I ran across a mention of ETEV last week in which is was compared to another stock in which I was interested (quite negatively, I might add). I dug up the most recent 10-KSB/A from http://www.secinfo.com filed on Nov 19th, 08. After all the usually boilerplate advertising fluff and bulls*it (probably carried over from previous reports' boilerplate) there was some interesting info to be found.
Looks like Enrique couldn't fire enough auditors to continue to hide whatever he was doing.
Highlights:
1) 2006 and 2007 financial reports were withdrawn and re-filed. Annual reported revenues for the periods were $1.5 and $1.3 million respectively, not the hundreds of millions previously bragged about.
2) Annual losses were simply staggering. $16.4M for 2006 and $24.5 for 2007.
3) Enrique and his two buddies who comprised the entire Board of Directors were forced to resign and were replaced by new management. All previous compensation plans including stock options and warrants were canceled.
This particular gem from ITEM 8A(T) - p. 50 ff:
There's plenty more if you'd like to check it out. http://www.secinfo.com/d18hJx.t62.htmOn September 5, 2008, the Company accepted the resignations of Enrique de Vilmorin, Luis Willars, and Jose Manuel Escobedo from all positions with the Company. These resignations were precipitated by certain shareholders of the Company advising Mr. de Vilmorin that they would be formally requesting a shareholder vote to replace management, including the Company’s directors. Prior to receiving such a demand, Mr. de Vilmorin, Mr. Willars and Mr. Escobedo resigned from their positions with the Company.
Immediately following their resignations, the Company launched an internal investigation, led by the Audit Committee which was formed on September 25, 2008, to ascertain the extent of the financial statement items requiring restatement and other issues requiring disclosure to the Securities & Exchange Commission and to the investment community. On or about October 16, 2008, we concluded that sufficient support had been obtained that certain revenue transactions dating back to the year ended December 31, 2006 were unsupportable, and that certain personal expenditures were incurred on the Company’s accounts. Upon evidence of these transactions which were materially misstated for all periods dating back to December 31, 2006, the Company filed a Form 8-K on October 21, 2008 citing non-reliance on its issued financial statements since that time.
Among the materially misstated transactions noted were the following:
·
Sales invoices and transactions to companies that did not exist dating back to the fiscal year ended December 31, 2006;
·
Purchases of inventory that were not supportable dating back to the fiscal year ended December 31, 2006; and
·
Personal expenditures incurred by Mr. de Vilmorin dating back to the fiscal year ended December 31, 2006, including cash payments and purchases of personal assets that were recorded as Company assets.
The Company, through co-operation of its management and Board of Directors, has substantively reviewed all significant transactions and will be restating, to the extent not already done, all reported financial statements from December 31, 2006 to June 30, 2008 to reflect the Company’s true financial position for each of the reporting periods then ended.
I guess all those want-to-be millionaires will have to move on - my guess is that newer one My Shopping Genie will catch some of them...
The Unsers had better find a new sponsor....
Regards,
Steve
