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If there are restatements, then you would/should get a PR explanation. Remember, the Auditors have yet to audit the total year 2009 as it is not complete.
I suspect that their is no difference between these Yahoo summaries and the numbers detailed in the 10Q for 3rd qtr
http://www.electronicgamecard.com/Investors/PressCenter/2009Releases/PressRelease091120.aspx
This is link to last 10Q PR from 10/20/09 when they amended the results to include basically a tax provision
It is not a press release, Done if you look at the News Post by Edgar Online Financial, but only clicks thru to the Yahoo Balance Sheet detail. Bizarre, but is NO change that I can see from what Yahoo financials have had all along.
Waiting for a IR Press Release for CC etc. That will be a well attended/listened to CC, Yvonne should plan for telephone call in overload.
Anyone claiming EGMI to be dead, better not poke it with a stick. LOL They will likely get bit.
Time will tell and the sooner the better.
While Lord Steinburg is not worrying about his holdings, remember that HIS ESTATE and heirs still have what perhaps is largest holding of EGMI. So people are attached to his shares with real lives and money on the line and voting power at the annual meeting.
In the longer run, this company is owned by the shareholders and if management is bickering, the stockholders can resolve those issues themselves thru voting---it would not surprize me that major holders are now working on how they plan to fix the problem after the SEC issues are finalized.
I am not sure of the actual nature of the conflict, but it is evident from Alan Davidson posts (Gurupup) that some conflicts existed. ALL I am saying is that having only FOUR people on a board makes gridlock more likely than having NINE.
As far as what the issue was ---makes no difference, THE INABILITY to move forward is the issue now. --and that has to fall on the the CEO / Co-chair which is Kevin as he is the guy wearing the biggest Hats in the company.
Well if they do golf together, I would suggest in the future they invite the accountants.
Not that I want them to be too cozy to lose their independence, but having a familiarity with the players can sometimes prove helpful in getting things done--like cash bank confirmations.
It would not surprize me that in the end, the CPAs recommend a minor adjustment here and there in the statements, so they get to save face ---as to just reinstate them as is (or should I say as they were) would likely result in a WTF was that all about response from shareholders. I would gladly take a no change reinstatement though.
Here is hoping for a prompt resolution to all this, whatever the outcome.
Thanks for digging that up Justhesolfacts, Interesting that the board of the company shown in the link, had a board of directors composing of NINE individuals. That is eventually what is needed for EGMI, Part of the problem is you currently have with LS dying only four members on the Board and that makes it easy for it to be evenly split Two against Two, and IMHO is exactly what happened in the last four months ---a stalemate.
Also noted that Zappulla was on the audit committee, just interesting, no other comment.
Nice Job Wicked Tomato, great to have you being sort of the IHUB ambassador to Yvonne during this troubling period. She gets one call every other day and we all get to share in the update. Appreciate it and glad to hear that she is upbeat---a very good sign given how hectic it must be for her being in the middle of the storm.
I agree Sam, and that alone should be very comforting and make us eagerly await the conference call. I do not want to see this trading without an SEC resolution and the CPAs reinstating an opinion (even with corrections).
The adjustments are likley to be minor, and remember this company had as of last statement had 18.3 Million in Current Assets. $16.2 million net of current liabilities That is at roughly 70MM shares is 23c a share. And that does not even include the Long Term Investments of $8 million. ( 35 cent with LT Assets) Remember NO Long Term Debt
Even with adjustments to cash and even with ignoring the Long Term investments, that WOULD put a floor in the value of this stock at 20 cent range- so this is why I am not ready to write this off to zero even if you have a large asset write down.
See for yourself with the LINK below.
http://finance.yahoo.com/q/bs?s=EGMI.OB
Take the last Net Book Value of 22 Million, write it down to 20 Million and unless this is not a going concern, which I believe it is a Going Concern, then you get 28 cents a share for book value discounted. SEE hard to believe that this goes to zero
okay you want a thread of good news.
Press Release Source: Electronic Game Card, Inc. On Wednesday February 24, 2010, 6:12 pm EST
IRVINE, Calif. and LONDON, Feb. 24 /PRNewswire-FirstCall/ -- Electronic Game Card, Inc. ("EGC") (OTC Bulletin Board:EGMI.ob - News), today announced that it has postponed its call scheduled for February 25, 2010 at 10:00 a.m. (ET) due to the suspension of trading of its common shares. Â The Company is working diligently with its independent auditor to address the situation and will update investors as soon as possible. Â
Re-read the last PR, If you believe Kevin, then the good news is they are working on it
I added the BOLD. So do not be so negative with theories as who is to blame etc. Wait for the CC which will result from diligently working to resolve the issue.
