Subject: NOW the TRUTH Mr. Kern!!!
Date: 3/26/98 1:37 AM Eastern Standard Time
From: SethPoppel
Message-id: <1998032606370701.BAA20314@ladder03.news.aol.com>
THERE ARE THREE MESSAGES HERE...FIRST A POSTING I MADE ON THIS BOARD ALMOST A YEAR AGO, SECOND THE RESPONSE FROM THE (AT THAT TIME) HEAD OF GUMM, MR. KERN AND FINALLY A PRESS RELEASE FROM TODAY!!! (YES..IT FEELS GOOD!!!)
1.)
Date: Thu, May 8, 1997 12:55 AM
From: SethPoppel
Message-id: <19970508005500.UAA23393@ladder01.news.aol.com>
Dear Mr. Kern
I have been the Chairman and President of two NASDAQ companies (American Vision Centers and NuVision ..AMVC and NUVI) and have been involved with barter deals and in both instances my auditors (EY and PW..not of course Angell and Who?) were comfortable with the TRUE economic value of the returned media credits (which turned out to be about 25% of the inventory traded!!!). Your quarterly statement is UNaudited and I would not like to be
providing the insurance to your auditors when they must certify a 100% value for the Jack LaLanne (sp?) gum swap. I believe barter credits are great and anything you can derive at the margin is a benefit to your shareholders, but in my humble opinion (IMHO) your Q1 financial statements would certainly dis-incent me from investing in your company. Respectfully yours,
Seth Poppel
2.)
Subject: Re: GNKERN
Date: Thu, May 8, 1997 7:16 PM
From: Gnkern
Message-id: <19970508191601.PAA25691@ladder01.news.aol.com>
Dear Mr. Poppel:
Thanks for your reply.
I too have had some experience other than my present situation. I have been a corporate officer of two Fortune 500 companies, Playtex (Senior VP and Division President) and Max Factor (Executive V.P. - Chief Operating Officer). In both instances I ran businesses generating hundreds of millions of dollars. We too used the high priced outside auditors.
We also sold inventory to barter companies and bought back advertising and other services for like amounts. In each case the company benefited and grew exponentially. The company we deal with also does similar transactions with approximately 10 Fortune 500 companies. They also report the transactions as we do.
Please rest assured that our auditors adhere to the same IACPA standards as the big firms and we report only what we know and believe to be valid and accurate.
I don't want to divert my attention from running the business to continue this exchange with you. Apparently you have some interest or a curiousity about in our company. We have no interest in yours - so have a nice life and good luck in future endeavors.
Best regards,
Jerry Kern
3.)
Gum Tech <GUMM.O> restates earnings, sees Q1 loss
PHOENIX, March 25 (Reuters) - Gum Tech International Inc.
said late Wednesday it has restated its financial statements
for the year ended Dec. 31, 1996, and for the first three
quarters of fiscal 1997.
Gum Tech said in a news release it also expects a loss of
about $1.3 million in the first quarter of 1998 stemming from
the costs of its management restructuring and an advertising
campaign.
The chewing gum maker said it restated its earnings as a
result of an inquiry by Nasdaq officials and subsequent
discussions with the Securities and Exchange Commission
concerning the company's accounting treatment for its barter
transactions.
The restatement eliminated the financial effect of barter
credit transactions, it said. It also resulted in a $665,790
non-cash charge to interest expense related to a beneficial
conversion feature in the company's convertible debentures for
the quarter ended March 31, 1997.
Under the restatement, the company said it has recorded the
barter credits in an amount equal to the carrying value of the
inventory, which was reduced to zero prior to the exchange.
Therefore, no amounts have been recorded for the barter
credits, it said.
Jeffrey Bouchy, chief financial officer, said: "Even
though this restatement has affected our bottom line, it is
important for the investment community to realize that this has
absolutely no effect on our cash position or on our cash
flows."
Gum Tech also reported its operating results for 1997,
showing a loss on the year of $5.4 million, or $1.12 per share.
That compares with the restated loss the year earlier of about
$3.4 million, or $0.77 per share.
Sales for 1997 totaled about $3.8 million compared to the
restated 1996 sales of $3.1 million, it said.
The effect of the restatements as originally reported is
summarized on the tables below for fiscal 1996 and for the
first three quarters of fiscal 1997. Also included is Gum
Tech's fiscal 1997 year-end summary.
Year Ended Dec. 31, 1996
As reported As restated(a)
Net Sales $3,868,642 $3,116,130 Net
Income (loss) ($2,635,895) ($3,388,407) Net
Income (loss) per share (.60) (.77) Retained
earnings (deficit)
end of year ($1,929,822) ($2,682,334)
Quarter Ended March 31, 1997
As reported As restated(a)
Net Sales $2,427,822 $723,611 Net
Income (loss) $541,575 ($1,828,426) Net
Income (loss) per share .09 (.27) Retained
earnings (deficit)
end of period ($1,388,247) ($4,510,760)
Quarter Ended Six Months Ended
June 30, 1997 June 30, 1997
As reported As restated(a) As reported As restated(a)
Net
Sales $1,983,533 $584,077 $4,411,355 $1,307,688 Net
Income
(loss) 150,550 (1,226,880) 692,125 (3,055,306)
Net Income (loss)
per share .03 (.18) .12 (.44)
Retained earnings
(deficit) end of
period (1,237,697) (5,737,640) (1,237,697) (5,737,640)
Quarter Ended Nine Months Ended
Sept. 30, 1997 Sept. 30, 1997
As reported As restated(a) As reported As restated(a)
Net
Sales $1,783,334 $1,284,746 $6,194,689 $2,592,434 Net
Income
(loss) 24,800 (436,061) 716,925 (3,491,367)
Net Income (loss)
per share .00 (.07) .13 (.57)
Retained earnings
(deficit) end of
period (1,212,897) (6,173,701) (1,212,897) (6,173,701)
(a) Restatement due to elimination of barter transactions and
beneficial conversion feature on convertible debentures issued
in March 1997.
Year Ended Dec. 31,
1997 1996 Net Sales
3,776,562 $3,116,130 Cost of Sales
4,197,777 2,070,443 Gross Profit (421,215)
1,045,687 Operating expenses 3,881,238 4,199,288
Research and development 209,783 364,728 Income
(loss)
from operations (4,512,236) (3,518,329) Interest and
other income 204,220 117,219 Interest expense
1,090,618 219,668 Provision (benefit) for
income taxes- --- (232,371) Net Income
(loss) (5,398,634) (3,388,407)
00:34 03-26-98
Copyright 1998 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similiar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL. |
