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Fire the CFO? Regretably, I am not in the position to make this happen. Only JP is. One must question how it is possible that he also has such little working knowledge of accounting that the flaws in the financial statements were not obvious to him also.
Sir,
And the benefit to registering my shares on this board is?
Check out the website and then tell me who the CFO is.
http://www.cyberkeycorp.com/investor_relations.html
And you know this for a fact or are you simply assuming this to be the case? You full well know that the company is cash flow positive? You fully well know that the current and proposed marketing and new product development efforts are either cash generating or cash flow neutral for the coming year or two?
And if you know these facts, how, may I ask, did you learn of these facts?
I think you see his picture every time you sign on to this board. And I think you know that.
One does not invest and relax. An investor must constantly assess the state of his/her investment and be prepared to take action as conditions change.
As for asking the CFO, just how do you suggest one pose the question 'Is it possible that you issued financials that a first semester accounting student might expect to see on a test with the question above it stating 'Identify at least 6 mistakes on the following financial statements'?'
This company has a CFO. That is an OFFICER level position. He's not a bookkeeper. He's not a grunt. He's a Chief Financial Officer and a Director. He doesn't need to be a CPA, but he does need to understand that a financial PR must meet certain standards. It's what being a CFO means.
If the company requires continued external funding, and this gray sheet condition persists much longer, this little screw-up with the SEC could result in delayed marketing and product roll-out announcements, a possible downsizing to conserve cash, or even a period of dormancy in which no cash consuming activities are pursued. This is not trivial.
I might also ask how a competent CFO could allow the company CEO to attest to financials that indicate huge profits, retained earnings (indicative of no tax loss carryforward) and zero federal tax liability?
The SEC is not the company's godfather. They don't come along and tell the company to change this and change that. They are lawyers. A company is free to do as it pleases until stopped by a criminal or civil action.
There's a very good chance that the SEC never looked into the shares outstanding issue. They are not auditors. If, and when, the audit is released, the sales outstanding will be available for all to see. If that results in lawsuits or a bunch of people screaming 'I told you so' is subject only for conjecture. We know nothing conclusive about either short sales or dilution. Clearly, the SEC doesn't seem to have a problem with short sales. That's unfortunate. But unless noted, they never asked about CKYS's share structure. The truth may never be known.
Absolutely correct. Call the transfer agent and they will tell you the exact amount of shares they know to be out. Chances are very good that the company's number is the transfer agent's number. If it isn't then someone better find out why.
Transfer agents don't deal in 'about' kind of numbers. They deal in numbers down to the share. Either the number is 700 million or it isn't. If it's 701, then 700 is fine with me for PR purposes. 850 to 900+ is not fine with me.
We'll know when the AF's come out. If they come out.
LoanStew - thanks for the kind words. I find the use of the deletion option far more prevalent than it should be. My understanding of the intention behind a stock related chat board is to consider past, present, and future events concerning the company, it's prioducts, management, strategy, financings, etc. I didn't note the caveat that all things must be phrased to support the existing company position until such time as the company is either defunct or the President made a ward of the state.
This company has made some mistakes, or possibly just suffered some miscommunication. Don't take my word for it - take the SEC's word for it. In my opinion, the mistakes that the SEC noted made were A) obvious, B) completely avoidable, and C) indicative of more serious problems. But as long as CKYS is an investment and not a living creature, I will treat it as an investment in which money (and that's why I'm here) can be made or lost in predicting what the company will do and how it's strategy is likely to fare.
That's my take and I'm sticking to it.
'Iceman's wife?' lol
Sandan - You speak as if you have proof positive that A) there is a huge shorting network and B) it is this network which actively lobbied the SEC to use the UAF's as an excuse to suspend trading in the stock. Aditionally, if one follows your logic stream, one should assume that the UAF's are infact correct as stated. If such proof exists, I, along with everyone else, would like to know where it is.
Barring unproven conspiracy theories, the facts are plain and simple. The company posted unaudited financial results, which they were not required to do, that to an intelligent and trained investor, appear to have numerous discrepancies when compared to the previous financial release from the company. Both releases were personally authorized and attested as truthful and in the best knowledge of the company by the company President and Chairman.
