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We know next to nothing. At this point, putting one possibility on the table does not take the others off.
Deal appears to begin in 2006 Press release, egmi and Santa Ana Star Casino
http://www.casinocitytimes.com/news/article/electronic-game-card-santa-ana-star-casino-sign-deal-159994
If it is uncollectable it will affect the health of the business ... and the assumptions that investors should make when weighing the value of the business. We do not know what the cash assets are right now, Sovereign was supposed to be a part of that, whether they are or are not ... I don't know.
EGMI is now preparing its next report and in the last qtr, the transcript states "This quarter we recognized revenues from our two license deals with Sovereign Game Card, our native American casinos-focused licensed distribution partner, and Scientific Games." See transcript as provided by chancetosee http://bb.us.advfn.com/boards/read_msg.aspx?message_id=43664055
Also EGMI press release dated Feb 5, 2009
states "The initial contractual requirement by Sovereign Game Cards, LLC (“SGC”) was received by Electronic Game Card on December 31, 2008". It also states, "EGC will receive minimum royalty fees of $1 million during the first twelve months following commencement of the contract" ... Was this later payment what the transcript was referring to?
http://www.electronicgamecard.com/Investors/PressCenter/PressRelease090205.aspx
"Date of Report (Date of earliest event reported): February 12, 2010"
I agree with AB.
Top of 8K clearly records 2010, not 2009. What are the odds of a coincidence that the 8k happens to be reported on FEb 12, but 2010, and the event also just so happens to occur on same day, Feb 12, but 2009? Certainly possible, even though it makes no sense. Nonetheless, I'd bet on it being a typo.
A problem with Sovereign-based revenue would have a direct relation to today's balance. That might automatically trigger an inspection of historical revenue.
Also,Tak Shun orders and EGMI claimed revenue begin around this time. See http://seekingalpha.com/instablog/582827-mattberry/55255-difficulty-reconciling-egmi-revenue-with-outsourced-orders-electronic-game-card
I have no position in EGMI at this time. I'm having difficulty confirming the revenue stream for 2006 and 2007. See above link.
I have put AB and ChanceToSee's comments on the table for consideration, but have yet to find concrete evidence of another manufacturer for the game cards during 2006,2007. It is possible that Tak Shun's statements are incorrect or incomplete. There are other possibilities as well -- such as another manufacturer somewhere.
The game now, in my opinion however, is to hunt for assets, confirm them externally, and if there are any that can be affirmed with a large degree of confidence, find out how much they are worth. Then you will have some confidence in how much egmi is worth if an over-reaction happens at the resumption of trading. If there are no assets or revenue, then ... I guess each of us will have our own stategies here.
I stopped DD with Sovereign's apparently operating out of a Condo, prior to that I could not reconcile Tak Shun revenue from EGMI's orders with EGMI's declared revenue for 2007. Someone might follow through with this however and find/provide evidence that places confidence in the revenue stream. Although my DD is now elsewhere, I keep checking back here to see if anyone has uncovered anything new in regards to assets and revenue, from external sources. If I had a position right now, my dd would focus on the assets and past clients/manufactures (attempt to verify some revenue).
"my only thought about Sovereign is that they just started in 2009. Why would EGC have to amend statements back to 2006 if it had anything to do with Sovereign."
Sovereign constitutes a portion of EGMI revenue. Any failure on their part would have a direct impact on game card's cash balance. Link:
http://seekingalpha.com/instablog/582827-mattberry/55326-does-sovereign-game-card-work-out-of-a-condo-apt-pre-foreclosure
I could not reconcile egmi reported revenue with the game card manufacturer or find another manufacture during the relevant time period. Link: http://seekingalpha.com/instablog/582827-mattberry/55255-difficulty-reconciling-egmi-revenue-with-outsourced-orders-electronic-game-card
"I just read things in more detail and I'm not sure Sovereign could have anything to do with it. Unless I'm missing something it all comes down to an account listed as an asset by EGC in the UK. What worries me is that they might not have this cash and that's wny they have never done a buyback especially at these levels."
RE: NEW YORK, NY/LONDON – February 5, 2009
>>The initial contractual requirement by Sovereign Game Cards, LLC (“SGC”) was received by Electronic Game Card on December 31, 2008. This triggered the start of the five-year, exclusive distribution contract to Native American Gaming territories by SGC for a minimum aggregated royalty payment of $10.25 million to EGC over the period.<<
"Was this not the case?"
