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From LinkedIn I found
David Hertz
Demographic info
Investment Banking | Greater New York City Area
Current: Associate at GC Andersen Partners LLC Education: Yale University - Yale School of Management, Cornell
From G C Andersen webpage
David J. Hertz
Associate
Mr. Hertz rejoined G.C. Andersen Partners in 2008 following his graduation from business school. Prior to G.C. Andersen Partners, Mr. Hertz spent four years with Newtek Business Services, Inc. (NASDAQ: NEWT), a nationwide provider of business services and financial products to the small and medium-sized business market. At Newtek, Mr. Hertz last served as CEO of Channel Management Partners, LLC, a sales channel marketing affiliate of Newtek that he founded. Before that, Mr. Hertz was a Director and CFO of Harvest Strategies, LLC, Newtek’s former strategic planning, marketing and operations affiliate. He began his career in the Mergers and Acquisitions Group of CIBC World Markets. Mr. Hertz received a BS, summa cum laude, in Applied Economics and Management from Cornell University and an MBA from the Yale School of Management.
ian cassel's webpage has extensive information and blogs on egmi, and he has maintained the historical list of blogs he made on egmi. So I would not condemn him for dropping the ball on egmi, as far as recent posts, other than LC resigning, really not much else to report on, the issues have been hashed over ad naseum. And you can read the comments to the posts as well which are from others invested.
LINK FYI
http://iancassel.com/following-companies/egmi/
Why don't you first write to the widow or executor of the LS Estate and the top Institutional Holder. With those two they probably constitute the 15%. Ask them why they have not moved forward with this on their own. TWO LETTERS/Contacts and I believe that is the fastest way to shake the trees.
I surely share your concerns and frustration. I have a boatload of this stock, so am like many here, vested in a orderly outcome. I just do not know what can be done externally to move this along.
Kevin Donovan and his advisors surely must know of the concerns of those on IHUB and the larger stockholders. They seem to have their own timetable and agenda in rolling out the solutions that to us seem pretty damn obvious.
THE LC Letter in the most recent 8-KA tells me the management conflict is not over, just now between LC not as board member, but as Sterling Employee providing services to EGMI and in his statement as staying around to cooperate with confirmations as well. He obviously still have some leverage --as one would expect from someone that inessence built the company and knows all the contacts in China, the EU, etc.
I might add that in the letters they call for Christensen and Donovan to resign from EGMI, so that adds to my belief that LC is far from out of the picture as I earlier thought from his resignation from the BOD
This will work out but patience will be needed in abundance---the annual meeting when it ocurs will surely be well attended. JMHO
I surely share your concerns and frustration. I have a boatload of this stock, so am like many here, vested in a orderly outcome. I just do not know what can be done externally to move this along.
Kevin Donovan and his advisors surely must know of the concerns of those on IHUB and the larger stockholders. They seem to have their own timetable and agenda in rolling out the solutions that to use seem pretty damn obvious.
THE LC Letter in the most recent 8-KA tells me the management conflict is not over, just now between LC not as board member, but as Sterling Employee providing services to EGMI and in his statement as staying around to cooperate with confirmations as well. He obviously still have some leverage --as one would expect from someone that inessence built the company and knows all the contacts in China, the EU, etc.
This will work out but patience will be needed in abundance---the annual meeting when it ocurs will surely be well attended. JMHO
What makes you think that 15% of the stockholder are willing to pay out of their own pockets to have an Audit done that other CPA firms to date have been unable to do--at least to the point of issuing an opinon, qualified or not.
While I applaud the activism and attempts to get the attention of someone in charge, I believe that your efforts would be better spent doing something else less costly to move the ball forward.
It is my opinion the work has been done and the parties involved are biding time with nit-pic items to delay the release, PERHAPS while legal, not the honorable thing to do. --and getting in the middle of this pissing contest, will, well just get you pissed on in the process.
Emails and letter writing, are far cheaper and perhaps just as effective then starting an expensive long drawn out process, IF it were easy to do, well LS Estate and ONE other big holder would have already DONE.
Patience is a virtue. --one that will be required in abundance in this soap opera of a mess.
I think that the funds are there and are confirmable, but it serves KD right now to purposefully throw roadblocks in the process. That even was referred to in LCs letter.
Holding up expense reports for example, would prevent (since the expenses are significant) the closing of the books for 2009. In terms of confirming the money with RIC, he could be asking for additional confirmations, such as underlying securities in the Hedge Fund balances and asking for interim audited statements for the funds---which they will not provide since most entities only have unaudited interim statements as an example.
I also believe the past statements are okay, just waiting for the auditors to release---how would you hold that up, Perhaps by not paying the bill. All kinds legal tricks to delay release of information and I think KD is attempting to delay to keep his position as King of the Hill and hoping to outwait his opponents.
It just seems to me that a staring contest is in the works between the parties and KD is buying time by doing so. Of course KD now gets to hire consultants to do this work and having the ability to grant contracts for this work is what is left of his power base. Sad but this will all resolve itself when KD is damn good and ready---until then he acts like a white knight (who just shit in his armor and the stink is contained)
While the estate MIGHT benefit as an unintended consequence of the trashing of the PPS due to KDs incompetence and grand standing, there is NO link or conspiracy theory here at all.
Infact the Estate might benefit from the estate tax, but NET it still loses. A lot of factors enter into estate planning, and I am not sure about UK law, but in USA you have a spousal exemption and typically the uber rich have lawyers that set up trusts and other enitities that shelter estate taxes.
So if the Estate saves taxes on the lower value, the upshot is if the stock regains value, you then pay Cap Gains tax on the upside. So you then worry about which is worse, the Estate Tax or the Cap Gains. So too many factors to say this is a blessing for the LS Estate, let alone a planned act. I surmize, if it is a blessing, it is one that they would rather not have been blessed with.
The irony of it all, is that it was the LS that brought KD and gang into the organization, so the Lord Hoisted himself by his own pertard as they say. And for Kevin, it sure was a shitty thing to do to a guy (and his family) that hired you. If any of you here believe in Karma, well Kevin lost whatever Good Karma he might have had.
I will take a stab at answering your question as HOW LC can legally prevent EGMI from access to the funds.
First EGMI is a Company not a person, and from the Lee Cole letter it appears that EGMI had some formalized procedures and hired Sterling LLC to handle the disbursement of funds in accordance with those procedures.
SORT of like you go on a business trip, and come back asking your company for reimbursement, THE Company will not reimburse you NO Matter your position within the company, unless you meet the requirements of the companies procedures. The Accounting department will not reimburse you unless you fill out a company approved Expense Report as an example and that Expense report meets the documentation the company requires to match their Standard Policy.
SEEMS to me that Sterling was disbursing funds to USA Accounts based on a company approved budget and just because Kevin Donovan is CEO/Co-chair, the EGMI Company has checks and balances that are required to disburse funds to its employees---That is because the funds belong not to the employees, but to the stockholders. If the USA division was overbudget, then there were probably procedures to request over budget funds.