Apparently, the lawyers and accountants at the SEC have determined that some of the accounting items appear curious enough as to warrant a complete trading suspension. The SEC cannot go farther without filing criminal charges, which they rarely do. Instead, they let the civil lawyers do much of the work for them. And I believe you will see that happen in fairly short order if what I suspect is going to happen over the next few weeks plays out as anticipated.
Gambler - Absolutely correct. I know for a fact that Communications World never published a single article about MCI, WorldCom, or Global Crossing in all their years of publication. They are all knowing and all wise in their independent assessment of who is legit and who isn't.
Excellent point.
Would you risk your career on a stock being watched like a hawk by the goverment if you didn't have the absolute backing of a licensed, bonded, and competely at risk accountant verifying that every word is 100% verified?
Do the words 'plausible denyability' mean anything?
If I loan you a million dollars based on a CPA's guarantee that you are legit and the collateral is exactly as you say it is, I'm covered whether you default or not. I did everything a rational person could do to seek out the facts.
Without the AF, this think is greyer than a battleship.
It is your thinking 'outside' the box that permits you to have such a skewed view of the world.
There are pink sheet companies out there who do play it by the book. Very much so. They know where they are going and will not allow problems of their own doing to sidetrack them. EYTL is one such company. Squeaky clean.
The SEC, as flawed as it may be, was FORCED to take action in this case once the UAF's came out. It would be no different than a CEO coming out with an announcement that his company had been offered a buy out for almost twice the price and then provided no other details. And all the while, it may well be that he took the opportunity to sell massive amounts of shares in the market frenzy following the announcement.
We don't know all the details. And I'd guess the SEC didn't know them all either when they shut this thing down. But you can be sure some auditor and attorney are going to know almost everything there is to know about this company before it gets back to the pinks.
Disagreeable? Unlikeable? I was unaware that these were traits that investors and business analysts should shy away from. Instead, I suppose I should just get along to go along while the company I have invested my hard earned money in goes about torpedoing itself in front of the entire world for no other reason that management arrogance, stupidity or incompetence.
Sorry if I don't fit the mold of nice guy. I get very testy when I watch others screw up the simplest of managerial tasks.
If, and that's a huge if, a 211c was filed on 2/20/07, you have to figure at least a month or two for approval. There isno way the NASD rubber stamps an approval on a stock the SEC just suspended. Think again. Maybe this goes 5 rounds of detailed questions at a week to two weeks per round. And that's only after the AF's are issued.
Hint, if the AF's were almost done as was reported a few weeks ago, how could the UAF' look as they did? Answer, they couldn't. It' going to be a long process. Don't hold your breath.
Got it now. Thanks, Seabiscuit. So there's a massive conspiracy, which is blatantly obvious, that certain people or companies are aligned to induce the SEC to attempt to sabotage CKYS's drive towards profitability and everlasting happiness. And it's possible, though yet unproven, that these agent provacateurs are concerned about CyberKey's patents. But in any case, they were likely to strike paydirt under any circumstances because almost all pink sheet companies play fast and loose with the rules.
Is that the simple syntax you have for me?
You're a loon. JP put out financials, and signed his name to them, that showed a book value doubling in the last six months on a small increase in sales. He issued numbers, which he did not need to do, that showed a massive increase in historical profitability without any justification for where the numbers came from. His website noted an increase in shares outstanding with no corresponding increase in capital stock outstanding. And to compound the problem, additional paid in capital actually declined while reported shares increased by 250,000,000 shares.
In simple systax, the SEC halted trading because someone issued numbers that a freshman accounting student would instantly recognize as absurd. Yet the company has someone they call a COO and CFO. Tell me, how can one be a CFO if one cannot do the most basic of accounting? And how can one be CEO if one cannot recognize that his people haven't got a clue as to what they are doing?
There's your syntax for you. Spit in the face of the SEC long enough and eventually even they will take action. Just wait until the civil lawyers get their teeth into this.
