Medinah Minerals (MDMN)

[easymillion]

Beth, NOT JUST ONE MAN's OPINION
The SBA may have had good intentions, but it was an unmitigated disaster and death knell for many smaller companies.

While it seems as though Sarbanes-Oxley has improved the quality and processes of corporate management, financial statements, and auditor independence, these benefits have come at harsh costs to companies. Furthermore, these costs have inadvertently impacted smaller companies more severely than larger companies.

http://live.econ.berkeley.edu/sites/default/files/Primack.pdf

Taken together, these results are consistent with the view that, on net, SOX Section 404 proved to be too costly for small firms.

http://php.scripts.psu.edu/users/p/g/pgi1/iliev-2010-jf.pdf

Sarbanes-Oxley Section 404 Places Disproportionate Burden on?Smaller Public Companies

While the SEC initially estimated the cost of complying with Section 404 to be $1.24 billion in the aggregate, multiple studies have projected the actual cost to be $35 billion, almost 30 times that of the original estimate.5 CRA International’s survey data indicates
5Hearings, The Sarbanes-Oxley Act 4 Years Later: What Have We Learnt? Subcommittee on Regulatory 5

that total year-one Section 404 implementation cost per company with market capitalization between $75 million and $700 million, known as a small accelerated filer, is $1.5 million, or 0.46 percent of its revenue; and that per company with market capitalization above $700 million, known as a large accelerated filer, is $7.3 million, or 0.09 percent of its revenue.6 A more recent estimate pegged the average cost of direct compliance costs and outside audit fees in 2006 at 2.5 percent of a company’s revenue.7
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Conclusion
Our analysis of Sarbanes-Oxley Section 404’s impact on public companies, especially smaller 404 filers, suggests that:
?Section 404 has imposed a heavy compliance burden for all 404 filers: 404 filers experienced a median increase of 66 percent in audit fee as a percentage of revenue from base year to the second compliance year, while non-404 filers only experienced a median increase of 9 percent during that period.
?Smaller public companies have inherent disadvantages in internal control over financial reporting, and 404 filers with ineffective internal controls were significantly smaller than those with effective internal controls in terms of market cap, assets, and revenue.
?Section 404 has placed disproportionately heavier burden on smaller public companies: 404 filers in lower market capitalization categories have undergone substantially larger audit fee increase. ?Specifically, our regression analysis demonstrates that:
?Company size measured by revenue or assets is negatively associated with percentage increase of audit fees from base year to the first compliance year.
?Being an S&P 500 company is negatively associated with percentage increase of audit fees from base year to the first compliance year, while that is the opposite for S&P 600 small-cap companies.
?Each additional material weakness in a company’s internal control structure is associated with a roughly 10 percent increase in the percentage increase of audit fees from base year to the first compliance year. ?Based on our statistical findings, we conclude that:
?Small and large public companies operate in different manners, thus the kind of internal control structure Section 404 requires to assess is not as necessary for smaller companies as for their larger counterparts.
?Section 404 has imposed disproportionate cost burdens on smaller public companies that exceed the benefits they could derive. ?We thus recommend that:?PCAOB should give a clear definition of “smaller public companies” that Auditing
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Standard No. 5 has referred to for scaled audits on internal controls, using revenue as
a complementary indicator for company size and complexity.?Congress should further consider amending Sarbanes-Oxley Section 404 so as to
allow smaller public companies to opt in and opt out of the requirements of Section 404. For those companies that choose to voluntarily comply with Section 404, they should be able to obtain scaled internal control audits that are proportionate to their size and complexity.
The Sarbanes-Oxley Section 404 is a regulatory failure in that Congress overreacted to the political pressure following the Enron scandal without adequately understanding the origin of the problem. It has generated tremendous unintended consequences that could possibly outweigh the initial problem it tried to correct. Congress, the SEC, and the PCAOB should take serious actions to alleviate Section 404’s side effect on smaller public companies’ competitiveness.

http://www.heritage.org/~/media/CDA/CDA_features/SOXCDAedited3.ashx
There are way too many articles commenting on the negative effects of SOX on small business to say the effects are "purely ancedotal" as you suggest. And if the foregoing referenced studies are too technical, there are numerous consumer articles that are not favorable to the effect of SBA on smaller start-ups:
http://www.usnews.com/usnews/biztech/smallbiz/sbw_home.htm
Additional transparency is a shared goal of those invested here. Management has dropped the ball on far too many occasions too count and has frustrated shareholders for far too long. Medinah will become fully reporting when revenues permit moving off the OTC exchanges.
Until then, it is what it is.
Invested in the Mountain...
And That's What Counts!
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