group of websites claiming to offer capital-hungry companies and their investors a soup-
to-nuts money raising experience in exchange for cash fees and shares, despite lacking the necessary securities licenses to do so legally,
and in seeming defiance of a recent ban imposed by the agency.

Steven J. Muehler, 41, a Marina Del Rey, Calif.-based financial consultant with a history of federal and state securities law violations that
led him to be banned from the industry last June, has reconstituted his now four-year old scheme to create an “alternative securities
market” for Reg A companies with a full suite of services including deal advisory, offering marketing and securities brokerage, proprietary
investment by self-managed venture funds, and a listing market for secondary sales, an investigation by Growth Capitalist has found.

Muehler’s companies and executives are involved as advisors and intermediaries in at least 12 Reg A offerings filed since June, in addition
to a filing for an offering by the scheme’s main holding company, listing Muehler as the lead representative for the issuer, filed one day after
he was permanently banned from the securities markets. Despite the ban, Muehler’s company is promoting itself as a one-stop shop for
emerging growth company executives seeking to raise capital via Reg A offerings in return for fees of up to $10,000 and 5% of the
companies’ issued stock.

According to state corporate records and federal securities filings, Muehler, who sometimes
spells his name as “Mueller”, controls directly or through proxies a group of companies under
the umbrella of AltaVista Capital Markets, LLC. The companies were listed in a June 2016
filing for a $20 million Reg A offering for AltaVista Capital Markets that stated the company
consisted of three wholly owned subsidiaries: an investment advisory and asset management
firm called AltaVista Private Client; AltaVista Securities, a FINRA broker-dealer, and AltaVista
Capital Markets International, Ltd., an international investment banking firm.

In the filing, Muehler is identified as having made a $71,000 loan to AltaVista Capital Markets,
and as the company’s point of contact with the SEC. AltaVista’s address as listed in the filing
is the same 4050 Glencoe Avenue address in Marina Del Rey used by Muehler and his wife
Claudia Leite Muehler to incorporate two previous iterations of the Muehlers’ alternative
securities offering scheme, LA Investment Capital, LLC; and Alternative Securities
Market, LLC.

The proposed offering is structured as 15- and 30-year “fixed income mortgage notes”
yielding interest at Prime plus 8.5%, or about 12% at the time of the filing. Proceeds are
ostensibly to be invested in unspecified commercial and residential properties acquired and Steven J. Muehler

managed by AltaVista. Despite characterizing the securities as

“mortgage notes” they are not secured by any real estate assets –
AltaVista owns none – nor will they be secured by future property
acquisitions made with offering proceeds. The notes amount to
unsecured floating rate corporate debt to be issued by a company with
no operational history, no hard assets, no revenues, and no full-time
employees.

Eight months later the SEC has yet to qualify AltaVista’s offering.
AlphaBase, Growth Capitalist’s proprietary database of Reg A offerings,
lists the offering (https://www.growthcapitalist.com/ab_profile/kc_companies/?kc-
companies-cik=1665279) as abandoned.

But stranger than AltaVista’s pie-in-the-sky offering terms, is the date of

the initial filing: June 22, 2016. It was one day after the SEC announced a settlement with Steven Muehler in which he agreed to pay over
$400,000 in fines and restitution, and be permanently banned from the penny stock market, after months of settlement negotiations with the
agency.
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Born Out of ASMG Fraud

The SEC action against Muehler involved a scheme using two other companies he controlled, Alternative Securities Market Group
(ASMG) and Bluecoast Securities, which sought to collect upfront fees and stock from would-be Reg A issuers, despite holding no
securities licenses.

In the ASMG action, the SEC’s enforcement division alleged a pattern of deception and neglect repeatedly used by Muehler to defraud
companies seeking to raise capital. “To persuade small businesses to sign up for their services,” the agency said, “Respondents falsely
claim they have helped other small businesses raise millions of dollars from investors, and that they work with securities counsel to ensure
the offerings are lawful. They have also failed to disclose sanctions imposed against Muehler by state securities regulators for acting as an
unregistered broker-dealer and defrauding small business customers in past iterations of Muehler’s fraudulent scheme.”

The SEC said Muehler, through ASMG and Bluecoast, had signed more than fifty small businesses as customers, collected more than
$250,000 in fees, and acquired common stock from their customers as part of payment for their services. The agency said that after
receiving payment, Muehler would file offering statements with the Commission with “significant deficiencies” that “would not be
meaningfully addressed.” As the filings languished in the Commission’s review process, Muehler and his associates continued “to lull issuer
customers by assuring them that they are on the verge of qualifying under Regulation A and raising investor funds,” the SEC asserted.