I am just speculating, because I do not know the procedures and internal controls that EGMI as a company setup to control, monitor, record and disperse expenses. However, I think my explanation should be a good start in answering your question. SO LC IS NOT preventing EGMI from accessing the funds, but rather LC is preventing an employee from accessing the funds without following procedure. That is my take.
Just a question, who would you rather be when it comes to having your arse on the line legally, Kevin Donovan or Lee Cole.
I would rather be Lee Cole as his exposure is minimal. He did not during this mess wear the Hat of Co-chair and CEO.
While on the BOD he also had a fudiciary responsibility with Sterling LLP and based on his letter as a contractor of services to EGMI seems he did the right thing(s) to insure that procedures put in place were followed.
It is KD that without the oversight of the Lord Steinberg that became the cowboy thinking he WAS the ORGANIZATION as opposed to a PART of the organization that represented the interest of shareholders. Now KD last press release said EGMI is investigating strategic alternatives due to not being able to verify the RIC funds. I find the term strategic alternatives interesting. So they have hired Price Waterhouse Coopers to do a forensic accounting of the circumstances. --This seems like KD trying to buy an opinion of a prestigious CPA firm to justify his actions. I think PWC might just give him an opinion that he may not like. Lets see KD spooks the past CPAs and TATTLES to the SEC and when the dust settles NO Material Change. Then to add more trouble for KD with material events requiring 8-K reporting in hand, (letters of resignation from 2 board members) he delays/withholds the information and files 8-Ks to announce these changes seriously late.
Just my opinion, but I would feel far more comfortable in Lee Cole's shoes than Kevins. ALSO What should LC have done, what would YOU have done if you were powerless, but YET had a contract to provide professional services to EGMI and the Co Chair and CEO was asking you to do Unprofessional actions against policy. I think LC had little in options---and in the end it will be KD that gets SEC sanctions and legal issues--that is when the SEC can tear itself away from other online diversions.
Lee Cole and Kevin Donovan Coulda used this advice back in late 2009 and we would not have had this issue
Stockholder equity as of 9/30/2009 per Yahoo was $22MM so I do not know where you get $25MM
LINK
http://finance.yahoo.com/q/bs?s=EGMI.PK
Now I understand how the SEC created the "Sticky" Situation with EGMI----LOL
I suppose when verifying the cash balances, the pages in the request stuck together resulting in the balances not being verified.
As I have said before, NO ONE involved in this mess wears a White Hat, but all have some shades of grey, with KD wearing the Blackest of all the hats.
As is oft said, What we have here is a failure to communicate.
But attached to that failure was a pissing match that destroyed in the marketplace 90% of the Market Cap of a Good Business.
No matter who is at fault THE Result decimated the PPS. Ref Lee Cole other businesses, most of those if I remember right were Medical pharmacy types---which are far more risky than a B2B Business model of EGMI. So I guage his performance based on him taking EGMI as stated in his letter from negative networth to a book value of 22 million.
All this will take time to unfold, but I prefer having someone left that knows the history and LC is the man that knows the business so would be my dance partner if I had to chose.
Presumably they have some control over that money in the capacity of the contract to provide services from Sterling LLP as I would read it.
And while he resigned, he stated he would cooperate with EGMI to confirm the account. Quite frankly I am happy this money is tied up, as KD and his spending ways would have evaporated large chucks of it.
Glad to have this locked up as we will need some of it to pay the advisors we now have but a small price to pay to keep KD from ruining this company even more. DUNNO about the rest of you, but unless I have a travel/business conflict, I intend to go to the annual meeting.
Amazing how the sunshine of truth and information can light up the situation. So if you have faith in the information provided (and I do) then the course to correct becomes easier to see. Will be interested to see the PPS market reaction, however, my guess is it should be positive.
So it seems with no change in the business or balance sheet, Kevin Donovan in an effort to maintain his control of the company and spending ways at the helm, SPOOKED the CPAs and TATTLED to the SEC about an issue that was more about him and not about the company. If in the end, the Assets are there (which all along I believed) then this was a powerplay by Kevin that resulted in a huge loss to stockholders---who are his ultimate boss, In my case his little song and dance cost me over a half a million in stock value in less than 2 months.
I want this guy out (KD and crew) and EGMI to get back to running its business so THE PPS reflects a going concern and we get off the pinks/grey market. If we have to pay a price to GCA, PWC LLC and a law firm, so be it.
Kevin's actions were immoral at best and likely criminal as well. I am still a fan of Lee Cole and believe he could be a part of the solution with a new management team in place.
Well Bugsy it may be getting as you say UGLY, BUT it is doing so in the Light of Day and that is a very good thing.
Like the OLD Question when chosing who to vote for, Who would you want to have a beer with?
My choice would be Lee Cole, even if the damn Brits drink their beer warm. ---and now with the ash cloud from Iceland making travel difficult, would still rather have a beer with Lee and gang.
Diner with KD, No thanks, unless it is amateur night. LOL
Like I said KD is playing checkers while everyone else is playing chess. Checkmate!!
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EXHIBIT 17.3
April 20, 2010
Via Email and Facsimile
The Board of Directors
Electronic Game Card, Inc.
Gentlemen:
In keeping with the inappropriate conduct which the Co-Chairmen of the Electronic Game Card Inc. (Nevada) (the “Company” or “EGC”) have routinely followed for months, I was not consulted prior to the grossly late filing of the Current Report on Form 8K announcing my resignation but, instead, was furnished with the filing as a fait accompli after the fact. In describing my resignation, the Co-Chairmen, Kevin Donovan and Eugene Christensen, had the following written on behalf of EGC:
EGCI believes that the disagreement that led to Mr. Cole’s resignation related to his dissatisfaction with the way the EGCI’s U.S. operations were being run.
The Co-Chairmen and EGC are well aware that my resignation resulted, instead, from broader concerns over conduct by the Co-Chairmen over an extended period of time. Clearly the Co-Chairmen have chosen not to disclose those broad concerns which I had expressed repeatedly over several months to no avail. The non-performance by management is only a part of the concern I had expressed. Consequently, in accordance with paragraph (a) (3) of Item 5.02 of the Form for Current Reports on Form 8K, I am herewith furnishing this letter to EGC stating that I disagree with the statements made by the Co-Chairmen on behalf of EGC in describing my resignation and providing an explanation of the basis for my disagreement in the expectation that the Co-Chairmen will comply on behalf of EGC with the requirements of Item 5.02 of the Form and file this letter, and its attachments, as an exhibit by an amendment to the previously filed Form 8K.
I, and my colleague, Linden Boyne, and the company (“Sterling FCS”) that employs us to furnish various management support services to EGC, have previously informed the Board of our concerns orally and in numerous letters and reports various correspondence to the Board . (I, Linden Boyne and Sterling FCS are sometimes referred to below as “the parties”).
