POST 59339 - BETTER PRESENTED.
The first post looks to compressed, here the new version.
I tried to read to the filings from 2011 and 2012 to find some answers to problems posted here on a regular basis.
1. $ 150.000.—owed to accounting firm.
Based on the last 10Q- filed December 2012 it reads:
An accounting firm that provided
services to the company obtained a judgment through arbitration that was confirmed by the Circuit Court in West Palm Beach for $150,000 on
August 25, 2010. On October 18, 2012, the Circuit Court in West Palm Beach issued a final judgment confirming the arbitration award to the
plaintiff in the amount of $153,781, plus interest at $4.75% from May 5, 2010 plus attorney fees and the Company recognized a loss on
settlement in the amount of $71,463 in the three months ending September 30, 2012.
CONCLUSION:
The way I do read that, the affair has been settled with an amount of $ 71.463.- and the
company realized a loss.
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2. Then we have those monthly payments to Starr Queens. Some posters here argued, that this is a loan from the company to the officers and argued, that based on SOX such loans are not allowed. (my remark: There are rules for exception.) First in the 10Q filing I have not seen any loans to the officers to the company, however what I Ifound is the following: E.G. mentioned in his allegations that he made monthly payments to an account with WF which belonged to the management. Well if so, then every payment must have an economic background and fully explained.
Reading the last 10Q I assume this could be the key to the case and if so, then it is fully reported and legal.
On March 6, 2012, the Board of Directors authorized the Company to execute a Convertible Revolving Grid Note for a principal sum of up to
$1,000,000 with CEO Barry Schwartz and President, Lisa Bershan. The Grid note bears interest at 10% per year and may be converted into
common stock of the Company at a conversion price of $0.0022 any time before March 6, 2013. Neither Mr. Schwartz nor Ms. Bershan has
advanced capital under the terms of the grid note as of November 14, 2012.
On April 30, 2012, the Board of Directors approved salary advances not to exceed $250,000 for each of Mr. Schwartz and Ms. Bershan in
2012. The Board of Directors requires that all salary advances are repaid in full before any transactions pursuant to the grid note are
consummated. The Company made salary advances to Mr. Schwartz and Ms. Bershan, which the balance of officer advances as of September
30, 2012 is $371,117.
Now on March 1, 2013 the company filed in an 8K
Section 1 – Registrant’s Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed in its Form 8-K filed on March 12, 2012 (the "March Form 8-K"), registrant on March 6, 2012, executed a Convertible
Revolving Grid Note (the “Revolving Grid Note”) for a principal sum of up to one million dollars ($1,000,000) with the Founders of the
registrant, Lisa Bershan and Barry Schwartz (the “Lenders”). Registrant currently owes no amounts under the Revolving Grid Note. On
February 26, 2013 the Board of Directors of the registrant authorized and approved the following changes and amendments to the Revolving
Grid Note:
Capitalized terms not defined above shall have the meanings set forth in the Revolving Grid Note. Except for the changes noted above, the
other terms and provisions of the Revolving Grid Note remain the same and reference is made to Convertible Revolving Credit Grid Note
attached as an exhibit to the March 8-K, and incorporated herein by this reference, for all other terms and provisions thereof. This transaction is
deemed a related party transaction pursuant to Item 404(a) of Regulation S-K on the basis that the Lenders also serve as the registrant's
principal executive officers and Directors of the registrant. Additionally, Mr. Schwartz and Ms. Bershan are husband and wife.
CONCLUSION: Maybe it is coincidence but what this could be is: M.S and Ms.B. loaned the company in form of a Grid 1 Mio $. (This money is owed by the company). On the other hand, the company gave M.S. and Ms.B. salary advances not exceeding $ 250.000 (each) however as the legal interpretation of the text is, the grid can only be called or converted if and when the advances are either paid back or balanced with the grid.
First: The transaction was fully reported with the SEC in their last 10Q in 2012 and is absolutely legal.
Second: I could give 2 or 3 versions of what thoughtS may be behind this transaction. Not unique per see on the contrary have seen this with other companies as well.
Third: E.G. when he signed this up OR the payments to the Starr Account, he must have known the legal background and therefore his “late” allegations make him to a laughing stock. Every accountant knows, that for every transaction you need the evidence (economic background) and especially in this case as the payments took place on a monthly basis, the remarks for the reason why were 100 % given.