Was this your understanding about the patents? I could be wrong, but I always remember reading about patents in the past tense, as in they already exist. My understanding was that the patents had already been awarded and were in effect. To find out that this is not the case is very disconcerting.
It could make one wonder what else is provisional and not yet signed, sealed, and delivered.
If there was ever a wonder as to why the SEC stopped trading, none need exist now. Even facts are now subject to revision. At least that's my recollection.
And you base your optimism in the future on what?
The future may have been bright and rosy three weeks ago, but do you know enough about what is likely to happen as a result of this SEC suspension to just assume it away?
I thought not. You have no clue and neither does the other poster who fails to understand the range of ramifications that may result from this suspension of trading. This isn't a minor deal. For a company starting at the bottom (the pinks), this is very serious. The world that the mm's operate in is not the fast and loose world of 2004 and prior. Things are different now.
Growth, especially for small companies typically requires cash infusions. This is exactly the reason why companies go public - so that they can sell stock to raise capital. If CYKS no longer has access to outside capital for an extended period of time, can it continue to grow? Can it continue to spend money on new product development? Will the company's existing efforts be enough to create a cash flow positive condition?
These are the important issues. Simple 'Growth' is not an answer. The devil is in the details.
I just love this Pollyana attitude that only positive news should be posted, that the losses that CKYS's shareholders are likely to suffer as a result of management's actions, and that everyone who points out the fact that even marginaly competent managers would not find them selves in this situation is a basher.
The situation the company is now faced with was entirely avoidable. Explain something to me - the company claims to have over $700,000 in the bank and yet it does not hire an accountant to prepare its financial statements. The same company sends gobs of money with an IR firm that is staffed with lawyers and maybe a CPA or two, and yet something is released that is so obviously out of line that the SEC suspends trading.
Wake up. This may not be fatal for CKYS, but then again, it may be nearly fatal for the value of your shares. What if the company can no longer raise funds on the market for 6 to 12 months? Can it continue to exist? What is the burn rate with all those people now on staff? Where is the next $25 million contract coming from?
As a shareholder, these should be your concerns. My opinion or that of any other poster should not matter.
Whether I believe politicians or enjoy kicking small dogs is of no consequence. If you or anyone else could not tell that something was very wrong when the UAF's came out, then this suspension is the wake up call that was very much needed.
Regretfully, I was preparing to dump at 2.0 cents on Monday but as you know, we never got there. Now, I doubt we ever will. Looks like next April 15th is when I'll be seeing the last benefits of owning these shares.
Then again, there's always the inevitable class action lawsuit. Should be a great show. Let's see who winds up owning the company when this one is done. I'm betting several people we now call management are gone within the next 30 to 60 days.
Can you say 'time to lawyer-up?'
I will willingly tell you that I have roughly 140,000 shares, but again, I question that if you now know that just those who post own more than 110% of the reported float, do you believe the company numbers or the posters? Did you add the shares you believe Smallcapengine to own? Did you add the shares you believe Big Apple may own that are not restricted?
Are you beginning to believe the dilution story or are you, along with the others, going to stick with the naked shorting myth?
CYKS is in the situation it is in due to either arogance, stupidity, or incompetence. Take your pick and assign blame where it belongs.
If you already have 216 million from just the posters who have chosen to respond, how can you have any faith in the 200 million float reported by the company or the 700 million reported outstanding from the same source?
'I, for one, am taking this sec stuff V E R Y SERIOUSLY!
JP is the man, our leader, the captain of the CKYS ship. Everything is up to him.
All I want is the truth. We will find out soon if JP is gold or $hit.'
If we've reached the point where the stock has been suspended, the grey sheets are pending and a massive sell off is likely next week, how ignorant does one have to be to not know the answer?
It's more than misleading accounting. It's a company management that announces to the world that the 2006 audit is done a week or so before the year end unaudited numbers come out. And when they appear, they look like something from a junior high remedial business class term paper.