“The parties” have at all times acted within the remit of the Sterling FCS contract to provide various management support services which adheres to EGC’s bylaws, committee charters and resolutions and other authorities as established 2 March 2006 when Sterling FCS’s contract was amended and it became responsible for providing individuals to perform EGC’s CEO function as well as the CFO function.
It is worth noting that while Sterling furnished those services the management services contract and these charters, committees and authorities had served EGC well, taking EGC from negative equity of ($4.4m) in 2006 to positive equity of $22m as at September 2009.
From information received I believe that selective and misleading disclosure has been made by the Co-Chairmen with reference to me, Linden Boyne and Sterling FCS.
From information received it appears that these misrepresentations have been deliberately spread to cause damage to both “the parties”, EGC, and EGC’s public shareholders.
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From November 3 rd when Kevin Donovan and Eugene Christensen were appointed as Co-chairman there has been a catalogue of what now appear to have been deliberately obstructive tactics by US management and their agents which have been described at length in our letters and reports to the Board.
We became concerned by signs suggesting that management were incurring considerable unauthorised and unbudgeted expenses despite efforts by management to delay disclosure. Management failed to furnish information on these points despite repeated requests.
In December 2009 there was a sudden flurry of activity concerning a potential merger in what management described as an emergency. I found that months earlier management had entered into commitments to and agreements with the proposed partner of which I was unaware and without authorisation by the Company’s full Board. I requested customary due diligence materials, including any business plans and projections for the combined entity but management was unable to furnish these items which apparently had not been prepared. I remarked that I would be unable to approve a transaction without customary due diligence materials and review and management turned its attention to other matters..
Subsequent to November 3 rd Sterling had been extremely concerned by the lack of any business generation in the US and the escalating expenses and had also been extremely concerned that Company procedures and processes were being ignored by the Co-Chairmen---not just in the instance mentioned above but in other cases as well---and a meeting was scheduled to be held on January 7 th to discuss Company business. Sterling made a determined effort to have these concerns included prominently on the agenda for the meeting.
Despite EGC’s own Board procedures and common sense, the Board meeting agenda was not circulated to the entire Board by the Co-Chairmen until the actual day of the January 7 th meeting (although we did later determine that the Co-Chairmen had circulated the agenda selectively to some Board members and not others) and it contained none of the agenda items Sterling had requested. Taken altogether, the circumstances dictated that the meeting was not properly noticed for Board members to make prudent informed decisions and myself and Linden Boyne did not attend.
We were promised prompt delivery of a record of the January 7 meeting in order that we might review and react to discussion items but despite follow-up requests we did not receive a transcript until a fortnight later. We eventually received, in addition, a copy of the letter announcing intention to resign which Anna Houssels sent in on 25 th January. When we received the transcript of the call and Anna’s resignation letter it became apparent that US management was engaging in more obstructive and damaging conduct. We sent a comprehensive reply to Anna’s letter to correct her misunderstandings and furnish information which the Co-Chairmen had apparently withheld from her. We aren’t surprised that in the Form 8K reporting the resignations of Anna Houssels and me the Co-Chairmen arranged to attach Anna Houssels’ full letter but omitted my response (which is attached as “exhibit 1” ) , which was part of the explanation of disagreements with the Co-Chairmen which ultimately led to my resignation.
Subsequent to this the Co-Chairmen continued to engage in obstructive and damaging behaviour even more extreme than previously. They contacted banks and EGC’s auditors and interfered with EGC’s audit process by not going through the proper channels and not informing the CFO or the only remaining member of the Board’s Audit Committee.
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Throughout this period the Co-Chairmen were confusing Mendoza Berger, EGC’s auditors, by repeating misinformation resulting from the Co-Chairmen’s interference in the audit process. The Co-Chairmen continued to interfere and hinder the process by not informing Sterling of the incorrect information they were circulating despite repeated requests from Sterling. If common sense and proper channels had been followed misinformation would not have been passed to Mendoza Berger, confusion would have been avoided or easily corrected and EGC would not have been damaged.
Subsequent to this the Co-Chairmen continued to act outside the remit of EGC’s charters. Belatedly recognizing their lack of authority, they have attempted to change the committee charters and increase their authority (please see letter to the Board 24 th March, “Exhibit 2”) ---without going through proper channels and committees or otherwise following proper and prudent procedures, of course.
Prior to the Board meeting scheduled to be held on February 22 nd Linden Boyne and myself registered our dissatisfaction with the fact that we had both not been allowed to carry out our properly constituted positions with EGC and that the actions of the Co-Chairmen had caused EGC substantial damage as they had not heeded repeated warnings regarding their misconduct. On 25 th February I and Linden Boyne submitted our resignation letters and a draft 8K announcing the same which became effective on March 1, 2010. EGC has not properly reported those resignations despite our requests that the Co-Chairmen do so .
Although I have resigned as an officer and director and Linden Boyne as CFO we have continued in good faith to assist EGC under the Sterling contract despite continuing obstruction and misinformation by US management.
The information listed above along with the information included within Exhibits 1-2 illustrates our concerns, not just with US operations but with corporate governance by the Co-Chairman, which formed the basis for disagreement and, ultimately, resignation.
Very truly yours,
Lee Cole
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EXHIBIT 1
Dear Anna----
I have received your 25 January 2010 letter to the Board. I must say that I share many of your frustrations as I have repeatedly expressed over the last few months. I would like to add a few comments to yours. My points are numbered below to correspond to the points in your 25 January letter. I am travelling today so a few of these points are made in summary form.
1. Bank Confirmations ---The Company has bank statements which are available to all Board members to inspect upon request. Normal Company practice is to document confirmations through auditor confirmations of bank balances in connection with the preparation of financial statements for each quarter and year. It typically takes three weeks to obtain confirmations as they are posted to the financial institution by the auditor and then posted back. The process was prolonged recently as the forms sent by California management contained incorrect information, which delayed processing. The requisite confirmations will be forwarded by Linden today.
2. Transfer of Funds to the U.S. for PAYROLL (almost three months overdue) ---You noted that funds were transferred to the U.S. accounts on 27 December 2009. In total, the sum of $820,000 was transferred to U.S. accounts in the 4 th quarter. According to agreed budgets, those sums, ought to have been more than sufficient to pay payroll and other budgeted expenses. The budget for the 4 th Quarter anticipated expenses of $805k split evenly across the period. Expenditure in Quarter 3 was $848K. Both these totals include costs for London office as well as the US establishment.
Transfers from Electronic Game Card Ltd into Bank of America for US only expenditure in the 4 th Quarter of 2009 amounted to $820K plus a further $50k of counter credits which Linden presently assumes are from warrant conversions although he has not received details from the CA office. London expenses on the Quarter are approx $100k so the transfers to BOA should have been more than enough to cover the planned expenditure in the US. It is therefore hard to understand why payroll payments have been omitted unless there has been a significant amount of unbudgeted expenditure.