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Of interest however in the struggle to put blames left and right, AAPT filed in 2011 a clear text with the SEC and this was signed by Schwartz. WHEN READING THIS THEN IT IS CLEAR: THE COMPANY and its Ceo WAS AWARE OF being not up to date with the standards and rules and reported this to the SEC. How does it then come, that E.G. in 2013 points with the finger towards the CEO?
I have not seen any letter from E.G. to the SEC where he points his fingers of such findings, nope, he did it in a letter to shareholders (his buddies).
Schwartz always can come an say: I did what has been requested by law and even stated it in the filings and I even stated that we are working on a solution to bring the house in order. But of course it is not that easy when you have a crooked controller who is playing a fools game. Or as Schwartz was quoted by the press:
“Let me answer all those questions with a simple answer,” he said. “All the filings sent to the [U.S. Securities and Exchange Commission] were factual. And Eric Grushkin, before he became a disgruntled employee, was responsible for those filings.”
AND HERE A COPY OF WHAT HAS BEEN FILED WITH REFERENCE TO BEING NOT IN COMPLIANCE WITH THE REGULATIONS AND RULES. CLEARER YOU CANNOT STIPULATE IT:
Evaluation of Disclosure Controls and Procedures
As of September 30, 2011, the Company carried out an assessment under the supervision and with the participation of our Chief Executive and
Principal Financial and Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act
Rules 13a-15(1) and I 5d-15(1)). Our Chief Executive and Principal Financial and Accounting Officer concluded that the Company's disclosure
controls and procedures were not effective as of September 30, 2011.
Material Weaknesses and Related Remediation Initiatives
Set forth below is a summary of the various significant deficiencies which caused management to conclude that we had the material
weaknesses identified above. Through the efforts of management, we have developed a specific action plan to remediate the material
weaknesses. We expect to implement these various action plans during 2012 and anticipate that all control deficiencies and material
weaknesses will be remediated by December 31, 2012.
We did not effectively implement comprehensive entity-level internal controls and did not maintain a sufficient level of resources within our
accounting department, as discussed below:
???
Remediation of Internal Control Deficiencies and Expenditures
It is reasonably possible that, if not remediated, one or more of the material weaknesses described above could result in a material misstatement
in our reported financial statements that might result in a material misstatement in a future annual or interim period. We are developing specific
action plans for each of the above material weaknesses. We are uncertain at this time of the costs to remediate all of the above listed material
weaknesses, however, we do not believe these costs will be significant and we expect to ratably incur the remediation costs during the year. We
cannot guarantee that the actual costs to remediate these deficiencies will not exceed this amount.
We believe that we are addressing the deficiencies that affected our internal control over financial reporting as of September 30, 2012. Because
the remedial actions may require hiring of additional personnel, and relying extensively on manual review and approval, the successful
operation of these controls for at least several quarters may be required before management may be able to conclude that the material
weaknesses have been remediated. We intend to continue to evaluate and strengthen our internal control over financial reporting systems.
These efforts require significant time and resources. If we are unable to establish adequate internal control over financial reporting systems, we
may encounter difficulties in the audit or review of our financial statements by our independent registered public accounting firm, which in turn
may have a material adverse effect on our ability to prepare financial statements in accordance with GAAP and to comply with our SEC
reporting obligations.
•??Financial Close Process . The Company only prepares financial statements on a quarterly basis which increases the potential that any
unusual activities or transactions will not be detected on a timely basis.
•??Cash Disbursement Process . Payments to related parties and costs incurred by the Company were not subject to review and approval
by independent parties which increased the potential that any improper distributions would not be detected on a timely basis.
•??R eporting Deficiencies . We did not perform timely and sufficient internal or external reporting of our progress and evaluation of
prior years
IF YOU GO THROUGH THIS POINT BY POINT AND ESPECIALLY THOSE WITH A ?? THEN ONE REALLY HAS TO WONDER WHAT E.G. DID THERE THE WHOLE DAY? TO GIVE CREDIT TO SCHWARZ: HE REPORTED THE WEAK POINTS AND SIGNED FOR – AND WHAT DID E.G. EARLY 2013 …..WELL YOU KNOW THE STORY.
AI
