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when doing a confirmation, the company authorizes the bank to release / confirm information directly to the auditors.
So the letter is done by the company, handed to the auditors, the auditors send the request to the bank with an envelope (or I assume in todays age some electronic means) that is mailed directly to the AUDITORS so they can independently confirm the balance as a certain date. The company has to authorize the release of the information due to privacy issues and typically does so with a letter that includes, "as a function of the audit of balances by our authorized Certified Public Accountants, XYZ company, we request you confirm directly with them the following information" or something to that effect
Obviously that is the banks balance and has to be reconciled to the books, just like you do with your own bank accounts. They can and typically request copies directly from the bank of the statements as well. so that they match to the reconciled ones the Treasurer for the company has. KEY thing is the person that authorizes the payments CAN NOT be the same person reconciling the bank statements, Separation of duties add internal controls that help (not eliminate) to make defalcations (BIG word for stealing) more difficult by requiring two or more people to cover the tracks/ Other internal controls would include two signature checks, or checks that are printed NOT GOOD for over a certain amount. Banks also can be given instructions to get extra confirmation for electronic transfers etc. On and on, just depends how complex the company wants to make it.
Just remember I have not audited a companies books now for several decades. so with time, somethings might change, but the basics typically are the same.
You know how it goes, If Timothy Geither does it IT is an oversight. YOU and I do it, it is a major F**K up.
Just another one of Kevin's oversights I suppose----you know it is Funny, Kevin joined the company Feb 1st 2009 so this bank account was no problem until 11 days after he joined????? Impossible, Has to be a typo. Also Like how this now goes back to 2006, 2007 and 2008 statements, seems like a CYA situation.
///////////LOOK for a revised 8-K Where do we send the proof reading bill. LOL Maybe they can pay us out of the UK Account. That way we can do the ultimate confirmation, wait 10 days and see if the check bounces
The 8K is dated February 12th, 2010 so I am sure that Kevin filed this with the February 12th, 2009 date as a typo ---could not have been a year earlier.
JUST LIKE THE ERROR in the following
Kevin Donovan, the Chief Executive Officer of ECCI, has discussed all matters described above with M&B, and has provided a copy of this Form 8-K to M&B.
Written in Haste, not proof read as should be EGMI, so I have no idea who wrote the 8K but Kevin did not proof read it and just signed it. Does not surprize me after seeing the last Proxy which also had lots of errors
From the 8K
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,
I added the bold above, which to me Indicates this is ONE, albeit could be a large account, Account that is in question.
So resolving the issues on ONE bank account is an easy scope of work that I feel should be easy to do.
NOTE THEY are not saying the funds are not there, just that they can not confirm it, for whatever reason.
I used to do auditing so I find it difficult that an auditor would not be able to confirm cash. Hell, that is the part of an audit that is so simple, they let the young guys cut their teeth on it. Confirmation of balances is simple. Reviewing the reconciliations is simple. In an era where information / confirmations can be faxed, emailed, basically at the speed of light.
You confirm cash, the balances and then review the transactions/reconciliations to match. NOW you could have an irregularity such as the Account is in the name of a Company that does not technically match the name of the subsidiary. That can be solved with paperwork to clarify. So until they define the scope and materiality of the issue, which should be easy, I am still baffled Unless they find fraud, ie balances that are not there, they are basically saying they can not confirm the amounts. Confusing to me.
YOU may not have a write down, however, the issues about asset valuations seems NOW to be contained to this one item and not other assets.
Fair point ref EGMI vs KOSS, I am just giving an example of a significant issue representing almost one years sales in scope. I believe if EGMI Knew of something of that size, their lawyers would have FORCED Them to that next step, so that leads me to believe the issue(s) ref asset valuation on EGMI balance sheet are not that significant or debatable as to proper presentation. ---so smells to me more like as others have stated a disgruntled somebody and not a major issue as to the longer term future of the company.
This is a story that has yet to unfold, but no doubt, all with skin in the game will be eagerly awaiting each serial Chapter as it unfolds over the next few weeks. Dasturdly Dan ties the fair young maiden onto the railroad tracks, WILL the Royal Canadian Mountie arrive in time to save her, Tune in next week, for more in the story of the Perils of Pauline.
