Silk Energy Ltd SLKEF

RE: DoingthejobforAatozz

[victor2009]

Nickel77,

You bring up a good point - "...what it might cost ISM shareholders to oust Randy and pay off his lucrative Parachute Package that was passed by the company.  What might be left in the company coffers if this was paid out?"

That parachute was packed after the last year end - around the time before the AGM, when aatozz and others were finally starting to admit that the world of Inspiration might be a nice place if the old Randy Man took a hike. So that agreement had not been subject to the Auditor's scrutiny.  I'm wondering if it's not required to disclose this parachute package in the financial statements as a commitment and a contingent liability Given the depleting cash position, the parachute is certainly a material amount - it has the possibility of bringing ISM to insolvency.  Will be interesting to see the disclosure.

There's a few other things that the Auditor might be hard pressed to ignore. One thing is the classification of the amount as a current asset - if it's still outstanding, treating it as current may be pushing things.  If it's still outstanding, this amount is also material, and some commentary on collectibility and adequacy of security might be advisable.

Another disclosure consideration is whether the dismal Micon report, and lack of development of the Langmuir property, might warrant a write-down of the costs being carried as an asset.

We're just a month away from the terrible let down of last year's annual financial statements followed by even worse news in the Micon report. A year ago ISM was 70 cents, in January it started it's steady market decline. Release of a year's financial results, with very little to show, could signal more of the same for 2011.

Last year the CEO was rewarded with a 25% increase (to $37,500 per month) for his guidance and leadership. It will be interesting to see what is in store for management remuneration in 2011. If the Micon Report signalled a 25% raise - what might the reward be for the failed spin-out debacle?  

Should be an interesting couple of months coming up.