Sykes...I mean HH -
You have proven that you don't have the ability to comprehend what I teach, as I only skim over short selling, to better help students its implications to a particular stock and the market in general. The rest of the course is about real investing, to which my guess is you know very little, but that is my opinion only based solely on your posts.
I do not teach them how to rip people off by driving a SP into the ground and, eventually, out of business in order to never need to cover short sells.
To the best of my knowledge, there are no Investment & Portfolio Mgmt classes at the local colleges. I teach at a 4-year University to both B.S and MBA students.
I won't waste much time with your nonsense today, as I didn't short the stock and have no reason to bash, instead would rather go out and enjoy the beautiful weather.
That said, for some reason I just can't help discrediting you every time a see one of your posts.
1) It's hard to answer your first question, because "taking cash to the bank" really makes no sense in a business. It's not like a direct deposit from an individual's paycheck, but will try to respond the way I think you meant it, with your limited accounting knowledge. Accrual accounting does not work the same was as cash basis, so I am not certain you will understand, but will try to keep it simple for you.
- Sales were $31m for nine-months-ending Feb28 vs less than $18M for six-months-ending Nov 30, over $13M in rev's in 3 months.
- A/R rose only $4M in that time frame. That in itself tells us that $9M net A/R came in during those three months. But I don't think you understand the life cycle of A/P and A/R, because if payment terms are 60 days, a company is collecting today what was sold 2 months ago. Nonetheless, I think you can understand the $9M difference.
- There was a total of $9.7M shares issued for consulting fees, loans (from RME, since re-paid), and advertising. This is not uncommon for a startup company. The beauty of it is that RME was re-paid "at cost." You know of any other startups that get that kind of funding (and probably why you, well shorts in general) are sweating about now. No toxic financing with dilutive convertible shares.
- When we now consider that there was over $10M in advertising on the income statement plus $2.8M in inventory deposits (since recovered since the acquisition of Dicon), and $2.8M in prepaid advertising on the cash flow statement, that adds up to $15.6M.
- The difference between shares sold (since re-purchased and retired through A/R coming in, so really a moot point, but will try to answer your convoluted accounting question anyway) and paid advertising, prepaid advertising, and deposits is a positive nearly $6M - Not bad for a startup, huh?
2) Next: I wouldn't dare waste the time of one of my E&Y colleagues, as the two I work with are a junior and senior partner, respectively. Unless, of course, you would like to pony up the $30K for 2 days work that they bill. Suffice to say, NONE of the Big 4 take on companies without a solid business plan and legitimate accounting practices, thus the use of Robison to clean up everything prior to hiring D&L. I just don't think you know how the Big 4 operate, but will not bother going into any more detail here.
3) As long as there are two or more people within any company willing to put their jobs and potential freedom on the line for the sake of greed and embezzling money from an employer, no audit, internal or external, can be 100% certain that no fraudulent activities exist. I refer you back to your Accounting 101 book, as they all contain a chapter on this.
- It is the job of both internal and external auditors to ensure a segregation of duties, in order to at least make it impossible for one person to both take orders, record the accounting entry, and cut the check. Again, check your Accounting 101 book for further explanation.
- Clean accounting opinions consist of both a spot check attesting to, that based on the spot check, the company in their opinion have conformed to all GAAP accounting rules, which would include inventory control, such as LIFO or FIFO.
- However, the most important verbiage found from outside auditors is their opinion of a company to continue as a "going concern" meaning there are no apparent risks that would cause, in the auditors' opinions, the company to cease operations, financial or other.
WANNA BET WHAT THE "GOING CONCERN" OPINION STATES FOR SPNG?
4) Anyone on this board can, and most probably have, read many articles blaming the short selling vultures as being the main culprits to help bring down Bear Stearns, Lehman Brothers, and as JPM is currently attempting to do to WMI, even after the illegal seizure by the FDIC. Not up front, as vultures are a bit like chickens in this respect, but once the CDS's and other derivatives began taking billions off their balance sheets, the vultures swooped in to clean up the marrow.
In summary: I get paid quite a hefty fee in schooling others the way I continue to do you, so I may soon need a name and address to send you a bill if your nonsense posts continue.
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