Langerman Alex is practicing head and neck cancer surgeon and researcher. His research is focused on the intersection of business, ethics, and data science in the operating room. And he is a graduate of Pritzker and the head and neck otolaryngology head and neck residency program here at the University of Chicago. He went off to Vanderbilt where he completed a fellowship. And then we were fortunate enough to have him back here on the faculty for a number of years where he did some really innovative work. And I had the good fortune of working with him and calling him for help in the operating room on more occasions than he would like to admit. But Alex just recently moved to Vanderbilt, where he is continuing his work in surgery as well as research in ethics. And I must say, Alex is a good friend and also someone that I've known since his early 20s, we were deciding before he went to medical school, Alex and I worked together. So it's a real pleasure for me to welcome Alex. Thanks Peter, thanks everyone. It's such a privilege to be here. This was a very hard three acts to follow. They were awesome presentations, so it's a privilege to be a part of it. I think you're hearing a theme today that when Mark asked me to give the talk, I gave this very generic title and the gentleman in the back, I'm not sure I know you, but thank you for generating some buzz about the talk. I did change the topic just two weeks ago based on some stuff recently in the news. So disclosures, I am not doing a good a job at Stacey as far as my thing. But I also started a company while I was here at the University of Chicago. I think we were very similar pathways there. And I won't be talking anything about any of the products there, but I will be sharing some data that was generated by that company because it supports some of the concepts here. Okay, so I'm a data guy, as Peter mentioned, and I study the operating room. I look for ways to collect data out of the operating room. And so we can see here is this idea of double booking surgery. So let's see if this works. Yeah, great. So basically if you have a surgeon and they're working in multiple rooms, that's called double booking concurrent overlapping cases, the different terms and larger. The thing was this did not come out of my lab, but actually out of the Boston Globe, which was pretty fascinating. This is real data that they obtained through sources that they will not reveal about what was actually happening on the actual surgical schedule. Now that name of the patient there was also published. This was a patient who had a bad outcome. And so there was a complaint against this surgeon who they're showing their picture at the little bit of bottom. It's pretty dramatic. And this was the title of the expose, the clash in the name of care, which is it's a good read and I encourage people to read it. And it's even including things like Bobby Jenks who was a pitcher I believe and credited the end of his career to this surgeon here. And that's all in that article as well. So this blew up on social media. And that's my favorite part. That's pretty cool. It created a lot of stir and a lot of writing sort of immediately about it. So what is the sort of rules around concurrent surgery? Well, if you look at the billing rules, the CMS will say that it's that, the critical or key portion and you'll notice that it's very important here that it says that the teaching physician determines. And the whole idea behind this is theoretically there's somebody in the room doing something, a resident, a trainee of some kind. And that the attending surgeon is bouncing between these rooms. But they're ensuring that they're there for the critical portions of the procedure. Whether or not they're doing it, the point is that they're participating in that. And then the American College of Surgeons sort of first of all affirms that the surgeon is personally responsible. That's unobvious. And that they can delegate parts of the procedure. That that's ethical. It's part of training. It's a longstanding tradition of making sure that everything happens for the patient but that you delegate appropriate parts to your trainees. And that it's a proper to delegate, of course, again, with this key components of the operation. So an undefined term, I think importantly an undefined term at this point, but something that that is how we've defined it is based on what the physician decides. So I put these goofy pictures up here just to start with a statement that says, I'm not really someone who subscribes the captain of the ship, surgeon is the captain of the ship of the operating room, much more it's like the A team here. So everybody participates in the care of the patient. And the reason that I think it's important to make that distinction is because I'm drawing a particular dyad in here between the patient and the surgeon. Because even though this is the A team, the only person that the patient has met before the operation is the surgeon. That's the person that they came to their clinic. That's their doctor in many circumstances. And that's also the person who's going to be taking care of that patient after the operating room event ends. Whereas the rest of the team tends to be pretty focused in the operating room, particularly talking about the anesthesiologist and the nurses who will be taking care of that patient. So in this case, the surgeon, and I show the students, show delegation. So the surgeon is delegating the care of that patient, whether explicitly or just implicitly is in if I work at the University of Chicago, I'm implicitly delegating the care of the anesthesia to my anesthetic colleagues. And