Statement of Count Me In Corporation Regarding Money Owed to Clients

BELLEVUE, Wash., Jan. 2 /PRNewswire/ -- Terry Drayton, founder and CEO of
Count Me In Corporation today announced that the organization is continuing
its work to secure investors or a sale so the company can repay the $5 million
it owes to 220 sports organizations across the country. "My only objective is
to raise the funds needed to pay back every club we owe money -- every penny,"
he said.
Drayton added that the company is in active negotiations with a number of
organizations that could either provide a capital injection, or purchase the
company outright.
"CMI made a series of errors over the past eight years, largely around
having the right staff and developing the appropriate procedures, adequate
systems and financial oversight in place," Drayton said. "We could talk about
that, or poor advice we received, but at the end of the day, I am now in
charge, so it is my responsibility to fix the problem."
According to Drayton, the company can fully account for every penny of the
$5 million shortfall, noting the funds were slowly used over the past eight
years to pay normal operating costs for the Bellevue company, such as salaries
for its software engineers and support staff.
Drayton noted that over the past eight years the company has collected
about $175 million for its clients and distributed $170 million, about 97% to
them. "It's a series of small oversights over a long period of time that got
us here," he added, "nothing more."
When Drayton became aware of the problem about two years ago, he brought
in outside financial experts to help understand the extent of the financial
issues. He also instituted new procedures and upgraded accounting and
remittance systems.
"We had to do a ton of things including re-keying almost seven years worth
of financial records before we could understand the extent of our financial
situation," he added. "We got that done in May 2008, and I then stepped in
full-time to try to fix the shortfall through a planned $10M equity offering."
Late last year, CMI voluntarily changed its business model and no longer
handles money on behalf of its clients. Instead funds flow directly to the
clubs so they are always under the clubs' compete financial control. "With
20/20 hindsight I wish we'd done that from the outset," said Drayton.
Drayton acknowledged that some of CMI's clients have grown understandably
impatient waiting for him to secure an investor.
"A couple of clubs have filed lawsuits but many more are just asking their
members to contact their credit card company to reverse the charges and mail
them a check," he said. "Our support team will continue to assist our clients
if they make the decision to pursue charge-backs."
Drayton also noted that a recent court filing by three Alaska based sports
clubs attempting to force the company into involuntary bankruptcy could have a
devastating effect on all the clubs CMI owes money. "If they are successful
and force us into Chapter 7 liquidation, our clients will get pennies on the
dollar," Drayton said. "We want to make sure our customers are 100 percent,
fully repaid, and that won't happen in bankruptcy court. That's why we haven't
pursued that option."
Drayton added that he plans to ask the clubs filing the court action to
withdraw their claim.
"I can understand our clients' frustration and anger. We made a host of
mistakes and have put them in a difficult situation. Now I'm just asking them
for the time to fix it," he concluded.
SOURCE Count Me In Corporation

Mark Firmani of Firmani + Associates Inc., +1-206-443-9357, mark@firmani.com,
for Count Me In Corporation