Good question. Did sovereign game card work out of a condo? Was it in pre-foreclosure recently?
http://seekingalpha.com/instablog/582827-mattberry/55326-does-sovereign-game-card-work-out-of-a-condo-apt-pre-foreclosure
Problem may have begun before LS. EGMI claims revenue from Sovereign Game Card and Sovereign Game Card may be operating out of a condo and may be in pre-forclosure.
http://seekingalpha.com/user/582827/instablog
"I dislike myself for even thinking something like this possible. I had,and still have, sooo much faith in LS. And I'm 99.9% positive that he couldn't have had control of that bank account and been buying all those shares from this account. I ask everyones' forgiveness for even having this thought, and most of all from LS."
Yes, that is a possibility -- as is a difference between claimed and actual revenue. Both belong on the table for consideration, along with the other possibilities. The existence of one possibility, at this point, does not eliminate the other.
Of course, I can't draw a conclusion from an absence of evidence, even where I think I should have found evidence. I was merely adding one more possibility to those presented by Gorilla.
"One possibility, as I alluded to before. It costs money to design the cards and the individual promotions for each client, which is why they sell for a buck even though it costs 5 cents to manufacture. Basically, clients outsource this portion of marketing to EGMI. That's my guess."
A possibility, but that still does not explain apparent decreasing orders of electronic game card as electronic game card revenue is apparently ramping up.
http://seekingalpha.com/user/582827/instablog
Other manufacturers for 2006, 2007 would perhaps explain this. But I could not find any for these time periods.
Bank balance doesn't match because of honest mistake, because of embezzlement, because of red tape, or because claimed revenue wasn't earned.
Just joined seeking alpha today -- first blog http://seekingalpha.com/user/582827/instablog
first posted this dd here a couple of days ago http://bb.us.advfn.com/boards/read_msg.aspx?message_id=46746289
Maybe there's another possibility, anyone?
There's another option too. Revenue.
"1. Could it be that the company didn't issue a press release because the amounts were immaterial?"
"2. Another option is embezzlement. "
3. Didn't earn the claimed revenue, so cash balance doesn't match up.
Other possibilities?
Just looking at those margins ...
Does Sovereign game card work out of a condo/apt?
http://sovereigngamecard.com/?page_id=4 find address of sovereign game card, Principal and CEO: Tom L. Darwin
then google address http://www.google.com/#hl=en&safe=off&q=3235+E.+Camelback+Road%2C+Suite+121+tom+darwin&aq=f&aqi=&oq=&fp=7adeff1d0ed08cc0
Links 2 and 3
Sovereign Game Card » CONTACT US3235 E. Camelback Road, Suite 121. Phoenix, AZ 85018. Office: 602 999-6855 ... Principal and CEO: Tom L. Darwin V.P. Operations: Jana R. Adkins ...
E Camelback Road in Camelback Fountains , Phoenix-Camelback East ...3235 E. Camelback Road, Unit: 121, Tom L Darwin, Camelback East, -, $205000. Jan. 12, 2006. Condo, 3235 E. Camelback Road, Unit: 205, Ivan Braverman and ...
Google camelback fountains ... follow links
or try http://www.phoenixcondomania.com/CAMELBACK-FOUNTAINS.php
My emails to sovereign a few days ago were returned undelivered.
Of course there are lots of home office businesses, but if true, this does alter my perspective a little.
I had difficulty matching up tak shun orders with egmi revenue ... or get solid answers on the following.
http://bb.us.advfn.com/boards/read_msg.aspx?message_id=46764947
http://bb.us.advfn.com/boards/read_msg.aspx?message_id=46746289
Looks like 1 million from manatuck to steinberg, just by looking at amounts and timing.
07/17/09 STEINBERG LORD LEONARD Purchase 1 Mil $1.10 1.10 Mil
07/16/09 MANATUCK HILL PARTNERS L L C Sold 1 Mil $1.10 1.10 Mil
source:http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=EGMI
Ok I get it, and you were right it does appear to be an increase in shares
Total share count at egmi increases at a faster pace than tricadia’s increase in share purchases, making its proportion less, but it is still an increase in shares.
Not exact numbers but egmi outstanding was roughly
08 about 57 million
Now about 70 million
from 5.6% to 5.14% is a decrease in shares
thanks chance and ab. I'm still having difficulty seeing how Tak Shun claims revenue of $192,188 in 2007 from egmi orders and egmi's declared revenue being 6 mil in 2007. (see original post) There must have been another outsourced manufacturer in 2007. Either tak shun's statements are not right, game cards not right, there's another manufacturer out there for one of our past clients, or there's some mistake in my thinking here somewhere.