similarly, the setup of the room, the padding of the patient, the other things that the nurses take care of to ensure that patient's safety and documentation. And then delegating portions of the actual technical performance of that procedure to trainees. This article came out. It's an interesting timing on this article because the events at Massachusetts General were starting to come to a bit of a fever pitch. This is before the expose was announced. And the editor and chief of the journal that this was published in is the chief of surgery, I think at Massachusetts General or an important surgeon in Massachusetts General. So there's probably some reason why that happened to come out then, but I don't know. But it was in defense of overlapping surgery. So they bring up a really good point. This idea that American college surgeon stands by this as well. This idea that it's important to train trainees. And if the first time that they're ever alone is the first time that they're on practice, that's probably a bad thing. And the reason that it's important is because if you think about it, let's say that you and I are operating together and you're performing this procedure and I'm watching you perform the procedure. If you're going along and I'm not saying anything, you know, you're doing a good job, right? Because I'll start complaining or pointing out things if something's not right. Whereas if I'm not in the room, that same silence has a much different meaning.  You're thinking through the procedure. So it's really important for trainees to get that experience, to be able to think through, have the angst of wanting, should I make this, show me they're not. You never want to put a trainee in that situation and not something where they're adequately prepared to handle that. But they're still a little bit of a stress and they need to go through that. They point out some key things, you know, attending a surgeon, disclose and provide informed consent, you know, do all the right things, supervise, and I think this is really key here, knowing their trainee skill level, they'll come up again and be immediately available. So this is what happens when you actually have a surgical case. This is everything that goes into a surgical case. I spent a lot of time surgery over a workflow. And so you can see that here's the procedure down here. Patient actually enters the room there and leaves the room there. And this is not necessarily to scale as far as the time. In fact, this probably takes up a much larger portion in many cases. But for short cases, that's not the case. And then throughout this case, there's different portions of procedure that may be critical portions and maybe sort of non-critical portions. And we'll get into those definitions a little bit. But the point is, you already see there's tons of delegation that's going on.  And the attending surgeon's not doing all of those things. So even though they're the person that the patient's, you know, contracting with, they're not handling all those things. And I would even argue some things I shouldn't be doing. I mean, I certainly know how to put in a fully catheter. I've done it hundreds and hundreds of times. But the last time I did it was many years ago because, you know, other parts of the team are performing that function. So should I be the one that's naturally turned to do that? Should be the most experienced member of the team for that part? Maybe. All right, so there's some forces that are acting upon hospitals and surgeons and healthcare in general. So one of them is the increasing employment by hospitals of surgeons. So moving away from the private practice model to an employed model. And so because of that, you know, surgeons want to maximize their time for profit. But, you know, as they become employees of hospitals, they're going to want to, you know, the hospitals are going to want to maximize their time. Now that, you know, as Taylor Swift says, the payer's going to pay, pay, pay, pay, pay.  But, you know, as our healthcare payment system shifts, we're going to see that it's not going to necessarily, and this is something that Stan Goldblatt and I were talking about earlier, it's not necessarily going to be on an item by item, you know, our VU-based system. You may actually have, you know, accountable care organizations, bundle payments, other things where it's even going to be beneficial to the payers and healthcare system as a whole to maximize the time of the highest paid part of healthcare, right? It's the professional fees, the professional labor is the most expensive part of healthcare. And so it's beneficial to the whole system to maximize surgeon time. Okay, so if we look at this idea of an optimized surgical scheduling, you know, this is where you can see that, you know, the surgeon's basically bouncing back and forth between the procedures. And this is that nonoperative time that I showed you in that graph earlier. And so this would be great. So basically the patients, the surgeon's got absolutely no downtime whatsoever. But there's quite a bit of downtime there, you know, for the operating room, for the other members of the team. So then we can imagine a really optimized schedule there where just the critical portions of the procedures and they're jumping through the room. So basically there's absolutely no downtime. This sounds really stressful to me as a surgeon, but, you know, it actually, you know, it doesn't leave much room for teaching or for talking to families, counseling patients. Gretchen, what you said at the end of your talk was the greatest thing I've heard all day, which is the idea of not just a