Despite ostensibly shutting down ASMG and accepting an indefinite ban from the penny stock market, including a bar against “acting as a
promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or
trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock”, Muehler and a former associate
from ASMG have continued to solicit fees from companies seeking to issue stock in the Reg A market, according to offering documents
reviewed by Growth Capitalist, and interviews with executives at AltaVista and at companies which hired AltaVista to conduct their
offerings.

Flurry of Recent Filings

Several of the ASMG/AltaVista offerings are currently under review by the SEC – including five filed just in the past 45 days: ZipMesh, Tool
Floor, Northwest Trout Farms, StepOne Personal Health, and Broadcast 3DTV.

StepOne Personal Health, Broadcast 3DTV and SW Innovative Holdings were ASMG clients whose older, pre-ban offering circulars were
simultaneously terminated and replaced with new filings, excised of any references to Muehler or AltaVista. Each of the three companies’
offerings had been qualified by the agency prior to Muehler’s ban. Other than being scrubbed of any references to Muehler or Altavista, the
refiled offering documents are not materially different from the original ASMG-sponsored filings.

Three other companies with active Reg A offerings either list AltaVista as their “principal office” or are led by former executives of ASMG,
including AdvantaMeds Solutions USA Fund I, Samba Brazilian Gourmet Pizza, and Stock Market Bar & Grill. Two other companies,
StreamNet and North Lion Holding Corp., made their initial filings last August, after Muehler was banned.

StreamNet, SW Innovative and AdvantaMeds are currently qualified by the SEC to sell Reg A shares to the public.

‘Complete Dog’s Dinner’

All of the recently filed offerings, while careful to avoid referencing Muehler or AltaVista, employ the same filing template used by ASMG
and AltaVista Capital for their Reg A offerings, and are structured similarly as convertible debt with a similar schedule of conversion dates
and pricing. They also use the same wording – and omissions – in disclosing the expected offering costs and the securities advisers
involved in the offering. No information regarding the intermediaries involved is disclosed. The broker-dealer disclosure is listed as “TBD” or
left blank. A figure of $75,000 is consistently used as an estimate of “third party offering fees” or “total offering costs”. None of the filings
disclose an auditor or legal counsel.

Attorney Sara Hanks, a partner at crowdfinance law firm KHLK, reviewed the Tier 1 Reg A offering for Northwest Trout Farms and told
Growth Capitalist, “I see ‘Third Party Offering Fees’ listed as ‘Legal’ and $75,000 in legal fees on this one. That seems like a high price to
pay because there are a lot of problems with this filing. They are not just copying the format but also the content of other filings, some of
which is inconsistent and not applicable.

“I am being polite when I say inconsistent and not applicable,” Hanks added. “It consists of text copied from other filings, including standard
language written by KHLK. It misstates the law in many places, and does not comply with the requirements of Form 1-A. It’s a complete
dog’s dinner.”

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Website Goes Dark

When approached for comment on this story in mid-February, Muehler first refused to
respond. After a week in which AltaVista’s website (http://www.altavista-cap.com) was first
substantively edited to delete references to the company being a broker-dealer, a registered
investment adviser and a registered alternative trading system, and then the site’s
ownership information cloaked via the use of a third-party registrar, then finally taken offline
entirely, Muehler finally responded.

In an email to Growth Capitalist on Feb. 21, Muehler did not deny his involvement with
AltaVista Capital and its subsidiary companies, or his leading role in directing their activities.
He insisted that he had made efforts to help secure securities licenses with FINRA, and
investment adviser registration and the registration of an ATS with the SEC for AltaVista’s
various subsidiaries, going so far as to mention specific staff members at FINRA, the SEC
Sara Hanks, KHLK
and the California Department of Business Oversight that he was working with to secure
approvals.

Mueller admitted that the company had failed to secure the licenses, blaming the company’s president, Koorosh “Danny” Rahimi, for failing
to pass his Series 65 broker exam. Muehler said that Rahimi had left AltaVista “in February”, after failing to secure his securities license.
After that, “Appropriate changes were made . . . to operate without Mr. Rahimi’s involvement,” Muehler said.

Rahimi says he recently ceased working with Muehler and AltaVista. “Steve Muehler used me, used my
name and victimized me to get to what he wanted,” said Rahimi. “I've lived this long and there's no
blemish on me, on my licenses, yet for a year or so with him, he has probably ruined and damaged my life
beyond repair.”

Rahimi said that he had reported Muehler's continued involvement in securities offerings to the SEC.
Growth Capitalist confirmed that the SEC officials were aware of Muehler's ongoing activities in early
February. To date, no additional public actions have been taken by agency against Muehler, AltaVista or
its client companies with current Reg A offerings in the market.

Wednesday - Muehler's History of Unregistered Securities Scams

Koorosh "Danny" Rahimi

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