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Saturday, April 01, 2006

Where have you gone, ETLT?

Since their year ends Dec 31, 2005, they should have filed either a 10-K statement or an NT 10-K notice of late filing by March 31, based on this SEC list of filing deadlines. ETLT would classify as a "Non-accelerated Filer (less than $75MM)" which means they have 90 days. Since this is not a leap year, that would mean March 31, 2006.

According to this website, ETLT has 24 hours after the 10-K deadline to file an NT 10-K late filing statement. It also says that for a "Late 10-K", the company has "up to 15 days of original filing deadline". So what someone said on a message board about a representative (or someone somewhat representative) saying April 15 being the real deadline might be accurate in some sense.

The hours of operation for direct transmission submissions to the EDGAR system are 6:00 a.m. – 10:00 p.m. Eastern Time (U.S.) weekdays, excluding Federal Holidays. Filings submitted after 5:30 p.m. Eastern Time (with the exception of filings submitted under Section 16 pursuant to Rule 462b) will receive the next business day’s filing date. The EDGAR system is not in operation on weekends.
So you won't see anything until Monday morning 6:00 AM at the earliest.

Last year they filed an NT 10-K on March 30. and they didn't get a 10-K finished until May 12, 2005. I share the concern that other people have about it and consider failure to file even a late filing notice to be a fairly big deal.

Here's some stuff from the FAQ on OTC BB

Can a company be "delisted" or removed from the OTCBB?
OTCBB issuers that become delinquent in their required regulatory filings will have their securities removed from the OTC Bulletin Board.... [presumably, ETLT would stay on the pink sheets if that ends up happening]

What are the filing requirements for being on the OTCBB?
Issuers of all securities quoted on the OTCBB are subject to periodic reporting of financial information to the SEC, banking, or insurance regulators. Issuers who file with the SEC via EDGAR are not required to submit hard copy filings with the OTCBB or NASD....

Why is it important to file a Notification of Late Filing (Form 12b-25)?
To ensure our compliance system does not identify a company as delinquent in error, it is important that companies file a Notification of Late Filing on or before the filing due date. If a Notification of Late Filing is filed after the filing due date, the company's symbol may be appended with a "E".


The purpose of appending an "E" to the security symbol is to alert all interested parties that the security will be removed from the OTCBB unless evidence of compliance is provided prior to the end of the applicable grace period (30 days for EDGAR filers, 60 days for non-EDGAR filers). Anyone possessing evidence of compliance with Rule 6530 may provide that information by contacting the OTCBB Issuer Filings Department.

How do I get the "E" removed from my trading symbol now that my company filings are current?
In order to demonstrate compliance with Rule 6530 and get the "E" removed from an issuer's trading symbol, please call the OTCBB Hotline in the OTCBB Issuer Filings Department. Please leave the following information on the voicemail: your name and phone number, the company name and trading symbol, and filng type and date submitted....
It takes about a day to get rid of the "E" letter. ETLT will probably become ETLTE very soon and will remain that way until April 30, 2006 when they would be removed from OTC BB and presumably remain on the pink sheets. Hopefully these guys will get their asses in gear and file at least an NT 10-K very, very soon.

I suggest sending a concerned e-mail to here (don't bother, see below)

UPDATE 4/3/06: ETLT sent out an NT 10-K.
Because of the possible impact on prior year's financials of FASB 133and the potential roll forward effect, we were unable to complete the preparation and filing of Form 10-KSB on or before the due date.They also issued a press release.The extension was requested because the Company is assessing the impact, if any, that FASB 133 (Accounting for Derivatives) might have on their financial statements for the year-ended December 31, 2004. While the Company believes that the impact will be minimal, its independent auditors have insisted that this matter be resolved before they issue their opinion for the year-ended December 31, 2005. The Company fully intends to file its Form 10-KSB on or before the extended due date of April 15, 2006.The "derivatives" they talk about are the same issue that CXTI ran into here. I looked at this stuff in detail here.The Company accounts for non-hedging contracts that are indexed to, and potentially settled in, its own common stock in accordance with the provisions of Emerging Issues Task Force 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” (“EITF 00-19”). These non-hedging contracts accounted for in accordance with EITF 00-19 include freestanding warrants to purchase the Company’s common stock as well as embedded conversation features that have been bifurcated from the host contract in accordance with the requirements of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”). Under certain circumstances that could require the Company to settle these equity items in cash or stock, and without regard to probability, EITF 00-19 could require the classification of all or part of the item as a liability and the adjustment of that reclassified amount to fair value at each reporting period, with such adjustments reflected in the line item of change in valuation of derivative as other income/(expenses) on the statements of income.
I'm considering doing a blog post on the new derivatives accounting rule (just so I can understand it and write it down so I don't forget the details).

I also sent an e-mail to Mr William Cai at Heron about the filing.
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