Plastic2Oil Inc (PTOI)

[Artiztic1]

More restatements coming to a home near you, I'd bet on it.

Almost two years after purchasing the huge money losing business named Pakit (Pakit had over 2 million in net losses in 2010), their still working to limit deficiencies by consolidating Pak-It’s product line, and developing an internal computer network to host the new accounting software = more expenses, possibly even bigger losses and more restatements coming soon.


The Original 10K:

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2010. Based on this evaluation, our principal executive officer and principal financial officers have concluded that there exists no material weaknesses in its internal control systems that impact our ability to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules.www.sec.gov/Archives/edgar/data/1381105/000121390011002119/f10k2010_jbi.htm

Amended yesterday:

"Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2010. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules."....

These material weaknesses are a result of a lack of policies and procedures, with the associated internal controls, to appropriately address routine transactions, as well as a lack of a sufficient number of qualified personnel to timely account for such transactions in accordance with U.S. GAAP. Management has identified the following groups of control deficiencies, each of which, in the aggregate, represents a material weakness in the Company’s internal control over financial reporting as of December 31, 2010.

These deficiencies exist within Pak-It, which was a private company prior to being acquired by the Company, and not subject to audits or policies and procedures that necessitate being a public company. These deficiencies in internal controls resulted in the recording of numerous audit adjustments and delayed our financial statement closing process for the fiscal year ended 2009. The Company has been working towards eliminating these deficiencies by instituting new policies, procedures, and accounting systems. However, to the extent these deficiencies continue to exist, the accuracy and time lines of financial reporting may be adversely affected.

The significant deficiencies related to Pak-It’s internal control systems are from an inadequate design for internal processes related to the gathering and inputting of sales and purchasing information, and the relay of such information to operations, shipping and receiving. The work environment and organizational culture of Pak-It was considered unsatisfactory by the Company, with regards to the internal control reporting standards imposed on public companies, and more specifically imposed pursuant to the Sarbanes-Oxley Act. Pak-It’s organizational culture and computer software did not foster an environment where supervisors or controllers could be held accountable for specific transactions or operational initiatives. The largest component of this deficiency was in Pak-Its accounting and order-tracking software, which was a DOS program developed in-house at Pak-It during the 1980s. Pak-It has now, as of April 4th 2011, gone live with a new accounting software package that will enhance accountability and efficiency in purchasing, receiving, operations, sales, inventory management, and shipping. The Company is also working to limit deficiencies by consolidating Pak-It’s product line, and developing an internal computer network to host the new accounting software, which will provide the appropriate access levels for designated job positions.

Management acknowledges its responsibility for internal controls over financial reporting and seeks to continually improve these controls. In order to achieve compliance with Section 404 of the Sarbanes Oxley Act, we are performing system and process documentation and evaluation needed to comply with Section 404, which is both costly and challenging. We believe our process for documenting, evaluating and monitoring our internal control over financial reporting is consistent with the objectives of Section 404 of the Act.

http://www.sec.gov/Archives/edgar/data/1381105/000121390011003733/f10k2010a1_jbi.htm