CyberKey Solutions fka CKYS

[slorke]

>>>> NEW! CKYS PR! THUR 3/15 8:44pm

http://www.marketwire.com/mw/release_html_b1?release_id=227406

CyberKey Solutions Own Internal Investigation Uncovers Improper Accounting and Reporting Practices as Investigation Continues by the Securities and Exchange Commission

ST. GEORGE, UT -- (MARKET WIRE) -- March 15, 2007 -- CyberKey Solutions, Inc. (PINKSHEETS: CKYS) announced today that initial results of an internal investigation indicate that a certain company official has utilized improper accounting methods and reporting procedures while handling critical company contracts. CyberKey's accounting and reporting of certain matters may be in violation of the practices governed under securities laws.

Numerous material errors have been recently discovered regarding the Company's accounting for revenues received and accounts receivable generated, and corresponding payables made, pursuant to the fulfillment of a third party contract which the Company reported last year to have been secured with the Department of Homeland Security (DHS). In November 2006, the Company began to discover information which indicated that this contract was not directly with DHS but instead with a third party distributor that was representing it was having the Cyberkey products delivered directly to DHS facilities in different locations. The Company has discovered that none of the products supposedly sold to this third party distributor had been delivered to DHS as had been represented repeatedly during 2006. And, it appears that none of the revenues from this contract ever were realized by the Company since this third party distributor apparently circumvented the Company's relationship with its manufacturer in China and secured direct payment and delivery of the Cyberkey products without paying Cyberkey anything. This contract represented the then-reported core revenue stream of in excess of $20,000,000 for the Company for 2006, and a corresponding operating profit exceeding $12,000,000.

As of last week, CyberKey's comptroller notified the company's attorney that the financial statements for the last five quarters could not be relied upon as she had improperly entered financial data into the accounting system and had forged critical documents and other material information. She was removed from her position last week.

CyberKey has engaged an independent certified public accountant firm to undertake a comprehensive audit of its financial statements for the past 3 years. All financial matters will be audited and fully reportable when complete.

"I am deeply troubled by the findings related to the accounting practices of our company," stated Jim Plant, CEO and President of CyberKey Solution. "I apologize to our shareholders and the investment community for these problems, which happened on my watch but without my knowledge. I am fully committed to resolving all remaining issues as quickly as possible and to putting the proper remedial measures in place to ensure that this never happens again. We will be releasing corrected financial statements as soon as practicable. We will be updating the investors through our website as more information becomes available."

The company has announced that it is working diligently to develop new contracts with various government agencies and has not changed any of its operational activities, highlighted by its participation at FOSE 2007 booth number 1617 on March 20-22, 2007, in Washington D.C... CyberKey plans to showcase its latest products and solutions to thousands of Federal, State and Department of Defense Agencies -- and will provide interested buyers with a means of initiating government purchases directly from the EXPO via the Department of Defense Emall and directly with the company's GSA partner "Alpha Data Corporation," that will be present at CyberKey's display at the Expo.

About CyberKey Solutions, Inc.:

CyberKey Solutions, Inc., based in St. George, Utah, partners with industry leading manufacturers and distributors to deliver secure USB drive-based solutions to vertical markets and content owners, service providers and resellers. CyberKey's solutions solve real world issues in the entertainment, education, government, military, automotive, financial services and medical industries. CyberKey Solutions' technologies allow users to securely transfer large amounts of data, files and applications software from one electronic device to another while employing a patent pending USB-based Digital Rights Management process. CyberKey's solutions create new opportunities for existing industries and applications. For more information, please visit their website at www.cyberkeysolutions.com.

Statements contained in this news release, other than those identifying historical facts, constitute 'forward-looking statements' within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions as contained in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relating to the Company's future expectations, including but not limited to revenues and earnings, technology efficacy, strategies and plans, are subject to safe harbors protection. Actual company results and performance may be materially different from any future results, performance, strategies, plans, or achievements that may be expressed or implied by any such forward-looking statements. The Company disclaims any obligation to update or revise any forward-looking statements.

To automatically receive instant updates, press releases, and other information on this and other Big Apple Consulting USA companies, please visit www.bigappleconsulting.com/compro.php and download your FREE copy of Big Apple ComPro.







--------------------------------------------------------------------------------


Contact:
Investor Relations
1-866-THE-APPL(E)
http://www.cyberkeysolutions.com


SOURCE: CyberKey Solutions, Inc.