Linden advises that he has made three requests in writing to T Schiff for details of expenditure for both invoices and expenses supported by receipts. To date he has not received any original documents and no receipts to support expenses claims from the US. He is not convinced that he has received all the invoices for the period. For example, he received invoices for Poken dated November on 21 January 2010.
The apparent failure to pay payroll suggests that money has been spent by U.S. management on additional non-budgeted items that U.S. expenses have been well in excess of budget, that U.S. income has been below budget, or that some combination of those factors is at work. I have previously advised my concern over the unauthorised expenditure of funds by U.S. management well in excess of budget amounts. There must be an immediate investigation of the apparent failure by U.S. management to generate revenues in accordance with budget, their actions to make unauthorised and poorly considered expenditures well in excess of budget, any breaches by them of corporate and financial accounting protocols in taking making those expenditures and related commitments, the complicity of other persons, possibly including Board members, in their conduct, steps taken and to be taken to correct the problem, make appropriate disclosures if any are necessary, and augment or replace the existing U.S. management team.
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Be assured that the unseemly rush to engage a new CFO in violation of Company protocols will not be allowed to proceed or to interfere with this investigation and corrective measures which may be necessary. In fact, I will direct the professionals to investigate connections between those efforts to subvert the process of the Company’s committees and Board to retain a new CFO and elect new directors and the apparent failings by U.S. management and former U.S. management, in the case of Tom Schiff, and whether their illegal pursuit of the CFO selection and election of directors in violation of proper process is an effort to preclude that investigation.
To that end, I will demand copies of all communications with and concerning the Rutan firm and its unauthorised engagement, similar information concerning the Lewis and Rocca firm, all documentation pertaining to expenditures of funds and commitments by the U.S. management, and all documentation and related communications pertaining to efforts to plan and pursue those ends or avoid requirements for normal authorisation of the same. In addition to investigating the conduct of U.S. management and former management (in the case of Tom Schiff), the possible complicity of Board members in their plans, which is suggested by the pattern of selective disclosure of information to some Board members and not myself or Linden Boyne, the Company’s CFO, and sometimes not yourself, and continued actions by certain Board members individually rather than through ordinary Board process, also will be investigated.
In the meantime, I will object to release of funds or accounts by the Company’s CFO to U.S. management until this conduct by U.S. management is investigated. It would be improper and imprudent to make further funds available and risk waste of corporate assets until that conduct, including the apparent failure to pay you out of funds which ought to have been sufficient for purpose, is properly investigated by independent professionals I shall arrange for such purpose.
3. Series A Stock (Status) ---Our CFO has been hard at work on a number of items, frequently of the make work variety as he has sought to satisfy serial information requests while carrying on with the real financial work of the Company. This has been all the more inappropriate as much of the work our CFO has been doing has been to clear up the many items left incomplete by Tom Schiff, while fielding inquiries apparently generated by Tom Schiff. For some reason both Mr. Schiff and certain Board members seem to be confused about Mr. Schiff’s role. Mr. Schiff resigned as CFO and an employee so he shouldn’t be directing anyone at this juncture. In addition, it is still doubtful that Mr. Schiff was properly engaged post-resignation.
In any event, I understand that the CFO is prepared to share a reconciliation of the Series A ledger as this is a matter on which he has been working in the normal course in connection with preparations for the year-end audit in any case. Although I do not have the details at hand myself, my understanding is that the difference to which you refer is relatively minor. Consequently, this is the kind of item that is reconciled when year-end adjustments are made on audits, so this is hardly unusual, as Mr. Schiff or any other person experienced in financial reporting of public companies ought to know and explain to the other members of our Board.
4. Common Stock Outstanding ---Similarly, while I do not have details immediately at hand while travelling I do know that the 70MM common stock number included in the latest 10Q filing reflected prudent and conservative accounting by our CFO. In that case, financial statements were prepared on the assumption that shares were being issued in a commercial transaction which ultimately did not eventuate despite information to the contrary at the time of filing. This, again, is the type of minor adjustment which typically is made, with the benefit of 20/20 hindsight and review of changing circumstances, in connection with year-end audits and would be made at that time in this case. It is rather easily explained if one but asks the appropriate Company officials. Tom Schiff, who left so much work undone in his short tenor as an officer and employee and who has subsequently been disruptive to the business of the Company, is not that person. This is yet another example of the relentless distractions from the business of the Company and waste of effort and resources which have resulted from what is clearly an orchestrated effort by senior U.S. management to divert attention from their failure to perform. I will demand an immediate accounting of Mr. Schiff’s role in this matters and Kevin Donovan’s apparent complicity in what appears to be an organized pattern of behaviour.
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5. EGMI Nevada Corp., EGMI Delaware (Manufacturing) ---Anna, I recognise that with your sales background you would not be completely familiar with U.S. corporations law or mergers and acquisitions generally so I can certainly understand that you may have been confused by Kevin Donovan and others concerning the transaction in which the domicile of the business was changed from Delaware to Nevada. In fact, there is no “up stream” merger, as you put it, because in the transaction the Delaware company was acquired by a Nevada company in a share exchange transaction, thereby becoming a subsidiary of the Nevada company. That transaction is explained and reflected in the Company’s SEC filings in 2003. Consequently, this transaction ought not to have been addressed to you as if there were a substantive issue or error as none exists. (You should also note that there was more than one Delaware entity formed in connection with EGC business and potential business but the “second” entity has not been active and does not hold any material assets. The “good standing” of Delaware companies was addressed many months ago in response to one of Tom Schiff’s earlier missives. In that case, the inquiries by Tom Schiff were undertaken when he, Kevin Donovan and possibly others utilized the services of the Rutan firm without authorisation by the Board or proper procedure and apparently without corporate purpose but rather as part of what now seems a plan to take control of the Company rather than pursuing the interests of shareholders.
However, I don’t see that a similar excuse is available for the Lewis and Rocca firm raising issues concerning past filings, etc. at this late date given that the Lewis and Rocca firm was previously engaged at Lord Steinberg’s request to do due diligence on the Company and its various actions and filings, including the Series A, in 2007 and raised no such issues. I know that because the Company has paid Lewis and Rocca legal invoices for work performed at Lord Steinberg’s request in 2007 and early 2008, including that review. Possibly the Lewis and Rocca firm’s efforts at this time are being skewed by Kevin Donovan and others for their own purposes, which do not appear to be the best interests of shareholders. That still does not justify those efforts, or the apparent selective disclosure to management and certain Board members who may be complicit in these activities.
6 and 7. Audit Committee and Compensation Committee ---Anna, I share your concerns about the obvious disregard for the Board’s own rules and those of its Committees. The points you raise concerning the alleged engagement and compensation of new sales and marketing consultants without proper authorisation are only the tip of the iceberg.