I'm trying to get a grip on who might have been the manufacturer to take up the slack in 2007 and who was the client.
OK, found CC - they didn’t use word “manufacture,” but “produce”
Roger Holdom: Sovereign will produce, market, sell and distribute Electronic Game Card units meeting EGC and Gaming Laboratories International GLI, the manufacturing standards for both security and robustness.
http://seekingalpha.com/article/105677-electronic-game-card-inc-q3-2008-earnings-call-transcript?page=-1
Also, found that Scientific Games was supposed to manufacture their own too. Same link above. But of course, Scientific Games is dead in the water.
Thanks for the tip, AB.
re:"For the most part, the answer is yes. However, management recently indicated somewhere (I don't recall where)" -- do you remember whether it was an SEC document or a CC or ... ? What kind of communication?
"Which makes me wonder how they go about maintaining the strict manufacturing regulations that the Indian casinos demand, keeping in mind that the casinos only tested and approved the product as manufactured and delivered from Tak Shun." -- I'm fine with another manufacturer, but would like some sort of concrete reference.
Answering your question about pps and itemizing red flags will just add unnecessary negativity. Key issue at this price is the reported revenue/earnings stream. How reliable is it?
Lots of red flags, but I could overcome them (at this price) IF I could match revenue up with outsourced production.
Looking for other manufacturers besides Tak Shun. Anyone?
http://bb.us.advfn.com/boards/read_msg.aspx?message_id=46746289
http://www.takshun.com.hk/ link to tak shun (somehow I got a comma at the end of the link in the previous post).
should be http://www.takshun.com.hk/
From Superb Summit International Timber Company Limited (Formerly known asTak Shun Technology Group Limited)
“During the Year, the sales of electronic game cards recorded HK$1.5 million or 0.2% of the Group’s turnover (2006: HK$3.6 million or 1% of the Group’s turnover). The decrease in sales of electronic game cards was due to the reason that Group’s customer had re-arranged its sales network and cut down its orders from the Group.” http://www.irasia.com/listco/hk/superbsummit/announcement/a26695-e01228.pdf (page 13)
Orders for the manufacturing of electronic game cards apparently decrease from 2006 to 2007. It is difficult to imagine each client of egmi finding its own manufacturer, bypassing Tak Shun, but I’ll ask anyway, Does anyone know of other manufacturers? Or does anyone have additional information that might set this in perspective?
I have not found another manufacturer (besides “Tak Shun”) mentioned in EGMI’s 10ks. (1)
Roth also states that Tak Shun is the manufacturer of game card. (2.)
orders from game card according to above statement in US dollars
2007 -- $192,188.55 USD USING DEC 07 EXCHANGE RATE
2006 -- $462,868.62 usd using dec 06 exchange rate
I used http://banqueducanada.ca/en/rates/exchform.html to find the exchange rates for these years.
You can also find the document by going straight to Tak Shun’s web page http://www.takshun.com.hk/, click on investor relations. Follow links to “Results Announcement (in PDF)” 2007.
Tak Shun apparently changed its name to Superb Summit International Timber Company Limited.
Does anyone have any additional information to shed some light on this?
(I have no current position in EGMI.)
1. Our principal suppliers are the manufacturers of the EGC Gamecard with whom we have contractual agreements designed to ensure quality control, security, competitive pricing and on time delivery. These include packaging arrangements. Our largest supplier is Tak Shun Technology Group ("Tak Shun") based in Hong Kong which is the manufacturer of our EGC Gamecard,. Tak Shun has the capacity to produce 500,000 EGC Gamecards per day. Our other suppliers are software specialists, independent quality control advisors, game designers, and artwork designers. http://sec.edgar-online.com/electronic-game-card-inc/sb-2-securities-registration-small-business/2004/05/13/section10.aspx
2. Roth: Outsourcing: Electronic Game Cards currently outsources the production of its GameCards to Tak Shun in China. As a result EGMI has limited control on the manufacturing process and related costs. Should this factory be unable to deliver GameCards in reasonable time manner, malfunction or be unable to keep up with new demand it would have a negative effect on EGMI's current and future earnings. http://www.electronicgamecard.com/LinkClick.aspx?fileticket=jARd9YoyMss%3D&tabid=105&mid=465
Who besides "Tak Shun" (aka SUPERB SUMMIT INTERNATIONAL TIMBER COMPANY LIMITED) manufactures electronic game cards?
Do all clients receive their cards (including iquiz) through "tak shun"?
Raw, you sold out position in egmi? Or, did you mean something else?
Rawnoc: "(No position)"