Here's a couple of excerpts, but read the whole thing.
BTW, I'm sorry about misspelling "prophetic".
"EUM’s Purported $900 Million Backlog Appears Significantly Exaggerated or Fictitious.
The foundation of the Pareteum growth story is built on the company’s
supposedly large and fast-growing 36-month backlog, which management
now says exceeds $900 million. But our investigation identified a
variety of purportedly valuable customers that appear wholly incapable
of paying TEUM anywhere near the large contractual values that TEUM has
touted. Examples include:
- A nearly-worthless penny-stock managed by a former AudioEye executive named alongside TEUM’s CFO in the fraud suit.
- African entities that show no signs of meaningful business activity.
- Contracts with crypto-companies including one that recently settled
with the SEC and “agreed to return funds to harmed investors”.
- Closed or dissolved businesses.
- Websites that are inactive or offer limited contact information.
- Businesses that don’t answer the phones or report having minimal employees.
- European entities with tiny amounts of capital or revenue.
- Featured customers located in apartment buildings.
- Millions in loans to an entity bleeding cash.
- A purported $50 million contract with an entity in Thailand that
reports having zero 2018 revenue, years of losses, and involvement with a
crypto-coin that has lost 97% of its peak value.
The accounting fraud that TEUM’s CFO allegedly perpetrated at AudioEye
involved the booking of phantom revenues to artificially inflate the
stock price. Bulls have taken comfort in management’s assurances that
TEUM’s backlog has converted to revenue at over 100% of contractual
rates thus far. But we find TEUM’s backlog conversion rate highly
problematic considering that our research has flagged so many small or
defunct customers. If exaggerated contractual values are now being
recognized as revenue, then we believe TEUM will face serious accounting
This report started the share price slide, and was the cause of TEUM's decision to decide to restate.