You simply cannot claim that the audit is done and issue garbage like this a week later. Again, it's either arrogance, stupidity or incompetence. Take your pick.
I think you hit the nail on the head. The UAF's , IMO, were the last straw as far as the SEC was concerned. The numbers JP issued look like something put together by a junior high school business class project. The inconsistencies and outright unexplainable numbers lead one to question everything that has been PR'd in the past.
You really have to question the judgement of a management that claims to have over $700,000 in the bank and yet fails to spend a few hundred dollars to have a real accountant put together the company's year end financial statements. Is it arrogance, stupidity, or just incompetence? You make the call. I've made my decision.
If one assumes that the grey sheets are next, and if one assumes the shares open highly depressed, and if one assumes that the SEC suspension was a direct result of something that company management either willfully did or failed to do when asked, then one can assume that a CLASS ACTION LAWSUIT is likely to follow.
Should be interesting.
I think I'd be a bit more concerned with what these two alleged 'bashers' are saying rather than why they are saying it and why they are here. So far, I haven't read anything that looks out of line.
The bottom line is this investment we've made looks very shakey, at best. Hope isn't a plan. Only answers about the situation that exists today and exactly what managenment plans to do to salvage the stock should matter.
Stay focused. Stay on topic.
If it's true that CKYS will need another MM to step up and risk signing away his/her career in backing the company with a new 211c filing, and given the fact that CKYS is now on the SEC most watched list, there is no way that this goes back to the pinks without a complete set of audited financials at a base minimum. One has to question what other goodies a MM will want to put his career on the line after a suspension.
In reading the posts for the last few hours, I see someone confirmed that our auditor was paid a retainer just the other day. This would appear to be directly contrary to management's claim that 2006 and 205 are virtually done and 2004 is in process. But perhaps I read the post wrong and the money was given long ago and the poster found out about it last Friday but inadvertantly told no one until the following Tuesday. I suppose it could happen.
Then again, I suppose one could find $12+ million in retained earnings on a year end balance sheet that wasn't there 6 months prior.
You don't think the appearance of $12+ million in retained earnings on the year-end financial statements that wasn't there on the June statement had something to do with this, do you? The company's book value zoomed from the June financials to the year end with no comment on where this crush of money came from.
It also didn't help to see some new line item categories unique to CKYS's style of accounting show up in the Owner's Equity section. If I remember correctly, it was 'Stock Sold' or something like that. Pray tell, just what does that mean? I understand capital stock and additional paid in capital. But what does this new line item mean?
Think the government took a look at this?
No, we're not a bunch of late-to-the-party bashers. We're share holders who recognize that there may be a market for what the company has to offer. But it's certainly not clear that the path to long term viability is well defined. This company has a chance of succeeding, but it's going to require some astute management to make that happen.
Ask yourself if astute management and trading halt go together.
What helping hand would you like? It's not in your hands and it's not in mine. This ball is now in the hands of company management, their attorneys, and the US Government.
I suppose you could question the actions taken and judgements made by the key players in this drama, but why be critical? Doesn't almost every company have their stock halted at some time under the same suspicions?
Don't answer that. It's a rhetorical question.
I just want to thank the majority of posters on this board here for some of the most entertaining and amusing reading I've done in years. This place is like the Superman comics Bizzaro world where trading halts are good and the distinct possibility that a government agency believes investors are being mislead is treated as a positive development.
Keep up the good work. I'm looking forward to tomorrow's activity. And don't forget to grab your big heaping glass of kool-aid as you leave the building.
Dickmo
Mr. Accountant - can you offer me a definition or two?
What is 'Sale of Stock' as listed in the Owner's Equity portion of the Balance Sheet and how is it different than Additional Paid in Capital and Capital Stock? I've never seen this term used before.
And where does one normally find patents listed on the blance sheet and how are they shown, market value or cost?
Thanks
Let's clear up a few issues.
1. The Smallcapengine video was shot about a week and a half ago. It will be out next week. There is a ton of footage to edit through and the smallcapengine technical people are booked with other videos too.
