Replies to post #75395 on Expo Holdings Inc. (EXPH)

[Stock_Barber]

Are you saying that the 2 principals took "loans" from the Company? If so, when and how much? If true, uplisting could be an issue IMO.

Perhaps the 2 principals should read the SOX act- specifically section 402. "Section 402 of the act makes it unlawful for any public company, directly or indirectly, to extend credit,MAINTAIN credit or arrange for the extension of credit in the form of a personal loan to or for the benefit of any director or executive officer....."

Has anyone ever researched the SOX act and its applicability to these loans?

[Santa Barbara Broker]

Acc...the specific term "shareholder advance" was used. I am reasonably certain the attorney they used in setting up the shell was advising them at the time and used that term to circumvent any possible improprieties or at least allow them an "out" if anything came up. The "shareholder advances" which were disproportionately distributed to Brown (est approx 36%) and Harrs (est approx 64%) were issued almost as the ink dried on the new incorporation papers. This is overwhelming evidence IMHO that the sole purpose of forming the corporation was to compensate Harrs and Brown for the losses suffered by D&D Displays in 2005. Overwhelming becomes an understatement when you compare the amount of the "shareholder advance" as it first appears on an Expo Holding balance sheet issued for June 2006 ($ 346,606.00) (PGs 4 and 13):

http://investorshub.advfn.com/boards/post_reply.aspx?message_id=52387628

to the actual losses suffered by D&D Displays in 2005 ($347,544.00) (PG 5):

http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=12800

These "advances" continued to climb to $378,382 by 9-30-2006 which could have indicated interest was accumulating for the OFFICERS as part of their agreement (the interest was accumulating on the actual loan taken out by the company at a rate of $10K per month) (NOTE H, PG 12):

http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=12800)

which if compounded would add up about right at $31,776.00) or that the officers were continuing to "draw" on their "advances" as if EXPH was their personal ATM. (PG 4, 13):

http://www.otcmarkets.com/otciq/ajax/showFinancialReportById.pdf?id=9374

The total shown on the advance in the 10K from 12-31-2006 was then lower three months later at $75K +/- and at $352K a year later 12-31-2007, which may have indicated, like you have stated, that the officers were paying it down somewhat or that it was renegotiated or being excused through some slick "agreement" granted by the foxes guarding the henhouse via the BOD, at a rate about the same as the interest that was accumulating. Even if either of those scenarios were true, something obviously changed in 2008 as the advance stood at $253,923 - Harrs, $143,742 - Brown (total $397,665) by 12-31-2008 and at a total just a tad higher ($399,117) 12-31-2009 which was around the last time anything was heard about the advances. They obviously stopped either paying them down or tapping them...so what is their scurrent status?

One might suppose at the beginning of 2010 with the then much greater scrutiny being focused on the company from this board and other venues, it did leave Brown and Harrs between a rock and a hard place as to how to dispose of the principal of the loan forever. I am certain they wanted it gone so they didn't have to explain it away anymore. What to do...sell off their shares into the 2010 run up knowing that an additional 1.33 billion shares were about to be dumped into the A/S count and pay off the "advance" principal leaving them to explain why they dumped their interest in the company or do they simply have the "BOD" excuse the "shareholder advance" as retribution for their share transfer to the "new CEO", deep six the whole thing and walk away with a cool $500K or so in shareholder assets covered by their "sacrifice" in securing a great guy like Jimmy Kendrick as new ship's captain? Then Kendrick apparently bailed and blew the whole thing up. Of course they may have just written it off anyway...no way to tell for sure as long as they keep the financials under wrap and refuse to file their Form 3s in a public forum.

Even after all THAT is said and done, it is entirely possible that Expo either has never had to comply with Sarbanes Oxley or at least hasn't since September 2010 due to rule 33-9142 anyway. SOX status for small companies was still being debated up until almost the date Expo Holdings came into existence in May 2006 so they may always have been immune or maintained the legal position they were. It might be, as suspected all along, EXPH was simply a public vehicle very carefully created and legally set up from day one for the officers to side step most corporate regulations, rob shareholders blind and pay off the debts they ran up due to their own private company (D&D) management incompetency in 2005 and before. Wouldn't it be nice if those original accountants advisors and attorneys did their work so well that a case can be made for everything Brown and Harrs have done to their shareholders since May of 2006 being ruled "legal". All the above 100% IMHO.