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Biotech / Medical : Chromatics Color Sciences International. Inc; CCSI
CCSI 29.32+4.6%Oct 31 9:30 AM EDT
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To: Rajiv who wrote (5552)8/23/1999 9:45:00 PM
From: Rajiv   of 5736
 
Accounting gimmicks from CCSI -

Remember the Avon episode ? (http://www.asensio.com/ChromaticsColor/chromatics1.htm)

Relevant part -

In June of 1988 CCSI leased 2,000 Colormate II System units to Avon. CCSI earned revenues of $1.8 million in 1988, $0.9 million in 1989 and $0.5 in 1990 from the Avon deal. CCSI had no other revenues in any of those years. CCSI's three-year relationship with Avon ended in litigation in April 1990. As a result, in 1991 CCSI had a total of $12,600 in revenues. In June of 1991 Avon returned the used Colormate II machines to CCSI. CCSI valued the 1,400 returned units that it claimed were resellable at $700,000. CCSI's auditors ascribed no value to CCSI's alleged technology. In 1994 Avon settled the lawsuit and paid CCSI approximately $2.0 million, which CCSI spent on expenses including $879,500 in officers' compensation. CCSI has been unable to sell any of the units. CCSI still carries the 10-year-old units at $700,000 on its balance sheet.


Till last quarter this was showing up in the balance sheet as part of
"COLORMATE(Registered) UNITS".

Now that CCSI supposedly has a distribution deal, it has moved the part "COLORMATE(Registered) UNITS" to the "Inventories" section. CCSI actually thinks that shareholders will believe that it is proposing to sell these units.

Regards,
Rajiv
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