2. Smallcapengine is based in Michigan, not Florida. One of the managers lives in South Florida, but all the offices and other personnel are Michigan (Detroit area) based.
3. If the Chinese or anyone wanted a few dozen samples to attempt to reverse engineer the product, all they need to do is buy a dozen or two and have at it. It's the same for cell phones, pharmaceuticals, or almost anything covered by a patent. Patents are as effective as the Maginot line in stopping a determined and technically competent technical group from reverse engineering. The Russians, and our NSA and CIA did it for decades. Now many Asian countries do it also. No law can put that genie back in the bottle. If it can be done, eventually, it will be done.
Jim has another video coming out soon. Smallcapengine.com is advertising on its site that they will have a video about Cyberkey Solutions in the next week or two. I've seen the previous smallcapengine videos. They tend to focus on products, markets, and people. They usually provide a tour of the facilities while talking with the key employees.
I'm looking forward to getting a glimse of who's working there and where the company is going in the next few years.
RedCloudPaint - I noticed your post the other day on efforts that Jim might consider to thwart naked shorting. As a penny stock investor for a few years now, I've seen name changes, stock dividends, stock buybacks, warrants, certificate pulling and stock splits used by others. I have witnessed each and every tactic fail in the face of determined shorters.
The only tactic I can image succeeding is audited financials and a determined effort to buy back shares accompanied by regular public announcements of the number of shares outstanding. CKYS may have the luxury of following this strategy, assuming that they are now cash flow positive. But what can companies who are still cash flow negative and needing to sell equity do?
As a prospective penny stock director (if and when we ever get public), what are Jim's options and what are the probabilities of their success? You never know when you might need this information. Thanks.
When was the last time you asked the same question of any interviewer on any company paid video? Hank is no energy expert, nor is he an auditor. The simple intent was to show that A) properties and wells really do exist, B) progress is being made, and C) the company is in knowledgeable hands.
You can argue that some questions that could have been answered remain unaddressed. That's fair. But I've seen all too many CEO interviews in which I've heard nothing new, seen nothing new, and therefore, learned nothing new. In other words, a complete waste of digital film and my 12 minutes to watch it. I came away from this video with some questions, but a more comfortable feeling that the company is real and so is their progress.
It's a long way from now until the audit numbers are presented, but I now have a better feeling as to why the audit is taking so long. They are dealing with hundreds of wells, dozens of leases, and who knows how many original mineral rights owners. Each one has to be verified to complete the audit. Then, the auditors have to look at the lawsuit that was filed and make an assessment as to who is right, who is wrong, and what, if any, it's likely to cost to someday resolve this legal situation.
I believe that when the numbers are presented, it will be a lot easier to determine the real value of the company. At roughly 40 cents/share, my guess is that the stock is undervalued. We'll all know better once we get the numbers and the auditors' OK.
The video was shot on or about October 15, 2006. Everything that RM has to say on that film is as current as you can get.
I have spoken to the people at Smallcapengine about running a follow-up Q&A with RM as I believe there are still some areas that could use a bit more enlightenment. If people think it's a good idea, and have some questions they'd like considered for the Q&A, the tattoo'd guy who runs the place is Hank. Send him an e-mail via the Contact Us tab on the smallcapengine site.
Nice animation, really shows the CKYS product line in a nutshell.
I expressed almost the exact same sentiments on the RB board earlier in the week. I feel quite comfortable that management fully understands that the concerns you have noted are, in fact, the very same areas that management has been working on. It should be clear to anyone who has followed this company that it needs to complete the KSI deal and it needs to find a funding source that doesn't involve more dilution. Solve those two open issues, and the future becomes very bright.
I don't know which comes first, the KSI deal or the money, but surely one will lead to the other. KSI offers assets, cash flow, and contracts to be used as lending collateral. And if someone will offer ACHI financing, even a bridge loan, they will have the funding necessary to complete the KSI transaction.
The combination of KSI and ACHI seems to work for both parties. It's a logical pairing. I believe it will happen, soon. There's too many smart people working on this to give up. ACHI at 2.75 cents is a steal.