I also think it might be a calming exercise for you to list FACTs, not theories, in a PLUS and NEGATIVE COLUMN. After doing this you might not be as depressed.
SEC did not shut down the EGMI website. Website is likely to be down for updating. When last up the Investors section was outdated and did not show current news or SEC Filings.
That is what is it all about, SEC did not shut it down
Having cash or its equivalent in a Swiss Bank or off shore account is not a big deal with IRS or other taxing authorities, as long as they are disclosed and the income is properly reported. Look at Sch B in your own tax return, YOU every year answer questions about whether or not you have a foreign account or trust.
And another point is if you have Net Operating Losses, then what is the big deal, YOU Hide Income, NOT losses if you are trying to evade taxes. I know, maybe they had NOLs because they were hiding Income. ---I could understand that with an individual, but not a public company. Typically international companies do not hide income, but try to shift it to countries of origin with lower taxation.
I think like you indicated, it wound up being Swiss thru a series of bank closings/acquistions, reverse mergers etc and not set up that way from the beginning.
What you say makes sense and again adds credence to why the issue in the SEC and CPAs was limited to what seemed to be ONE cash account.
Having cash or its equivalent in a Swiss Bank or off shore account is not a big deal with IRS or other taxing authorities, as long as they are disclosed and the income is properly reported. Look at Sch B in your own tax return, YOU every year answer questions about whether or not you have a foreign account or trust.
And another point is if you have Net Operating Losses, then what is the big deal, YOU Hide Income, NOT losses if you are trying to evade taxes. I know, maybe they had NOLs because they were hiding Income. ---I could understand that with an individual, but not a public company. Typically international companies do not hide income, but try to shift it to countries of origin with lower taxation.
I think like you indicated, it would up being Swiss thru a series of bank closings/acquistions, reverse mergers etc and not set up that way from the beginning.
What you say makes sense and again adds credence to why the issue in the SEC and CPAs was limited to what seemed to be ONE cash account.
To Put the PO box executive offices in perspective, THE GOAL was to move the offices to Irving, CA from London. The Headquarters are still I understand in London, so if the move was not completely made or stalled, Having a UPS PO Box to have someone sign for mail makes sense, particularly when Kevin seemed to be traveling all the time.
pontiac Great Post--gives credence to optimism as opposed to panic. At least it might be in Switerland and not Greece.
Thanks for the digging
Everyone Chill, Thanks.
Not over til it is over and freaking out in the meantime will not change the outcome.
You have waited about half the halt time and now is a time for calm.
ambulance chasers lining up === even before the size of the issue is even determined. Predictable
earlier this week, I emailed Yvonne about the website IR section was not up to date on Press Releases or on the SEC section and I believe what is happening is the website is being updated, WHICH is a good sign as it says if the day to day operations are being taken care of then it is also likely that wheels are turning to take care of current SEC situation.
AND When I try to access I get the following which leads me to believe the update is in progress
The site you are trying to view does not currently have a default page. It may be in the process of being upgraded and configured.
Please try this site again later. If you still experience the problem, try contacting the Web site administrator.
My guess is you will first get an announcement of a new conference call. This time they will announce in essense a firm date. No cc will be announced without these issues having a resolution---whatever that may be.
After all the facts are out at the conference call, the SEC will probably then after the call announce a time for the opening of trading.
Problems resolved first, Conference call second, trading third.
That is my take on the order of things to come.
Hey Wicked Tomato---wish you would have kept that number to yourself, I now fear Yvonne (and she is one of the ones wearing a white hat as they say) will be overwhelmed.
Perhaps others on this board will refrain from calling her and you could take on the task of calling say every other day and get us a basic update. Probably will work better that way. Just a suggestion.
Have you ever tried to field hundreds of calls a day and get anything done??
Sam I will give you thumbs up on your post. My post although positive, has a lot of IFS and I did not put a timeframe on the PPS targets. I think those targets can be reached 6-12 months out as you are correct in the BAD TASTE and FOUL ODOR comment. Once bitten, twice shy is how it is sometimes phrased, or as I said in a prior Post, sort of like Tiger Woods, will take more than talk to get back in good graces.