technician, but really you want to take care of it. So we don't just want to do the surgery, we want to actually, you know, help our patients. So this seems stressful, but theoretically this would be the most optimal use of the time. There's probably a balance somewhere in here. And I should say this is also a bit of a manufacturer here because it's not possible under medical rules. And then here lies the biggest problem with this idea. So you can create this perfect schedule and then something can happen in this case and it runs long and suddenly you are overlapping like you didn't intend to. Now you apply that to the other, let's get this one and it's going to break down immediately. So why does this unintended overlap happen? And this is data from three surgeons here, A, B, and C, who are performing all the same procedure. Let's have a closer stack to me. And up on this axis is time, okay, and then these are each of the steps of that procedure, just numbered out. And so each bar here represents one of their iterations of that procedure. Procedure one, procedure two, procedure three for surgeon B. And I'll just draw your attention to step four. Something happened in that case. It just ran longer. And that happens sometimes. And it happens for all sorts of reasons that we don't really understand. We don't have great data on what happens in the operating room, believe it or not. And so any of these things could happen. It might be mentioned in the operative report. It might not. And these are things including missing, telling is absent, of course. But also if the trainee is like, good or not very good or they struggle. If it's something to do with the patient itself or if it's a system factor. So we need to understand these things to begin to think about how to intelligently schedule surgery to maximize surgeon's time but still ensure that they're giving good care to the patients. So what it is, it's a balance here. Between patient waiting, which we never want, anesthetic time that's unnecessary. Or unattended surgery, where someone is doing it but no one's a responsibility to pay attention. We would never want anything like that. And then, but we'd also want the surgeon waiting. And this is a wasted resource for healthcare. And also there's a work-life balance thing. I mean, you know, believe it or not, we're people too. And, you know, to maintain, to prevent burnout and to maintain a good surgeon workforce, you want to also ensure that they're not doing things that are sort of non-value-added time. So we need better data on surgical activity. And that's getting back to this critical portion of the procedure idea. The idea that, so, you know, patients anatomy is going to feed in to the definition of what the critical portion of the procedure for that patient's going to be. The case factors, which include things really specific to that case. And then the surgeon factors, which includes also the ability of the assistants and that surgeon's familiarity with their team. If you're working with your fellow that you've worked with for the past six months, doing the same exact thing over and over and over, and they're good, and you know they're technically good, and you've given them a little leash, and you can see that they're doing the good job, that's the sort of, you know, case where you know that the critical portion, the part where you absolutely need to be doing it, is going to get smaller and smaller as the fellow is able to take over more control of that. So, you know, what people have asked for is why doesn't the American College of Surgeons just define critical portion of the procedure? And that would be hitting the central thing here. But one of the problems is it doesn't take into effect the factors that might modify the critical portion of the procedure for that case. Nevertheless, I took a stab at it, some ideas of critical portions. So the objective of the procedure, the part of the procedure might have substantial risk of adverse outcomes, and a part that requires intraoperative decision making. Now what I think is interesting about, you know, Larry's presentation, his most recent one, is, you know, for his cases, some of them, the critical portion of the procedure may not have even occurred in the operating room. It's that planning staff, or it's a couple of ideas about we'll make an incision here, an incision here, an incision here. But some of the technical aspects of that really aren't that critical. Some of them are, for his cases, it's very complicated cases, but some it's much more about the planning. And so it's hard to define critical portions for a given procedure. And then there's also this last part, which I think is important. And this means two things to me. So it's, part of it is if I tell you I'm personally going to be doing it, then I'm lying if I don't do it. So that is completely wrong. And then additionally, it's what I feel like I need to personally do. And let's get back to that team factor. So this idea that if I'm operating with a bunch of novices that have never done the case before, then basically the whole case is a critical portion because I'm the only one in the room who can do it. Whereas if it's a case that's quite routine, and I'm working with a team that has done it many times before, there might be very little of it that I personally need to do. We had some research just recently. Claire Smith, I don't know if she's in the audience, but she did some research with me just recently along with Christine Guyden, really neat stuff where she interviewed surgeons about their feelings about doing surgery on awake patients. So patients who are conscious in