On 6 January, Sterling issued a report to the Board (a copy of which is attached for your convenience) concerning the Company’s Corporate Governance Procedures and Processes. In the report, Sterling summarised the Company’s corporate governance procedures and problems caused by inattention by U.S. management and certain Board members to those procedures, as follows:
“EGC has established corporate governance procedures adopted by the Board (i) to ensure effective operation of the Company to maximize shareholder benefits, and (ii) achieve actual and apparent good governance and transparency. Lately there have been too many actions taken ad hoc without following established procedures and proper consultation with the entire Board. This can lead to business missteps such as the recent case of Poken alleging that commitments were made by EGC pursuant to an agreement not authorized by the Board and were not fulfilled by EGC. Inattention to the establish procedures undermines financial controls, reporting and accountability such as occurred with the recent unexpected jump in CA expenses and jeopardizes achievement of budget targets. Board members are required by law to exercise their best judgment; action without adequate prior preparation followed by proper consultation with all Board members does not satisfy legal requirements and is not authorized. Failure to follow established procedures exposes the Company and individual officers and directors who act outside established procedures to liability.”
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Sterling then went on to summarise the relevant procedures for the Board as a whole, the Board’s Audit, Compensation and Nominating Committees, Sterling’s own responsibilities and authorities delegated to Sterling by contract, the need to comply with confidentiality and other restrictions and Company policies, the adopting of revenue and expense budgets and related performance management, requirements for significant payments and commitments and expense reimbursements, and preparations for meetings, including distribution of agendas, proper notice, etc. The effort was intended to remind everyone of the existing requirements and ensure that business was conducted accordingly and with less avoidable waste of time, effort and corporate funds. No one could thereafter deny knowledge of the procedures as an excuse, not that everyone wasn’t already aware of the procedures.
As I have previously stated to all of the Board and to U.S. management, both common sense and our own Board and Board Committee rules dictate that proper, prudent procedures be followed in determining the personnel requirements for management and the Board, establishing search criteria, pursuing searches, establishing compensation structures, negotiating compensation, and ultimately selecting and approving the final candidates. Those procedures have been consistently ignored by Kevin Donovan and Eugene Christensen. The actions which they purport to have taken, with or without alleged authorisation of the Board, therefore, are improper and invalid, and subject them and others who have acted with them to potential liability. It is yet to be determined whether their efforts are part of a scheme to stack management and the Board with cronies of California management which has proven to be unequal to the task of operating the Company so that they might forestall investigation and correction by myself and others looking out for the best interests of the Company and its shareholders. If necessary, I will refer that matter to independent professionals and demand all communications and records pertaining to these matters be immediately furnished by Kevin Donovan, Eugene Christensen, and those others who they have involved in these processes.
I hope, Anna, that you now understand this situation more fully and the breadth of the disregard for corporate processes by Kevin Donovan and Eugene Christensen and are disavowing their efforts to retain not just the individuals to whom you referred in your letter but also Tom Schiff, a new CFO, and the so-called new directors who they are seeking to install. Otherwise, you will be subject to the same potential liabilities and, with knowledge of the procedures which have been disregarded and the improper conduct, insurance and indemnification is unlikely to protect against any liability. I would not want to see you in that position and hope that you will respond most quickly on this point as I believe that you have been misled up to now.
8 Poken ---I share all of your concerns regarding Poken. Yet again, this is an example of Kevin Donovan, apparently with Eugene Christensen’s complicity based upon Eugene’s approval of Kevin’s conduct, acting to commit the Company to significant transaction and expense without proper discussion among Board members much less Board approvals and compliance with procedures. As I have previously written to Kevin Donovan, Eugene Christensen and others, I did not receive the alleged Poken agreements, purporting to be effective as of 12 October 2009, until 22 December so I certainly hadn’t been part of any Board meeting approving Kevin Donovan entering into those alleged agreements either. There can be no question that an investment of the magnitude proposed should have had to have been formally approved by the Board of Directors. It is outrageous that Kevin Donovan and, apparently, Eugene Christensen have ignored this obvious requirement and, once again, attempted to rush commitments through without proper consideration or procedure.
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Recently, I have received a number of emails from Kevin Donovan and/or Eugene Christensen, as well as Joe Zappulla who apparently was engaged to work on this matter some time ago---also without Board approval or authorisation of which I am aware---about how urgent it is to proceed with the Poken transaction. I have responded several times that I have no objection to doing a transaction with Poken provided that we have done proper due diligence so that we understand the business and the business plan and can make an informed decision on the matter as directors. I have finally received information which, upon review, raises many more questions. How can we possibly proceed without a reasonable and provable business plan for the initial joint venture?
The Poken transaction, and the conduct in trying to rush it through without proper procedure, evaluation and diligence, is symptomatic of a dangerous, improper and unacceptable pattern of conduct. Time after time we are advised of matters and instant action is demanded without proper procedures having been followed, using alleged “urgency” as a cover for disregard for those procedures. You will remember, I’m sure, that no more than 4 hours after the untimely death of Lord Steinberg his widow was harassed for statements concerning disposition of Lord Steinberg’s estate before his body was even cold, insisted on immediate appointment of replacement Chairmen without notice or consideration due to alleged emergency, and even tried to push through a stock buyback plan without any preparation or notice. The Poken fiasco is only the latest instance of presentation of phoney emergencies in order to justify improper actions in violation of established procedures. The attempt to appoint a new CFO, the employment of consultants you mentioned, and elect new directors without proper procedures are just additional examples of this behaviour, and hardly the only ones.
Yesterday we received yet another demand for “urgent” action because of alleged shareholder questions about why there had not been more news concerning Poken, appointment of a CFO, negotiations with China Lot, and appointment of new Board members over 60 days after someone told shareholders about these things . Who authorised disclosures of sensitive business matters such as that? The Board certainly did not do so. I did not do so. I doubt that you did so (did you?). Disclosures on these matters apparently were made by Kevin Donovan without authorisation and in violation of Company policies, common sense and most likely SEC rules. On at least on one occasion he did so by volunteering to be interviewed on these sensitive matters by a serial blogger, of all things; it is right there on the Internet! This is hardly the only occasion of improper disclosure by Kevin Donovan. There appear to have been repeated leaks of market sensitive information. This can subject the Company and directors to liability. It also undermines our credibility with shareholders and potential investors. I am not certain of the degree to which Eugene Christensen is explicitly complicit in these disclosures, although he could be held responsible as Co-Chairman for allowing Kevin Donovan to proceed as Kevin has done despite my protests. These, too, are matters I will refer to the independent professionals I will arrange.
At this point I believe that the cumulative pattern of misconduct I have described is so serious that there should be immediate resignations from the Board by the responsible individuals. I am willing to negotiate an amicable departure by them because I believe it is in the best interests of the Company to do so. However, I can no longer stand by and allow these actions to ruin this Company and the shareholder value I have worked so hard to establish and grow.
