Expo Holdings Inc. (EXPH)

[Acc441]

Actually....JD and Glenn have labeled the $400K as Advances.

However....my opinion on the subject is that both the SEC and IRS take an interest in such..."ADVANCES".

What about the good old grandfather clause?

Nope....you see...according to EXPH filings....JD and/or Glenn repaid a large chunk of the "advance" 2nd qtr-2007 or 2008.. however within the time frame of the following quarter the two of them took ADDITIONAL advances which took the balance above what it was BEFORE the 'temporary' partial pay-back...and I believe the SOX act- section 402 prohibits any renewals of grandfathered officer loans.

SOX Section 402 ... the big question in my opinion is: Is "Personal Loan" defined in detail? Probably not.. which is why close attention is paid to advancing money to officers and exec's... generally speaking if a cash advance or use of company credit cards is used for business use/expense it's OK...if not... well then...it could be an issue.

Of course IRS interest in the matter would relate to whether or not the 2 whiz kids claimed the advances as income .

The bottom line in Expo's case is.... given the financial condition of the company.... Did JD and Glenn have the financial well-being of the company in mind by taking these "advances"? Or...given the financial condition of the company did JD and Glenn exhibit Reckless behavior by taking and not repaying these...*er*..advances?