Apr 10th 2008, 15:59 System Announcement
by Bogart Beck
REPRINT: SL CapEx clarifies certain Reporting Requirements effective 04/01/2008
As many of you are aware there has been an ongoing debate recently regarding SL CapEx's REQUIREMENTS for member company Reporting. After talking at length with Arbitrage this evening, and having conferred with numerous parties over the last several months we feel it appropriate and important to provide this clarifying message for benefit of all member company Executives and their public shareholders.
Foremost, as a cautionary advisory; we are once again entering our Monthly Reporting period wherein ALL MEMBER COMPANIES are REQUIRED to submit Financial Statements on or before the tenth day of the month following every month-end.
Such Financial Statements MUST INCLUDE BOTH an INCOME STATEMENT and a BALANCE SHEET in a pro forma format that materially conforms to Generally Accepted Accounting Principles (GAAP). We have previously provided a TEMPLATE that listed companies can adopt for purposes of complying with our policy, however, listed companies are NOT required to use such template and may adopt ANY pro forma format that conforms with two fundamental axioms of GAAP as follows;
ALL Itemized Revenue - ALL Itemized Expenses + Adjustments = Retained Earnings
ALL Assets = ALL Liabilities + Shareholders Equity (fully qualified).
Our EXPECTATION is that Member companies ITEMIZE such entries with sufficient detail that a REASONABLE PERSON with NO PRIOR KNOWLEDGE OF YOUR COMPANY could make a REASONABLE ASSESSMENT regarding your business strategy, its earning capacity and it's capitalization plan. Each relatively simple to provide.
WARNING: Failure to comply will result in Sanctions and Fines up to and including delistment and suspension of trading priviledges for Executives as described here http://www.slcapex.com/content/listing
Why, you ask?...
Well, let's go back to our fundamental premise for even existing and the overall general purpose of the collective cooperative of persons here.
We are a Virtual Stock Market Simulation. Our SOLE PURPOSE is to provide an ENTERTAINING and EDUCATIONAL platform upon which individuals wanting to learn how to successfully trade stocks, and, individuals wanting to learn how to successfully run companies can cooperatively come together to form a symbiotic inter-dependant relationship. Clearly, NEITHER party can exist very well without the other. The Exchanges role in this symbiotic relationship is as a fiduciary intermediary - for a fee (our commission) we simply provide a fair market for willing buyers and wlling sellers.
To do that effectively and fairly for all parties, we all must live by some very basic RULES.
As a SELF REGULATING Exchange (barely!), and as part of our continuing effort to provide a fair market for both experienced traders, company insiders as well as potential retail investors, we ALL have an OBLIGATION to provide TRANSPARENCY - that is a CLEAR VIEW of the Financial condition of the companies listed here. YES, we periodically scrutinize the submissions of member companies, and will, on occassion, require that member companies MODIFY their reporting methodologies to better inform the investment community.
Thats our JOB!
We have admittedly been VERY LAX in the past, however, as we've promised for many months we are beginning to tighten down on some of those requirements. This is primarily due to the extreme abuse many of us have witnessed over the last year or so. If we collectively don't substantially improve the public perception of the SL Capital Markets we all can bet that at some point our freinds at Linden Lab or some governmental agency will simply just make it impossible for us to continue.
So, yes, we need to improve - ALL OF US!
The decorum in the Forums must improve - Yes Sando, ME TOO!, reporting must be better - Yes Arb, EVEN YOURS! ;-)... if we're to be a COMMUNITY let's start acting like neighbors - yes IVAN EVEN YOU ;-).
SO... recognizing that we're requiring more diligence and effort on the part of our member company executives, and recognizing that for many of us SL is simply a PART-TIME adventure there must be some give and take and compromise... so here's what we've come up with so that all can benefit in some manner.
(1) - EFFECTIVE IMMEDIATELY (04/01/2008) LISTED COMPANIES WILL NO LONGER BE REQUIRED TO SUBMIT WEEKLY REPORTS IF THEY SO CHOSE. (Although we RECOMMEND that most of you should still provide some manner of communication with your constiuency on a weekly basis, FORMAL Weekly Exchange Reporting shall be OPTIONAL)
(2) - INSTEAD, we will require that member companies provide some manner of FORWARD GUIDANCE in the form of a written narrative to be submitted with their monthly reports that provides shareholders and potential investors with a view of your companies strategy and earnings projection for the coming month.
(3) EFFECTIVE IMMEDIATELY SL CAPEX will no longer facilitate private transfers of shares between parties. Such transfer can readily be handled on the public market with any unique settlement discounts or consideration handled privately between parties. We simply do not have the bandwith or resources to manually transfer shares on behalf of third parties.
We believe that these three reasonable compromises will provide both company, Exchange and investor with sufficient tools to inform and be better informed.
At the same time, CEOs need to be accountable TO BOTH THEIR INVESTORS AND THE EXCHANGE with respect to the QUALITY of materials (Financials, et al) they provide to the community.
Honestly, without the threat of sanction, penalties, and up to and including delstment our enforcement efforts would have no teeth. The harsh reality is that there are MANY companies here that have either ignored or refused to abide by the rules we've established. We therefor have no choice but to become extremely vigilant and somewhat rigid in our enforcement efforts. If, as a company, you are unwilling to play by such rules then, please, take your company private or move it elsewhere. It's not fair to the rest of us.