Were you shocked by today's PR that the "audited" financials released June 4 were not, in fact, audited?
Would you now agree that the "controversy" was appropriate? Would love to have been a fly on the wall in the discussions between the "Accountant or Auditor," Mr. Klein, and Mr. Henthorn, since the June 4 PR.
I am personally looking forward to the upcoming "audited" financials, for detailed review. One of the things I noticed about the Q1 financials was that the new results for 2012 showed losses in each of the four quarters. That wasn't a surprise, given the even larger losses in 2013 -- but what was interesting was that the quarterly loss in each quarter was exactly the same!!! The odds of that happening by accurate accounting is nil, so not sure how the auditor will be able to express an opinion on 2012.
For those who want to follow along, go to the Issuance History, STATEMENT OF SHAREHOLDERS/STOCKHOLDERS EQUITY, second column from the right.
For those who have praised the historical profitability of this enterprise, and believe the new financials, this column shows that the company has lost almost $5M since September, 2011 (the previously announced $1.2M 'adjustment' in Q4 2011 has ballooned to $2.9M) and $2M in the last ten quarters.
And that assumes you believe the almost $3M of 'intangible' assets remaining on the balance sheet. As the biggest number by far on the balance sheet -- other than retained deficit -- hope there is a note in the promised upcoming audited financials discussing this account, there wasn't in the recently released financials. Can you imagine -- a note to talk about $126K of 'fixed' assets, but nothing to talk about $2.9M of 'intangible' assets, when those assets are the only thing between positive book value and negative book value.
Although, worth a note on the fixed assets. The June 2013 financial report showed Dec 31 2012 fixed assets at $784K and Jun 30, 2013 fixed assets at $451K; this report shows Jun 30, 2013 fixed assets at $212K and Mar 31 2014 FA at 129K. That's a reduction of 85% in five quarters!!! The note says that these assets are related to the kiosks, therefore this 'depreciation' should be flowing through the P&L. This also suggests (but not definitively) that equipment from the five stores closed in the last couple of years was not of sufficient quality to transfer to the new stores in SW Florida.