I await the CC whenever that might be, and my advice to management is to be honest and if mea culps are in order, do so upfront, and lay out the vision for the future in such a way that you build credibility.
Interesting Tweet On Twitter from JDPennystocks
as follows:
EGMI trading suspended. Follow story. Could be opportunity when trading resumes depending on facts...
So this means many are watching this story as it unfolds. I do not think all is lost or that EGMI is toast or any other food product for that matter. Management, however, has been acting like a bunch of wienies if you have to have a food reference to post.
Whatever the story, first issue is to get the CPA opinion restated, with or without adjustments. Then as said before, management has to do the housekeeping and basics to get those issues behind. Focus on the business plan. That alone will get you over $1 to $1.50 range. Since we are into guessimates, add any reasonable number to Chinalot that would be incremental to 2010 over $2 is plausible.
Here is to a good CC Thursday, which if held and not postponed probably means the SEC issue will be behind us and trading soon thereafter.
thanks for the update wicked tomato. Any information is better than none. You can be assured Yvonne is earning her keep this week.
And if we are not left at the altar on Thursday, we will see if EGMI Management earns their keep as well
you will find those numbers on the cirq.com website
but Yvonne Zappulla is 212 681-4108
She is IR Person at Grannus Financial in NYC
Looks to me that the cirq.com webpage is being worked on, but the electronicgamecard.com URL works.
I agree with you Sam that the Investment portion is not the issue with the SEC. Just trying to answering a question posted on the board here. The problem with EGMI Stock is management --at this point it is my opinion that the core business (since most of it is contracts B2B and alot done thru sales partners) is not currently a problem.
What is needed is some indication that Management is ready to be focused and working like a team to go forward and execute their business plan. Remember Lee Cole came back from China, gotta be a report on the results of that trip.
What is so painful is the drop in PPS is predominately due to anxiety over management just doing the mundane back of the house issues, like communications, proxies, annual meetings, dealing with CPAs, appointing board members, getting a CFO, JUST THINGS that most would think are Business 101. Would be interesting to get the back story on the inside struggle/politics that resulted in the situation. Kevin being the CEO and Co-Chair, obviously is the one that will be getting the most of the blame as he is title wise the captain of the ship.
Well in theory if the investments were written down by lets say 7 million, that with approx. 70 million shares affects the value per share by 10 cents, however, that does not account for any discount that would arise in the market for the lack of credibility. Again, communications is key from management to bolster credibility.
Just using round numbers above to make the point.
I believe that the CC for Thursday is still scheduled to be on. I almost hate to ask though. History tells us that Mgt is willing "to leave the bride at the altar" and cancel on the morning of the call. So I will work under the assumption that the call is on.
The CC will have lots of questions to answer, and first off not of much use if they have not resolved the basics issues behind the recent SEC Action and the CPAs withdrawing the opinion on 2006 thru 2008.
I think they can resolve those issues by then, but only if they are taking the issues seriously---more seriously than the complaining of stockholders over lack of communications over the last month or so.
In addition to the basic issues (SEC / CPAs) you have all kinds of information needed to be given, confirmation of 2009 Guidance, some guidance on 2010, Proxy, Annual meeting, on and on and on. If held should be one CC to not miss.
In answer to your question about when trading will resume. Ideally, EGMI Management takes these festering issues as a top priority and have them all resolved by the time of the Thursday Conference Call. So the conference call then becomes one of resolution of issues and rebuilding of confidence. Giving the market time to asborb the conference call and issues (Fri and over the weekend), I would prefer that EGMI ask the SEC to resume trading earlier on Monday March 1st rather than awaiting the March 4th date in the original SEC Order.
That is what I would hope the results will be, but all is out my hands --hopefully management has their act together, surely more than just stockholders are asking them to prove it now.
8-K will be revised/amended per response from IR
From Yvonne
I was told in email that the 8k will be refiled with all the typoes corrected. I did pass your email along to the Board this morning to make certain they were aware that it needed to be corrected. Best, Yvonne
yes the February 12, 2009 date is a typo and should be 2010. I have emailed Yvonne and suggested they issue an amended/corrected 8-K to clarify as to not do so is creating confusion and doubt. --and an 8-K should provide clarity instead. I think you will see this amended in the next day or so. If I get a response from IR I will post here the response
If this is just a big mistake and the statements are just fine. I know hard to believe that this is just Big Boys playing and getting in a spat and firing off 8-Ks and SEC documents because Management does not play well with others.