If you want to see what has happened recently to other companies (small/micro cap) that had a SEC Trade halt, it might be of interest to look at the Chart of KOSS
http://finance.yahoo.com/q/bc?s=KOSS&t=3m&l=on&z=m&q=l&c=
Just so you know WHEN IT started trading, it dropped (lost about another 30%), but did not go to ZERO and the Koss company issue was the a Financial Officer embezzled 31 million dollars to buy fancy dresses and all sorts of personal stuff. NOT SAYING THAT IS THE CASE for EGMI, but shows that all is not lost even in cases of severe loss. To put the KOSS Loss in perspective, the last years annual Sales was $38 million.
Disclosure, Thank God I did not own KOSS, just know of the situation as it is headquartered in Milwaukee and I have friends who live there and it obviously made big news in Beer Town
Pegasus the new guy CFO helped the old CFO on contract and that resulted in the restatement in days of announcing the earnings as ONLY part of the NOL being used against current income. My guess is with Worldwide Income, NOLs have to be allocated to country of origin so all New Income might not have the NOL applicable.
I passed my CPA in 1973, retired now from that work, so inactive, but used to do auditing, tax and consulting. BUT not international taxes
very good post reden, appreciate the time spent to compose and post your thoughts. I wholeheartedly agree with the post.
I have again looked at the 10-Q filed in Nov, 2009 and find it hard to believe that the asset valuations are off-at least as of the date of the Filing. L. Boyd (I think I remember that right) signed the statements and they were on a consulting basis looked at by the last CFO that resigned and went on contract because of the DO Insurance issue.
Not too many items really on the Balance Sheet I have read the footnotes/comments and they do indicate the investments are hard to value and management did not believe them to be impaired. I believe we have had a management power struggle over who will lead the company, Kevin or Lee.----during this struggle silence has prevailed leading the door open for this kind of disgruntled complaint to the SEC. Given the investing environment they have to take a protective/aggressive stance perhaps----I look forward to EGMI clearing up the issues. By now, the SEC has had to notify them of the items they are concerned about---as I take the statement by the SEC to be likely broader than the actual issue, ie particular assets as opposed to all assets. GLTA.
you are probably correct on someone with an axe to grind. Like the old saying, Hell hath no fury, like a woman scorned! So do not leave out the opposite sex.
Or as Tiger might say, Hell to be chased by a woman with a nine iron.
I will stand up for Gurupup, the worm turned slowly as since Dec 5th much has happened, or better to say much has not happened.
Look, I love my wife for example and could write glowing paragraphs about her, but if she all of a suddened stopped talking to me for two months, while at the same time reduced my net worth by about a half, WELL the worm would turn as well.
Cancelling the last CC on the day of the CC, is like leaving the bride at the altar --ever been stood up on a date. Hmmm, so the reaction by Gurupup and others is understandable.
I am still very slightly green at these levels, but I am a LONG TERM investor and have to side with Gurupup ---many here are Long term investors with more shares than I have and most have been patient and as a result have ridden the storm with disbelief that a CEO could make such basic communication errors--now to the point that falling on the sword is his really only viable option.
It reminds me of my favorite Wizard of ID Cartoon, where the guard sees the town folk with torches coming to the castle. The guard tells the King, "The peasants are revolting!" And the King (not seeing the town folk with torches) replied, "They certainly ARE!"
Kevin has loss sight of shareholder value and has acted as if we are the peasants.
stockholder pressure from major holders for Kevin to resign and go back to the sane old guard is the only reason I can think that is driving the PPS, Sad when the CEO resignation raises the price of the stock, rather than the other way around. The closer we get to the CC, if the PPS continues to rise, it is an indication that Kevin has left the house.
And if he does not, then I suspect that many unhappy shareholders to vote for a board that will tell him to leave.
And my 435,050 shares will side with Gurupup
Great post gurupup. I agree on all counts. Unhappy shareholders will elect a board that sooner than later, clean house. Not all that far fetched that the CC will be about announcing some resignations and a new direction from the proven old guard that brought in the business and got EGMI Postive EPS in the first place.
If this stock was a horse, before you shoot it be sure to take off the Saddle and Sterling Stirrups----I think you have a GOLD Saddle in EGMI as the Cash of 14 million should not be shot with the horse.
Don't forget the Cash and investments value per share is what --I forget 25 cent or more. The on going business value and future cash flow with nice Gross Margins, surely makes up the rest. Just need clarity and direction.
MOST Important question on CC, Why all the silence?
six months FROM His date of death, That is very near or do you mean six months from NOW
six months FROM His date of death, That is very near or do you mean six months from NOW
six months FROM His date of death, That is very near or do you mean six months from NOW
same here on the shoppoken.com Time to reorganize, maybe as they say, Elvis has left the building. --or maybe Kevin be rolling wit hiz Ninja Poken now that Sundance be over.