9. Indemnification ---Anna, I do not know any particulars concerning the indemnification matter of which you speak. If you have been promised an agreement and it has not been forthcoming then this is just another example of incompetence and improper conduct. However, I believe that the Company’s standard form of contract includes an indemnification provision so you are probably already subject to an indemnification provision in your favour. I would be happy to discuss this matter further so that your concerns are addressed. However, again, anyone who has supported the improper conduct may have the same potential liabilities and may not have the benefit of indemnification, so it would be prudent for you to make your position clear. I would be happy to discuss this as well.
I am furnishing a copy of this letter to the other Board members as well in the hope that they will handle your requests appropriately and correct their improper conduct to date. However, appropriate measures will need to be taken if they do not do so.
Sincerely,
Lee Cole
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EXHIBIT 2
Gentlemen:
I am in receipt of the minutes of the so-called February 22, 2010 board meeting and the so-called March 15, 2010 board meeting. I will limit my response at this time but, the tissue of misstatements and improper behaviour in which you continue to engage is breathtaking.
The minutes of meetings which were, respectively, one month ago and one week ago, were delivered in an untimely fashion obviously intended to preclude proper review and response. Delivery on Sunday the day before a Monday meeting is clearly unacceptable and part of your pattern of intentionally obstructive conduct.
The minutes of the February 22 nd meeting state that you attempted to retain legal counsel and amend the Company bylaws. Once again, you have attempted actions without following appropriate procedures. Was a bylaws change considered and reviewed by the appropriate Board committee? Was engagement of counsel similarly considered by the appropriate Board committee? Has care been taken to analyze costs or conflicts of interest? Of course not; you persist in ignoring common sense and procedures as you continue unilaterally to take control of a public company without any reference or consideration for the company’s procedure and byelaws or the shareholders...
Also, one notes that you apparently have filed a Form 8K on behalf of the Company; quite an interesting development, given the damage that misstatements in that Form 8K caused the Company as it was filed without circulation to the Board for comment and due authorisation. Perhaps, in your continued selective disclosure and secret and improper decision-making you forgot these points?
Your self-serving and self-aggrandizing misstatements and actions continue in the same pattern. S,. How could you possibly state in February 22 nd minutes that “Mr. Cole had raised issues as to the validity of the January 7, 2010 meeting, but did not state any specific defect with respect to the notice or conduct of the meeting”? You have received lengthy written explanations of objections to that meeting, quite apart from our oral discussions, so it is appalling that you would state so blatant a falsehood as if making your untrue statement would somehow make it true.
The comments you make in the minutes about myself and audit matters at root are utterly false How can you suggest that I have not furnished financial information without acknowledging the numerous requests made to you for financial documentation in order to complete work on financials? Your failures to respond are documented. Your omission of these facts, and your refusal to furnish the relevant information, is all the more revealing in the context that we have repeatedly expressed our concern that you have inappropriately incurred substantial undisclosed liabilities in the name of the Company and otherwise.
However, if anything, those omissions by you pale in comparison to your brazen misstatement and mischaracterisation of dealings with the Company’s accountants. As we have repeatedly informed you (and as the record clearly shows), there was no problem with completion of the Company’s financial statements until you surreptitiously and (we believe) maliciously interfered with the audit process. You contacted banks directly, ignoring the CFO and the Audit Committee, acting upon misinformation and then, what is worse, conveyed that misinformation to the Company’s auditors again without reference to the proper channels.. Your conduct in this regard is all the more shameful given that it your statement to the auditors that a bank account did not exist was subsequently proven to be incorrect and based upon a misunderstanding which arose when you acted outside the companies proper channels and contacted the bank directly rather than through or even with the myself as CFO. You need only have asked the question and irreparable harm to the Company and its shareholders could have been avoided. Instead, you clearly persist in an effort to seek, establish and, if possible, exaggerate problems to distract attention from your own non performance rather than to take actions in the best interest of the Company and its shareholders.
Your efforts in the February 22 nd minutes to retroactively justify improper change of directors of Electronic Game Card Limited (which you initially undertook surreptitiously in December 2009 without any Board approval or discussion whatsoever) and to move accounts of that company failed to disguise actions which were so damaging to EGC. You were well aware of the underlying contracts which you have blatantly breached and yet you persisted in this conduct. You were warned repeatedly that you should not act in violation of contractual obligations and you chose to ignore the warnings and, thereby, incur liability for the damage to the Company and its shareholders. As if this were not enough, you ought to have known not to act to disrupt the company’s European business relationships without prior discussion with those who are the generating the business, particularly as they are the only ones generating any income for the Company . Your failure to act sensibly merely emphasises our concern that you appear to be motivated by an agenda that is not to the benefit of the Company or its shareholders.
With regard to the SEC, the statements in the February 22 nd minutes are deliberately misleading and false insofar as you neglected to mention the improper contacts by Mr. Donovan and Mr. Morgan with the SEC, in which the misinformation referred to above was apparently passed to the SEC, which have cause harm not only to the Company and its shareholders but to Sterling and Messrs. Cole and Boyne individually.
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We will respond separately to the statements concerning Sterling received yesterday, with whose efforts you have consistently interfered despite our repeated requests that you cooperate as required under contract, and your apparently malicious and false statements concerning myself . Obviously, you do not have appropriate authority to simply interfere with the performance of Sterling’s functions out of hand given contractual requirements. The suggestion to engage Mr. Schiff as a consultant or as CFO, given his earlier performance and this apparent improper engagement by the Co-Chairmen previously at an absurdly high cost and conflicts is unbelievable. Your continued repeated breaches, despite our best efforts to perform and our repeated requests for cooperation and proper procedure which you have ignored, can’t be justified.
Finally, the statement in the February 22 nd minutes you have made various unfulfilled requests for case studies, samples, etc. from the London office are patently false. In fact, the London office has provided numerous case studies, samples and pricings. The European business has been dealt with by Limited as provided under contract and confirmed, prior to his untimely demise, with Lord Steinberg, the past Chairman. Your statements are merely a smokescreen---and a poor one, at that---for the complete lack of performance by the U.S. operations and management.
Your misconduct continues to be reflected in the March 15 th minutes. Have new Board members actually been appointed? After review and approvals by what committee of the Board? .
Oddly, the March 15 th minutes appear to suggest that you did not remove myself as CFO at the so-called February 22 nd meeting after all and fail to mention my resignation or the reason for my resignation.
Once again, what process has been followed with regard to approval of a package with Anna Houssel? Clearly it has not been reviewed by appropriate Board committees. Undoubtedly someone would have pointed out that the unrealistically lucrative, budget-busting settlement is problematic for someone who made no contribution to the revenue or income of the company.
Yet again, the March 15 th minutes make false statements concerning myself. I have repeatedly requested information from the U.S. office since December, which has not been forthcoming and has repeatedly stated that the information was required in order to complete financial statements. After your failure to cooperate in timely fashion or at all, and your repeated and malicious interference in the audit process and incitement of the SEC, your assertions that I am somehow at fault are totally unacceptable.