I sort of think this is like Lord Steinburg was the playground monitor and when he died, the boys starting taunting each other and pulling the little girls pigtails. Oh well. sad to say but likely a good analogy
So then if the financials are okay, lets say, and now the issue is incompetence of management. I think the incompetence factor has already been priced in, but also priced in is getting a new team on board (Full Board, CFO, CBO and new CEO). So in my mind further PPS erosion could happen if the basic management issues are not resolved. How much, is anyone's guess, but without a Great CC on Thursday, the stampede to sell from just an I AM OUTTA HERE syndrome will be at least 20%. If basic business model is intact and EPS guidance for 2010 is given with credibility then likely to dip and then recover based on performance. Silence for these oh so many months puts EGMI in a similiar Situation as Tiger Woods, Saying your sorry is not enough, actions will over the balance of 2010 and results will be the true contrition needed.
By the way, what gurupup says makes absolutely the most sense to me. HEY I have a local bank here that in the last five years has changed their name from let me think, at least three times and currently is now operating with TWO Logos , the old one with a logo ontop of the new parent company. One of the changes resulted in not only a name change, but to be compatible with the new company ALL New account numbers. So if the auditor was doing this off site (likely) from Old workpapers, easily he could get a NO SHOW Response. And if management was non-communicative either to arrogance, distance, or availabilty, it could easily freak out an auditor.
Oh well I bet we will soon find out as The Hammer has been used to RING THE BELL to get their attention.
Regarding narrowing it down for 06, 07, 08 and I assume having a correct balance for 09 NOW that puzzles me as to why they would go back that far. The only thing I can think of I posted before, when they said, an account represented to be EGMIs. I said in prior post, maybe the account was an old account and the auditor has issues with whether or not the confirmed account legally was tied to EGMI.
Anyway, was just on Ian's site looking at comments and I saw a comment from GURUPUP which is pretty much along the same lines. Hoping he will not mind me cross posting it here, his comment was as follows:
This is what I think I know, or believe at this moment to be true. There is a account which holds funds of EGMI’s in Europe, and that bank was acquired. When the auditor went to confirm the funds he did not find the account, because the bank had changed names. Don’t know how smart this auditor is, but supposedly all of the correct info will be given to the auditor on Monday-Tuesday and I hope he then reinstates his confirmation of funds, and in turn EGMI gives all of this stuff to the SEC and business goes on. In that time frame, I look for management to be changed, I hope the CEO get his ass kicked along with another director, as they do not care about their shareholders and deserves to be fired. Their actions have been criminal in my opinion, that is in the way they treat shareholders.
The chap in London that is responsible for ALL of the business takes over, and brings in new directors, a shareholder representative, a new CFO, adds new business and business goes on in the way we originally thought for the most part.
One of the things that no one has been taking into consideration is the fact that Lord Steinberg, deceased, was buying stock for the last year and a half, and was the largest shareholder, and had access to the books and bank accounts, why would he buy the stock continually if he was not satisfied about the financial info?
What has happened here has never happened to my knowledge in 46 years, and is all the blame of two chaps in the company and one other director.
The tax loss carryforward was an issue brought up with the 2009 3rd qtr results and the statements were restated quickly. Not a problem, but perhaps difficult to determine on an interim basis, as I would suppose that the tax losses would only be useable against income in the country to which the loss occurred. That is a guess as remember this is an international company with offices in more than one country. So perhaps losses in UK can not be used to offset losses in USA. Anyway, the NOLs are difficult to determine until the tax returns are actually filed, so interim allocations are estimates.
I am fairly confident the money is there. You might have differences due to currency loss translations, so the value on the books in USD might not match the value in Pounds or what ever denomination the account is in.
If it is not there, finding the culprit is normally not too difficult in forensic accounting. My problem is if you have a defalcation/theft, well that typically is a one time event. BUT if you have incompetence, well that lasts until you change the management.
In either case, ultimately the stockholders OWN the company and I have long said, about 80 large stockholders probably own about 80% of the company and if management does not want to act and communicate, the stockholders can elect a board that will find a management that will.
