DD Support Board and Research Team

[1manband]

Its a Pink Non-reporting company. I realize all filings in that category are unaudited and such -- I would hope that doesn't mean companies can be less than honest in them, though

Unfortunately, that is far from the case. Because Pink Sheets has no regulatory authority whatsoever, many (if not most) of the so-called "filings" and "financial statements" posted there are incomplete and, at best misleading, and at worst are outright fraudulent.

For fully reporting companies that file with the SEC, there are a full set of regulations they are required to follow and their filings must abide by specific disclosure rules and be filed by a certain date. That includes the requirement that their financial statements are prepared under GAAP. If a Company reports under GAAP, you have a very high expectation that the financial statements are accurate and can analyze them as well as compare them against other GAAP reporting companies. Microsoft against Google, for instance. The Pink Sheet "filings" have no such rules. I have reviewed quite a few "filings" on Pink Sheets and almost every one is seriously lacking in adequate, much less full, disclosure. They seem to be including the information they want investors to see and hiding and not disclosing the stuff they don't. All of which leads to a very misleading picture of the Company and its situation, and does not provide anywhere near the level of information a real investor requires to analyze the Company and perform an adequate level of due diligence. Even worse, I can count on one hand the number of financial statements I have reviewed by non-reporting companies "filing" on Pink Sheets that even come close to GAAP standards. It isn't the fact that none of the financial statements are audited that is the problem - it is that these companies seem to be making up their own financial reporting standards and guidelines as they go along. GAAP financial statements are crucial, as they are a specific set of rules for presenting financial statements as well as determining valuations. So many of these Pink Sheet companies just affix an arbitrary valuation on their assets or income which present a seriously misleading financial picture. A person or company can't make up their own financial rules when reporting to the IRS, for instance, but on Pink Sheets, anything goes. That is how you get companies claiming billions in assets which, under GAAP, would be completely worthless, for instance, or reporting income from subsidiaries which they haven't even acquired yet. Both scenarios are not uncommon in Pink Sheet "filings".

Pink Sheets is not a regulator. They are a for-profit (and publicly traded) PR and quotation company. They do nothing to stop the dissemination and promotion of these obviously bogus filings. As long as the Company pays their bills to Pink Sheets (it costs money to post these filings on Pink Sheets - they charge the participating companies for the service), they seem to be allowed to make any outrageous claim and post as many incomplete and erroneous financial statements as they like. What is worse, is that many investors seem to think these "filings" are completely accurate and just as good as legitimate SEC filings and base their investment decisions on them.

I don't begrudge the Pink Sheets making a buck, but giving dishonest operators a green light and perpetuating an air of legitimacy through obvious incomplete or even obviously bogus disclosure and financial information is, IMO, wrong. If nothing else, I think Pink Sheets should at least inform visitors to their website what the "filings" really are, and no one, including Pink Sheets, is vetting them for accuracy and completeness, and nothing in any of the filings should be considered official or meeting any disclosure or GAAP standards, and therefore the filings should not be assumed to be accurate and cannot be compared against the disclosure and financial statements of fully-reporting companies.