the operating. And you guys are probably already reading the slide, and so I don't need to go through it other than to say there's a couple of key things I would just quote. So because when the patient really sees that someone else is doing it, so the resident's operating on the patient, the surgeon is sort of helping direct them, there's sometimes a little bit of upsetting that group. So it's this idea of surgeons not wanting to have their patients be anxious or uncomfortable, despite perhaps something going on that they feel is okay. You know, they trust their resident, they know that they're doing a good job, they're watching and doing a good job in this scenario, but they're worried that the patient may get so anxious about that it may cause harm that was unintended. And then this one is sort of a shocking thing. And I believe that this surgeon is probably, again, a good person acting off that same principle of trying to alleviate anxiety, despite the fact that there's a bit of subterfusion there. And so what this creates is there's this tension between ensuring patient comfort, alleviating anxiety, ensuring good outcomes, but also giving residents appropriate clinical training. And an important finding out of this study as well, which I'm showing you is that many surgeons reported they just didn't do teaching during awake procedures, that they just did it themselves for these reasons, and it was they reserved teaching for when the patient's fully asleep. Well, that makes you wonder, you know, I mean, do you feel good about teaching or do you not feel good? And should we explore that a little more? Okay, so I don't know if this is gonna play. If I, no, it's not, can you play it or can I play it? I can, I got it. Okay, so very briefly, there are two surgeons here, one's holding the blue thing, one's holding the knife. Oh, and I'm just gonna, there he goes. Okay, who's doing the procedure? They're both doing it, right? They're both doing it, but one of them's the attending surgeon, one of them's the resident. The point is, it's really hard to define who, quote, does the procedure. Now we can generate some really interesting data about who's creating more of the technical moves or something, but the point is really, you're operating with your brain. You know, the attending surgeon's there, they're helping the resident, it's a technical procedure, it's a team procedure, and so really narrowing down, like, are you doing it or is your resident doing it? You know, unless you're not in the room at all and the resident is operating completely independently, the reality, any time you're around, you are doing it as an attending surgeon. And so that, again, gets back to this idea, this is something that Peter and I were just talking about, I think it was a really good point that he made, which was, it's, you know, the surgeon's duty to ensure that the procedure goes well, that everything goes off correctly for that patient, utilizing all of the resources that are available to that surgeon. So, you know, if that includes the trainees, that includes the delegates, it includes everybody that's around that. So the surgeon's ultimately responsible for the good outcome, but doesn't necessarily have to physically do every single part of the procedure. Okay, so this was along these same lines and I think it's important, so this was a neat New England journal article, and this is talking about the silence of the switch, and you can see the beginning here.  And so the two things here that they bring up as far as their critical steps, so one is the surgeon-patient relationship. This idea that if the trainee's gonna be doing it, they have to have some skin in the sort of ethical game here and actually help consent the patients, help the patient understand that the trainee's gonna be doing things in the procedure, and then there's also the subjective data, and so it's not just like what they're physically gonna be doing, but perhaps with the specific complication rates or additional risks that the patient may be taking on as a result of having that trainee participate in their surgery. So I think that transparency and truthfulness and training are absolutely ethically correct. I think they're clearly societally demanded, and, you know, one example of this is the surgeon scorecard. So if you're familiar with ProPublica, this caused a lot of stir about, I don't know, four months ago or something. But the idea was ProPublica released all this outcomes data about surgeons. So you can see here, you can look up a hospital, I looked up a random hospital, and, you know, names a hospital by name, and it says, you know, for each of these surgeons who's performing that procedure in that hospital, you know, these are their complication rates. And, you know, so this is a high complication, you know, at least one surgeon has a terrible complication rate, there's real data transparency that's happening out there. Now, this caused a big stir because actually their methodology was not great. And if you sort of go back and calculate some of the numbers which other people have done, they've shown that the likelihood of being, you know, in this group versus this group can be pretty close depending on how high of a volume you have. And so it's sort of unfairly marking some people perhaps as high complication or vice versa as low complication.  