Checking Giuliani's Ties

Ecosphere Technologies (ESPH Quote - Cramer on ESPH - Stock Picks) of Stuart, Fla., embodies the type of speculative names represented by Giuliani Partners.

On Feb. 1, Ecosphere filed a prospectus pertaining to the sale of up to 30.87 million shares of its stock by shareholders who are converting notes and debentures previously acquired via private placements. If all shares in the so-called PIPE transaction -- short for private investment in public equity -- are sold, the offering would increase the company's outstanding float by 55%, a massively dilutive proposition.

That's especially so for a money-losing penny stock firm like Ecosphere, which was known as UltraStrip Systems (and trading with the symbol USTP) until August. That name reflected its primary business as a developer of robotic technologies used to remove paint and other adhesives from boats, autos and airplanes, for which the company has 10 U.S. patents.

Ecosphere has applied for three patents related to its "water filtration system that has been designed, tested and verified to meet the critical water requirements for the military, homeland security, and natural disaster relief domestically and worldwide," according to a company press release. This technology was "tested and verified by the U.S. EPA to decontaminate a water system compromised by a terrorist attack."

Thus with the magic terms 'homeland security' and 'terrorist attack' does Ecosphere (nee UltraStrip) fit perfectly into the intersection where Giuliani Partners and its founder and CEO seek to position themselves.

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