It would be nice if prior to the new CC Date that some PR would be issued to confirm guidance for 2009 and project minimum guidance for 2010. Anything that sheds light on the overall business
Hell I would have been happier if it was postponed due to weather ---at least I could with almost three feet of snow here understood that
Baffling, so I surmize we are now set for two weeks of rumors and PPS Swings. Who knows what will win out, I think all that want to sell already have and so do not look for any blow out in stock price---but uncertainty is never good, BUT rumors sometimes help. We will see as they say
your post just proves Gurupup correct. UBSS vs UBSS on the bid and ask. As Gurupup said in a prior post, until the CC, everything is just playing with yourself.---seems that is exactly what UBSS is doing LOL
LINK to Kevin Poken with Joan Rivers. Someone should tell him she is old enough to be his grandmother. LOL
Anyway, the POINT is Look at the date of the Post IT IS a video posted today and also mentions EGMI as an over the counter stock. THIS TELLS ME that the story on Poken is not OVER---so tomorrow do we hear the fat lady sing, Dunno, but I think not.
http://thepokenscene.wordpress.com/
I think any news will at least solidify the stock. Given the Low PE and that fact that in the last ninety days we have gotten an 85 cent haircut off the PPS.
I am hoping that management gives valid reasons for the lack of news releases and presents itself as a team all heading in the same direction after the loss of Lord Steinberg. Surely they can look at the same charts on PPS and realize the impact on market value of the company over the last ninety days.
HERE'S to on Thursday we will be saying, WHO DAT Dissing EGMI!
There is a comments section on his post, so rather than steal your thunder on the NOL Question, you and others can and ought to post additional comments/questions
Tomorrow will be interesting, Volume today low but PPS maintaining. General Market is helping a little I suppose. --back up over 10,000
HERE's your list of questions. NICE link to thoughts on tomorrow.
http://iancassel.com/2010/02/09/electronic-game-card-inc-egmi-conference-call-10am-est-wednesday/
AND OH, after reading this link, YOU Tell me given the communications and style of Ian versus that of Sykes, WHO would you rather have a beer with over dinner.
My votes as far as learning anything would be with IAN---with Sykes, probably would give me heartburn.
I will give a word of support to GWMAN, had nice long position, and actually went to the NYC Meeting back in Sept, so he has a good level of interest.
And his cruising back on this board indicates to me, he with good news and solid results will be buying back in.
So give Ted a chance. Good to see you back, Ted, comments tomorrow at the CC from you I hope.
PS, last time I walked I did not hear any metallic clanking sounds. ---will have to check again tomorrow. LOL
Weather in the east resulted in AA preemptively cancelling my Wednesday flight, so I will be able to catch the Conference Call.
HEY GURUPUP, I am and I am sure other IHUBBERS would appreciate a post by you after the call as to your take on the CC.
Those listening to the call (Since we have some newcomers) if you hear a question from Alan Davidson, that is our own Gurupup on the call.
Agree volume is pausing awaiting the call, or so it looks like early in the AM.
And even at these PPS Levels, having bought long ago, I am still green, BUT Would have been alot greener if the last 90 days did not go in the Cr*pper.
Hey in 90 more days, with right decisions and announcements, could be back there and more.
I suspect Gurupup and others will be alot happier campers after the conference call. BTW I agree with his post about management being the issue, not the fundamentals. The fundamentals are good, but the future depends on management pulling together to get the growth business that will get this stock valuation back on track. Obama can only blame Bush for so long, and EGMI can only blame the Lord Steinberg death for so long as well.
I have over 400K shares so not sure if I am part of his 5 Million shares group-although I count him as a friend--or at least a good friend of a friend. ---however, I have always said that 80 people probably own about 80% of the company. There are a lot of large holders (however you define large) that have been long on this stock for years.
Gurupup with an investment in this company of size, surely has a reason to be curt and irritated ---Wednesday is management's opportunity to sooth the wounds and get on with it.
Well I had the same thought as to Kevin on the Youtube videos, so you are not alone, HOWEVER, I will give him the benefit of the doubt as trying to fit in "WIT" the VENUE, afterall, it was a Hip & Young crowd when you are HANGIN' WIT Lil John who be Rollin wit hiz Ninja Poken.
