more interesting is this exchange...
It's not really an accounting question," Mr. Levine said. "First you issue the shares, then they become outstanding. You can't outstanding the shares and then say they're being issued."
Mr. Stoecklein passed the witness to Mr. Frizzell, who tried to come at the question differently without success.
"I think the witness's testimony, as I understand it, is you can't have something outstanding that hasn't been issued," Judge Murray remarked.
"We don't look at shareholders' or stockholders' brokerage accounts, Your Honor," Mr. Levine said. "And whatever the company authorizes to be issued, it only happens one time.
"The company makes an issuance, they have a board of directors, you know, approval and it gets issued once. We -- we don't audit or get into each individual stockholder's account."
Mr. Frizzell attempted to press on, but Judge Murray sustained an objection from the SEC lawyer.
"The gentleman's position is, he looks at -- you correct me if I'm wrong," Judge Murray began. "He looks at transfer documents that say 'issued.'
"He doesn't look in this bigger world that you're concerned about, shareholders, how much they say they own.
"He looks at actual records of where the company has issued securities through its board of directors. That's all he's concerned with.
"All this other shareholder stuff that you're aware of because of your clients, he only looks at the company's records and the transfer agent's. He uses the transfer agent to confirm that, as I understand it."
"That's exactly correct, Your Honor," said Mr. Levine.
CMKX has taken the position that it couldn't prepare its f\s cause of the nekkid shorties and the possiblity of trillions of shares out there. The auditor is saying, and rightfully so IMHO, that the preparation & audit of f\s concerns itself with, and only with, the issuance of shares by the company and confirmed by the transfer agent. Shares get issued only once and appear as such on the f\s. What goes on in the stock market and the whole world outside the issuance of shares by the company and registration with the transfer agent, is beyond the scope of an audit and therefore has no bearing on the f\s and therefore the filings. The Judge picked up on this it appears. Very bad news for CMKX IMHO.
Mr. Frizzell argued that he was just asking a general accounting question
Bullshit...lol
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