Replies to post #10489 on Electronic Game Card, Inc (fka EGMIQ)

[pegasus1]

That's about the only big hole I see on the balance sheet without further investigation. Tough to fake cash. Auditors would've confirmed directly with banks on 12/31/08 values. They should have looked closely at the mark to market value of the investments, but unless they're actively traded securities or very transparent with audited financials, investments in private companies can be tricky to value.

I think Pontiac could be on to something with revenue recognition methods. Licensing fees and other revenues must be recognized as earned, not received. If a company that licensed technology from EGMI were to go bankrupt, there's no way to earn those licensing fees if the contract is worthless.

I really should revisit the audited 12/31 statements, particularly the notes and work forward through each quarter.

You're right though, if this winds up being a restatement that doesn't completely devalue the company, it could recover IF appropriate parties are held accountable and credible management and board are in place and IF they can re-establish trust. Not an easy feat to accomplish. Possible, but not overnight, that's for sure.