The March 15 th minutes again make ridiculous statements by suggesting that the complete failure of the U.S. operations and management to generate a single order for any product in the last year can be laid at the doorstep of the London office which had generated all of the Company’s income. You statements that you have not had access to information are false and your attempt to excuse your total failure by blaming the only part of the organisation which has produced income is not credible..
I should add that Cole and I submitted our resignations as officers and Mr. Cole’s resignation as a director of the Company on March 1 2010 but have nonetheless attempted to continue to assist the Company in good faith, despite your misconduct and lack of cooperation, under the Sterling contracts. Why have you not disclosed those resignations, or filed the appropriate Form 8Ks by now? Why has an 8K concerning the resignation by Ms. Houssels not been filed? You continue to compound your misconduct to the ultimate damage of the Company and its shareholders, but also the individuals in question. Clearly, you have engaged in selective (and frequently improper) disclosure for so long that you don’t even feel the need to comply with any disclosure requirements.
Under the circumstances in which you continue to act so improperly I can’t lend weight to your behaviour and schemes by participating in meetings with you and can only propose that in the interests of the company and the stockholders that you both resign without delay.
In the meantime, I am copying this to the individuals who you have indicated are being added to the Board in order that they will not suffer from selective disclosure by you of information and asked to act without relevant information.
Very truly yours,
Linden Boyne
My take on this is Positive---as it sheds further light on the story. Seems to me Kevin Donovan is playing checkers while others are playing chess. The lateness of the last 8-K issuing the change in the Board of Directors, falls cleanly on the shoulders of KD as he was BOD Co-chair and CEO and did sign the 8-K that clearly was issued late. That alone will probably result in his Bye Bye Package if it ever comes to a vote.
Cash is there has been the mantra by LC and now he is specifying where it is at. LC gains nothing by lying at this point, so I put credence in the 8-K letters.
Will unfold slowly but this ugly catapillar will turn into a butterfly, Just watch.
So original board of five is now down to two. BOD Musical chairs.
Lose one more and there will be NO Disagreements possible.
good post ok----also to increase the authorized share count I believe you need a shareholder vote as well.
They are probably all doctors and do bucket shop trading in their spare time and Wednesdays are reserved for GOLF in the AM. LOL
Maybe nothing new, but nicely summarized and like it or not, we here are the gossip column, but a Motley Fool blog is the opinion page which right or wrong gets a little more street cred.
Just another affirmation of what I and others suspect.
Thanks for the link,. Lazy clickers, I copied below the blog post. I think it is very positive
ARTICLE from Motley Fool
Most of the great mysteries of investing revolve around the question of whether a given company is an instance of fraud or not. Electronic Game Card (EGMI.PK) is exactly that.
Until quite recently EGMI looked like a perfect example of a company that was poised to launch itself from the OTC market onto a big exchange and everyone's radar. The company had been growing earnings at a rapid clip and its valuation appeared to be extremely low. With $20 million in case on the books, a big buyback, no debt, revenues that had grown from $1M to $6M to $11M, and a bottom line that had gone from -$10M to $3M to $6M the valuation looked pretty cheap at a P/E of 15, given that it was in high growth phase. The company seemed to have promising leads in other international markets and a diverse and impressive list of minority shareholders. I for one was duped.
Then the wall came tumbling down. The SEC announced that it would suspend trading in the stock after the auditor withdrew its last three years of audits and stated that certain cash accounts could not be verified.
Later questions arose about the share count and potentially massive dilution. Many different class action shareholder suits were initiated, and two of the four remaining directors resigned.
What seems to have happened at this point is quite odd. One of the larger shareholders in the company was a Lord Steinberg, who made a fortune in illegal then legal casinos in England. It was also good for a peerage. Soon after he gained control of the Board and put in place an all new management team, he passed on. At first, when the price started to fall it looked like that perhaps it was connected to an overhang relating to his 20% or so of shares. Later there was more revealed.
Last week, the company issued an 8K in which it offered the resignation letters of Lee Cole, the former CEO in England, and an Anna Houssels, a new executive and VP on the US side. Anna's letter made many allegations including that she was not getting paid. Lee Cole's letter announced -- quite strangely -- that the money was intact and that the assets were all there. Cole also bitterly accused his US counterparts of spending wastefully and never generating any income. Now remember that Ms. Houssels had reported that she wasn't getting paid! This followed an announcement by the company that they were seeking ways to address a liquidity problem so that they could hire accountants and lawyers to get them out of their mess, an odd announcement given that they had reported having some $20M in the bank only a few months before. Also strange is that the company is announcing these resignations -- obviously material -- some two months after they were effective.
There are so many ways to spin the facts that it boggles the mind. But myself, I am leaning toward the side that there has been a bitter dispute within the company between an old and new guard, and that the old guard -- Lee Coles -- actually hid the money from the new guard after the new guard's protector (Lord Steinberg) croaked. I think further that the new guard may have contacted some unsavory promoters who helped to run up the value of the stock using their wicked ways. Now there is a crisis of management and many, many folks who will get a piece of the pie -- lawyers, bankers, accountants -- while the accounting statements are reconstructed and the lawsuits get settled. In the meantime, we wait while the money is found and things get slowly worked out and hope like hell that the cloud over the company does not damage their relationship with China Lot Synergy, one of the few legal lottery operators in China.
That is, I think (hope) that it's a buy at these prices. If the earnings numbers turn out to be trustworthy, then the trailing P/E at 2.17 is attractive indeed.
You are right that the audited statements are key to getting movement in the PPS.
However, given the storyline from the 8-K resignation letters, it is clear that the money and NAV is likely to be there..
So the timeframe is not that far away, less than a year (for his $1-2 forecast) is my viewpoint, as none of the players GCA, PriceWaterhouse, the heavy duty Law Firm etc are the patient type and are now in position to GIT R DONE, once the financials are recertified and you have first quarter 2010 earnings, things will go fairly quickly from this market price. SO the big guess is when will that happen, I say 4-6 weeks range given the management pissing match is now complete and NOW everyone is pulling in the same direction.
So the large shareholder is probably correct in his analysis. JMHO
Thanks for posting that from yahoo. I never know where the posts are on yahoo now that they have messages boards on EGMI.PK and EGMI.OB,
That post is pretty much right on the mark as far as how I think this will play out.
no volume, HOW About that, and with those 200 million shares out there that RAW claims, YOUDA thunk, somebody would be sellin. LOL
Guess this means most holding tight for MO Money and if you want to buy volume, you better pony up.
Should be a very interesting and telling week for EGMI as Friday was the first full day of trading based on the late after market Thursday issued 8-K which pretty much told the plot line for the management struggles. So the light of day shines on the history of the management conflicts. Investors, institutions and traders now have had a trading day and a weekend to assess what it all means.
I am optimistic but am reminded as a friend of mine told me, When a stock trends up, they take the STAIRS (chart goes up in stairsteps) BUT as we all now can attest, when they go down, they use the ELEVATOR.
I was once told by IR that the total authorized share count---authorized NOT meaning issued---was 100 million. To change that would require a shareholder vote, which we have not had.