He did not come across that way in Conference Calls, NOR when they had a meeting in NYC and many stockholders went to be there, NO ONE was saying that he seemed like a snake oil salesman.
He could be one for all I care, as long as the MOUs become Contracts, become Orders, and result in Sales and incremental growth to the bottom line.
So you are not alone in the view from the YOUTUBE, but lets let the dust settle on hopefully a great qtr and cc
Link to Shop Poken
http://shoppoken.com/
I do not think that theory sounds good--or at least to me, and the reason I believe that is:
Stephanne and Kevin were less than a week ago, smiling at Sundance. We still have a Poken Store online.
I think that lawyers WERE involved before to perhaps have a LARGER interaction between EGMI and Poken, and that is what resulted in the silent treatment and hold up of the Proxy, Board Members, etc, et al. Read into that as you might, and surely this will be asked at the CC on Wednesday, resulting in as I previously posted, A Lot of focus on Poken/EGMI, when infact Poken is NOT the end all, be all of EGMIs future.
Poken --largely a retail business
EGMI----structured as a B2B Business
Interesting technology, which I am sure enamored Kevin, but not strategically the best of fits.
I believe EGMI Fit with Poken might be to use the Moscoe distribution connection to distribute Poken with EGMI getting a commission/fee per Poken
ONE GOOD EYE POPPER deal brought to dollars and cents and you are back to 60% growth, and that is the allure of this company.
Only problem is Kevin D's Rolodex---supposedly Golden---might result in his rubbing shoulders with the Rich and Famous and leaving us with Crumbled Cookies like FAMOUS AMOS.
sorry could not resist that line. Anwyway, lots of irons in the fire that need to be finalized into contracts with real dollar signs hanging off of them. At a Buck the upside potential compared to downside risk is good in my opinion
you know it just might be a possibility that EGMI as an independent distributor with the Moscoe Group as a resource, might actually do better than 60% JV and without having to lay out $500,000.
Although Poken is not the end all be all for EGMIs Future, (and there are many other items already as irons in the fire and Chinalot etc.), it is my guess that on the Wednesday CC a disproportionate amount of time in the Q&A will be spent on Poken.
I as well wonder where all the sellers are coming from. I know many posters here got nervous (not me, maybe I should have) and are not yet calmed down to re-enter until things clear up with a more communicative management.
I just believe that dispite all the worry that fills a vacuum of no news/no communications--the fundamentals still seem to me to be intact. Recent volatile PPS and being at a buck down from two, will make the road back bumpy as dollar buyers will take profits.
I stay long---but not happy about the last 90 days either.
Significant position, like several here on IHUB, AND I believe that most of the larger holders as well have held thru this dip.
Yo Yo Yo High Four Kevin on YOUTUBE
It already has been a couple months ref the LS Estate. I do not think these are what is being sold now. I am sure that question will be asked at the CC.
And regarding how long it takes, well I can only speak from USA estate perspective. BUT It depends here on what the will says and how the asset was titled. For example, if he had Life insurance to pay the (if any) estate tax (as their typically are marital exemptions), and the Asset was held in an intervivos (Meaning while I am living) revocable trust then the asset would transfer immediately.
My father died in California 28 years ago (and Estate laws are different now I know) and ALL the assets transferred within 24 hours with the right documents and went into my Mothers name. The only hold up was less than six months to clear the title to the House with the California Tax Franchise Board. So Estate tax is complex and like the Poken Deal you really don't know unless you have access to all the documents and know the details by having BEEN THERE as a party to the negotiations.
Given the haircut the DJI took yesterday, I am happy that EGMI only got a two cent clip.
Meantime I checked the Yahoo Board for any information, and OMG it is now almost completely overrun by complete thugs that just trash the board with moronic comments. HeartMedBiz was surely right to switch to IHUB. Something to be said for a board being moderated.
Yahoo is more like a gym full of teenagers without any adults---only takes a few to ruin it for the rest.
In reality, it was POKEN's Official BLOG. Not exactly a formal Press Release, but then again Poken is a privately held NEW Age type company, would not have been surprized if they Just TWEETED the Good-Bye or Wrote about it on their FACEBOOK Wall. LOL
Not exactly the way a publically held company has to communicate. HA HA, can't you imagine EGMI communicating on a BLOG or TWITTER ---not likely.
I am happy to wait for a formal conference call that will be available to listen to after the call is over on their website.
Like I said before, I will be traveling on an airplane during the call, so you guys be sure to ask some good questions.