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Yak Communications, Inc. (YAKCE) Message Board

  • jackmanave jackmanave Mar 30, 2005 6:34 PM Flag

    Deloitte & Touch resigns


    So what do we have here?

    1. Yakc CFO suddenly resigns several months ago.

    2. Yakc accounting firm Horwath resigns soon thereafter.

    3. Accounting firm Deloite & Touch replaces Horwath.

    4. Yakc fails to meet deadline for filing 10-Q.

    5. Yakc receives delisting letter from NASDAQ.

    6. Yakc announces that there will be a restatement of Historical financials.

    7. The new accounting firm, Deloite & Touch resigns as auditor for Yakc.

    8. The Yakc 10-Q still has not been filed with the SEC, 45 days after the February 15, 2005 deadline.

    This topic is deleted.
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    • Horwath didn't resign - YAKC opted to go with D&T, obviously not thinking that they would raise an issue on the accounting for this software contract. I read the contract, and frankly it is very strange - a nonrecourse multi-million dollar obligation with a contingent payment structure for software that is described as being "next generation" with uncertain utility. It sounded a little hokey, but regardless of how they end up accounting for it, it won't change revenues, cash flow or cash balances.

      • 2 Replies to tredleon
      • Good post. This is my reading also. I havent read the contract, only what is mentioned of it in their SEC filings - a multimillion dollar payment obligation stretched over time with payment to be received on sale of developed software to other parties. If I read this right they pretty much equaled each other. D&T found issue with this on a) how the payment/money received is accounted, and b) tax implications of the same.

        Going forward, they need to fix the tainted image to get things back to the same momentum ...

        a) Get a new accountant
        b) File the quarterly
        c) Avoid delisting
        d) More transparency in such dealings in the future ...

        Things they have done right are:

        a) End the contract
        b) Seek the moral higher ground - getting SEC opinion
        c) Good revenue and earnings growth

        Final note: do not respond to bashers/pumpers on this board (or any). It is rumored that they get paid for the attention they generate ... Finally some meaningful discussion :)

      • This I agree with. The matter is strange (i havent read the contract) - a multimillion dollar obligation stretched out over a period of time, at the same time if I read the SEC filings mentioning the contract right, there is obligatory payment from the software maker also - ostensibly out of selling it in other markets (am I right?). The way I read it, the quarterly payments more or less equaled the money they would receive. The bottomline is the lack of simplicity and transparency, which makes the whole deal non-convincing. My guess is that D&T found an issue with a) how this is accounted, and b) the tax implications of this transaction

        It seems going forward they are doing the right things. (Would you agree?)

        a) This contract is ended.
        b) Re-instate Howrath as the accountant and they seem to be taking the high ground by asking SEC for guidance
        c) They need to avoid de-listing. This will avoid killing the momentum
        d) Revenue and earnings growth (as reported) are indeed convincing ..
        e) They must get the quarterly report out quickly and try to put this behind them.
        f) Their image needs to be cleaned (it has taken a beating) for any additional capital to be raised (for expansion, growth etc.).

        Good opinion from you and I am glad you posted. The best thing to do is ignore the basher-pumper meaningless exchanges. Most importantly DO NOT answer their posts - it is rumored the paid bashers receive money for each conversation piece they engage with other posters .... They have various clever schemes to track them.