I think that a more plausible explanation for how the market was acting is that many stockholders with less than 5% were trading (swing or day trading) a portion (perhaps a larger portion than you might believe/expect) of their portfolio on the way up.
To state that you have 200 million shares out there seems to me to be in the realm of conspiracy theory---particularly when the auditors and the issues raised by the the SEC Halt only focused on the cash. A share count error of the magnitute you suggest is far more serious than where is the $12.7 million and would have to involved fraud and conspiracy-which I doubt is the case.
I tend to look at the chatter and throw out the conspiracy theories on the negative side and the buyouts on the positive side and BELIEVE that the truth lies in the middle and the simplest of explanations are more likely to fit the facts. In this case, the management feud between KD and LC is at the core of the issue. I also believe $1.00 is possible in the PPS as with all the doubt this traded $.88 prehalt. Remove doubt, get audited statements, add clarity and while that is a lot of IF's (all possible I believe in the near term) the $1 does not seem out of wack with the facts. I am not counting on $10 or even $5, but if you believe the IFs, the dollar is in the cards (pun intended)!
The PPS road back to prehalt levels will not be smooth as with all the crap that drove this down, you have what I call the ICK or Disgust Factor that will make some just want to leave and not look back (emotional factor) and others that will/would prefer to see the cards on the table/PR announcement before getting back in---probably a wise move. The battle between FACTS and EMOTION will have an impact on the charts.
The management conflict was between Lee Cole and Kevin Donovan, with Anna being just ignored by both is my take on it. As long as KD had Eugene Christiansen on his side, he could hold out and eventually have his way. Infact, Lee Coles letter pretty much said he had no way to be effective because it was 2 votes against his one.
That being the case, I believe we now go forward as the conflict ends, NOW it is roll up the sleeves and get to work. KD surely assemblied with GCA a team to do so. My guess, is KD will get a nice goodbye package, new management will come in and if all goes well, we could have a Phoenix Rising Senario. All the large shareholders (stuckholders) will put pressure on to have an annual meeting and proxy to get things going.
First things first will have to be Audited statements, reissued and 2009. Once we get to deal with New Firm(er) numbers, this could be a winner for those with the balls to buy under a quarter. JMHO With certified statements, even RAWNOC, might start to Twitter, EGMI continues to Monster. LOL
I understand your situation, I just believe that this company will hit $1.50 or more, NOT the $3 it should have been, due to the cost of the issues that are to be resolved.
LC in his letter said EBITD from Europe would be something like 6-7 cents. Add other licenses and promotion and maybe USA lottery or Chinalot coming in, the the earnings trend, hic-cups but will be positive in EPS. Add IP, patents and the famous cash in bank, etc, YOU might do yourself a favor and analyze as we go along and not immediately trigger your 50c sale AS with a little patience you might leave with 50% profit as opposed to 50% loss.
My cost is 76c on a Sh*tload of shares. I am still hopeful from a NON Emotional viewpoint.
And if you think it will see 50c Then you understand why many newcomers are happy, And if you do not think it will see a dollar, then like I said, those that bought at a dollar are viewing this thru entirely differently tinted glasses.
And ROSE is not the color LOL
looks like it might be a million share day and would be nice if it closed at or near the high of the day.
If you read the LC Letter, the NAV is around 35c and still a going business. Plus you have IP and Patents, so that is the play from here.
Will take a little time for funds to analyze and determine if they want back in or initially in the game.
I understand Ian's position which seems contradictory. Like I once said on this board. To newcomers this is a multiple bagger in the making at these levels, Those in for $1 or more, not a phoenix rising stock, but an experience more like that of Icarus.
Once burnt twice shy and there are plenty of other ladies in the market to dance with that will not step repeatedly with glee on your toes while doing so. EGMI has left many with a bitter experience and it is HARD TO SHAKE that emotion, despite the fact ALL OF US know that to do well in investing, YOU Take the emotion out of the equation.
Probably a correct guess I think. As an addendum, while all are supposedly stubbornly fighting for what they believe is in the best interest of the company, ironically, they lose sight of the stockholder who takes it in the A** for 90% of the value of the company. SO Now for the victory and now KD comes riding in dressed up as a Knight on a White Horse to save us.
A Greek tragedy--I would have preferred a little less stubborn and an earlier compromise.
Like I said, always darkest before the dawn, and 17c is damn dark in my book.
Based on LC/AH letters and clarity, I would expect to see 30-40c today as the close PPS, but anybody's guess on the Greys.
How many stockholders here think it is time to sell at 17c or less, NONE is my guess.
ALSO posting here the amendment to bylaws in SEC Docs, SEEMS to me they want to be able to act quicker ---Works for me!!
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On February 22, 2010, the Board amended Article III, Section 3.07 of EGCI’s by-laws to provide that notice of any special meeting of the Board shall be given on 48 hours written notice rather than 10 days written notice. This amendment was effective immediately.
Letter from Anna, seems like personally written, I could be wrong but does not seem to be legalese---so maybe AH is not the blonde airhead she was made out to be. If letter is accurate she tried to be active and tried to fulfill her duties.
Pissing match, power grab, whatever you want to call it, the players in the resignation letters seemed to lay out the details far more than I thought ----script for movie or at least could be the start of the plot line.
No matter if the good guys won or not, ALL a matter of opinion, the GOOD NEWS is the squabbling is finally over and direction can begin for EGMI. How much of a hit this takes on the EPS is anyone's guess, I am more concerned that it is able to recover and the march forward is only delayed.
THE Hit on the PPS was dramatic, so if this clears the air and EPS takes a hit for 2010, but we are back on track with a cohesive plan and team---I will take that ---I am in this for the profit and value to my portfolio. I am more optimistic now since the SEC Halt.
Thank you Lee Cole for one of the most honest and forthright resignation letters I have ever read. To me it shows he cares about the company and just finally had to accept that KD won the power struggle (Fair or Not).
His statements in that letter clears the air and gives stockholders more confidence during the time the financial statements are re-certified.
Under pressure, one has to admit, Lee Cole is a class act. PPS today should be up and largely due to LC's resignation letter having so much meat in it.
HE should have drank more beer, KD obviously won the pissing contest. Thank you Lee Cole.
I take all this as a positive sign. Price Waterhouse is a heavy hitter CPA firm, Law Firm is as well. I still believe the money is there as I buy the theory that Lee Cole to prevent KD from spending it, moved it out of his control. So if that is the case, then the forensic accounting will exam the transfers and if it is still there then ALL the better.
This is in my opinion the start of a series of PRs that will roll out over the next month or so. Once financials are reinstated with an opinion then we get back to the question of the results of 2009 (remember CPAs pulled 2008 and prior statements opinion) and THEN is the business model/business intact to go forward with sucessful 2010 and beyond.
Always darkest before the dawn and a PPS of 17c is pretty damn dark in my book.
Tomorrows market reaction will tell you if todays low volume was because there were no sellers versus no buyers