If answers do not come quickly, I envision Gurupup inviting us to Las Vegas to gather proxies for the annual meeting.
I do not think you have a whistleblower here, Look at the timing of this, It is just around the time the Auditors would be crawling all over the books to get the year end results ready for an opinion. So perhaps the management power struggle resulted in Management not being very responsive or attentive to auditor questions ----no resolution over a length of time and the auditors lay out an ultimatum to get it resolved. Miss a deadline for confirmation set by the auditors and you might have just wound up with the BIG Hammer from them.
DO We have your attention NOW, EGMI Management? Bet the SEC/CPAs have Kevin/Mgt's attention now and they should respond quickly. Sometimes it just takes a hammer to do the job.
What is the old joke, YOU only need three things in a toolbox.
WD-40, Duct tape and a Hammer. If it doesn't move and you want it to USE WD-40. If it moves and you do not want it to then use DUCT TAPE, If all else fails use the HAMMER.
Stockgod blog post on this mess
http://www.bullsonwallstreet.com/blog/post/EGMITooGoodtobeTrue.aspx
also Ian did a writeup http://iancassel.com/2010/02/21/electronic-game-card-egmi-from-stockholder-to-stuckholder/
GLTA we will need it, but this week and CC (hopefully) still on will tell if management has the right stuff as they say.
I think the cash is there, but surely Management could have handled this much better.
Looking at a prior 8-K it is clear we do have an interim CFO, however, The contract that he works under expires March 2nd, 2010---so I would look for the company to announce an extension to that contract or to announce a new CF0.
From the 8-K which you can find on the EGMI website
dated November 3rd, some of which I have copied below BOLD added.
Effective on October 21, 2009, Thomas E. Schiff resigned from his positions as Chief Financial Officer and company Secretary of Electronic Game Card, Inc ("EGC") because EGC did not have all effective insurance cover required by the terms of his employment agreement. EGC agrees that cover was not in effect, but has since secured that cover and additional business insurance. Mr. Schiff did not cite any disagreement relating the EGC's operations, policies or practices in his resignation. Mr. Schiff, however, continues to provide his services to EGC pursuant to a consulting agreement entered into as of October 22, 2009. Linden J. Boyne, who recently retired as Chief Financial Officer and company Secretary of EGC, was appointed interim Chief Financial Officer and company Secretary effective October 30, 2009. Mr. Boyne is employed by Sterling FCS Limited, who have been contracted to supply various financial function and company secretarial function services to EGC since 2006 pursuant to a contract scheduled to expire on March 2, 2010.
Thanks GURUPUP, that answers alot. At least drinking in Las Vegas is cheaper than NYC.
Infact given your explanation, This might be a good thing to have a trading halt, so the stock does not trade until this clears up, the CC is held and the worst fears put to rest.
I now believe that it is possible that after that happens, we could gap up and not down. ---or at least I can hope. Pour me another one, JOE.
M&B advised EGCI that it had become aware of irregularities in the audit confirmation of a bank account represented to M&B as having been held by Electronic Game Card (UK) Limited (“EGC Ltd”), a wholly owned subsidiary of EGCI that conducts its European operations. Based upon M&B's investigation and inability to confirm the balances in the account, M&B concluded that its prior audits could no longer be relied upon and that it was withdrawing its audit opinions related to EGCI’s financial statements for the years ended December 31, 2006, 2007 and 2008 as of February 12, 2010
The above taken directly from the 8-K should presents alot of possibilities. Irregularities in the audit confirmation, THAT could be the account number on the confirmation was wrong or incorrect ie account number transposed providing doubt that the balance confirmed was correct. Just one possibility. Or could be that the confirmation was mailed back to the company and not directly to the auditors-that would be irregular or out of the norm.
I like the wording==== an account represented -----having been held by EGC UK, that could mean the account title did not match to the company. IE could have been an old account using a old company name that gave the auditors pause as to the real legal owner, etc.
Inability to confirm. DOES NOT mean the balance on the books are wrong or that there was a thief of funds/misuse. Lots of reasons for this, but should be easy to solve.
JUST LIKE any paragraph of words, open to intrepretation and ONLY helpful if you can have a PRESS CONFERENCE for clarification. LOOKING FORWARD TO IT