Laying out all the Cards…
As you likely already know, the U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of Phantom Entertainment, Inc. (PHEI), commencing at 9:30 a.m. EDT on June 24, 2009 and terminating at 11:59 p.m. EDT on July 8, 2009: the
According to the U.S. Securities and Exchange Commission:
“The Commission temporarily suspended trading in the securities of the foregoing companies due to a lack of current and accurate information about the companies because they have not filed certain periodic reports with the Commission. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).”
The Company is delinquent with the following SEC filings:
10-QSB Q2 2007
10-QSB Q3 2007
10-KSB Y/E 2007
10-QSB Q1 2008
10-QSB Q2 2008
10-QSB Q3 2008
10-KSB Y/E 2008
10-QSB Q1 2009
In order for the Company to submit these filings to the SEC’s EDGAR system, financial audits must be conducted by a PCAOB certified for both delinquent 10-KSB filings (Y/E 2007 and Y/E 2008).
The PCAOB (Public Company Accounting Oversight Board) is a private-sector, nonprofit corporation, created by the Sarbanes-Oxley Act of 2002, to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.
Unfortunately, these audits are not cheap.
In addition, the Company would need to obtain the consent from the auditor to file each 10-QSB which is not cheap.
Also, all of these delinquent filings would need to be reviewed and given the OK to file by an Securities attorney.
It is our estimate that it would cost approximately $200,000 in auditor and attorney fees for the Company to become current in our SEC filings and that does not include each Q going forward.
The reason why the Company became delinquent in our filings in the first place was strictly due to lack of money. Understandably, the auditor will not provide their consent for the Company to file the required reports when the Company has an outstanding bill with the auditor as it would jeopardize the auditor’s independence.
Upon further discussions with the U.S. Securities and Exchange Commission, as well as with a well respected Securities attorney, the ball is in the U.S. Securities and Exchange Commission’s court. The Company has been informed that it could voluntarily consent to being removed from pinksheet status but that is not our intention. It is the Company’s desire to retain pinksheet status and will not voluntarily consent to being stripped from pinksheet status as we do not believe that is in the shareholders’s best interest.
With that being said, the U.S. Securities and Exchange Commission has the authority to force the Company to be involuntarily removed from the pinksheets. The Company hopes the U.S. Securities and Exchange Commission does not take this action as the Company does not believe that is in the shareholders’s best interest
Hopefully it does not come to this but it is a real possibility as due to prior fund raising was not done the interest of PHEI which has made it impossible for us to raise more money. Since we believe this is a very real possibility, if the U.S. Securities and Exchange Commission does take this unfortunate action of forcibly removing the Company from the pinksheets we do have a preliminary plan in place to eventually regain our pinksheet status which would be to work with a Securities attorney to file a Registration Statement if and when the Company has the cash to do so. It is our belief that it will cost approximately $150,000 in auditor and attorney fees to file this Registration Statement. The Company will not be able to file this Registration Statement until the Company has the funds available to do so and we can not predict when, if ever, that may be.
With that being said and as you may or may not know, there are currently 500 Lapboards on ship making their way from China to the USA. No matter what action, if any, the U.S. Securities and Exchange Commission takes, it will not derail us from our mission to bring the Lapboard to market, begin generating sales and conduct business in a manner that keeps the shareholders’ best interest priority number 1.
We have no intentions of changing the share structure or shareholder base. The current share structure is as follows:
2,044,830,571 as of June 26, 2009
2,400,000,000 as of June 26, 2009
Even if the U.S. Securities and Exchange Commission does take this unfortunate action of forcibly removing the Company from the pinksheets, the Company’s plan is to keep the current share structure intact and regain pinksheet status by generating enough sales to eventually provide the $150,000 to pay the estimated auditor and attorney fees we estimate will be incurred to file the Registration Statement to regain the Company’s pinksheet status.
There it is, the horrid truth – so even with the above I’d like to say this:
I jumped on board this sinking ship with high hopes of plugging it’s holes as quickly as possible and getting back on course. Over the last 8 months the holes were few and far between, and we were starting to sail straight again. As the new Captain I’ve always had my crew’s well being in the forefront of my mind, while trying to make my way to solid land. There is still a lot of crap in the Haul of this ship slowing us down and while I’ve tried to dodge as many obstacles along the journey, we’ve hit a reef just short of shore and it has crippled us pretty bad. I’m asking you not to abandon ship, though it’s probably your first instinct. We are still selling our bounty to the world, and since our exposure many have been asking to purchase our treasure. We are also actively now welcoming daring Angel investors to help repair the damage of the last 7 years. We are sooo close to solid land, yet sooo far with the financial anchor we are now faced with.
If anyone sees that we have been straightforward, and wishes to come aboard – with the knowledge that the ship could sink at any moment, please give me a ring or email me at email@example.com
Once again – when our other ship comes in in July we will be selling boards on phantom.net. Thank you.
This entry was posted on June 26, 2009 at 10:29 am and is filed under Message from the CEO. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.