And so if it's not 100% accurate information, it's gonna be a problem. So we need more and better information, we need people to be doing it more. And I would say the same thing for the Boston Globe article, although I think it's brave and great that they're doing this, you know, they didn't show all the other times that this guy had his operative procedure. Maybe this is the same thing that that surgeon does every single time. This is the only complication they've ever had. Maybe we can't blame it on the overlapping surgery. Sure looks suspicious when seen in isolation. There's also maybe not enough data here. So again, we're looking at sort of the nonoperative times versus the operative times. And so what if this were the schedule that he saw? We said, well, gosh, you know, they didn't do anything. You know, the patient was being positioned and prepped and they were giving him an art line which took an extra hour and they're all these other things and finally when your operation was ready to start, that surgeon was ready to hop over and do the procedure so they never left Bobby Jank's room. You know, or conversely that they were completely overlapping or even better yet, seeing the critical portions of the procedure and how they were overlapping or not. And so I think you could have even more transparent data and then really get to the answer, do you have a physician who's maybe doing the wrong thing or do you have a physician who's actually really trying to do a good thing and just trying to maximize the amount of time that they can give the caring patients. So I think it's absolutely correct. I think it's a solidly demanded and I think it's technically possible. And this gets back to the stuff I talked about last year and I continue to work on my lab is with continuous data recording in the operating room, we can actually get at the answers to some of these questions. And we can balance the surgeon time, training experience and most important patient safety. So thanks very much. Hans is though you've answered all. Yeah, I guess I have, yeah, yeah, that's good. So, good. Excellent. Thanks very much. That's great.


Well, folks, welcome back to Nintendo Prime. And today we have four different news stories we're gonna be talking about. Well, one of the news stories sort of has like three stories involved with it because it deals with a Super Mario movie and it's incredible launch. Oh my gosh, it is setting records in several countries and has already become, well, so far at least at launch the best launched video game adaption movie of all time. But we're gonna get into that because obviously we don't have the full five day launch numbers and we won't have that until about Monday or Tuesday. That means that we also have news on Final Fantasy. We've got some stuff going on with emulators and Xbox and Nintendo's involvement in all of this and more. Before we get into this, I wanna remind you that we are on our road to 100,000 subscribers. And if we somehow get there by the time, Tears of the Kingdom comes out. We're gonna be giving away a Zelda Switch Edition OLED. We're also gonna be giving away, well, why not the Collector's Edition for Tears of the Kingdom as well? A Pinset and more. We're working with a couple companies to try to sweeten the deal so more people win. You guys are awesome. Thank you for tuning in and let's get into this news. Now, the first bit of news we need to talk about is how the Super Mario Bros. movie has been performing since it launched on Wednesday. According to Deadline, the Super Mario Bros. movie has had an incredible first day earning 66.4 million worldwide with 34.7 million of those profits originating from the movie's international release. Said international release broke records in 10 different countries including the best opening day for any animated film in the UK and Spain. So it's up there competing with the best of the best. The Super Mario Bros. movie has garnered plenty more impressive overseas records within its first day in theaters. The film became Universal's best opening day of all time in Mexico and Germany as well as the biggest opening day for illumination in Taiwan and Australia. Mario's animated film feature debut has also been good for the Chinese box office becoming the highest grossing animated film from Hollywood in the country since COVID-19 pandemic began in 2020. Current estimates expect Mario to dominate the box office during the film's five day Easter opening weekend with projections upwards of 200 million worldwide. This includes 125 million domestically which would almost certainly put the Super Mario Bros. movie at the top of the weekly box office if it were to earn that much. Given how many Easter eggs to the Mario franchise have been littered throughout the proportional material it's clear illumination wants audiences to come back for multiple viewings and to try to spot them all. Now again, this information we got right off a screen rant who was sourcing deadline. I'm honestly just really, really happy to see the Mario movie before a moment. We're not really done with that Mario movie news because well, it turns out that Shigeru Miyamoto can't help but keep talking about Nintendo and illumination. And now we're getting this bit of news right off of Nintendo life and it says it's still in the early days of the Super Mario Bros. movies already shaping up to be a huge success based on industry predictions and early box office data. For Nintendo and illumination it means the partnership will likely continue on. During an interview with screen rant Nintendo Shigeru Miyamoto confirmed this mentioning how he was sure the two companies would stick together going forward. Illumination CEO and founder Chris Melodandri reaffirmed this going on to describe the partnership with Nintendo as a really rewarding collaboration. He also noted how he had previously been invited to join the Nintendo board of directors and said the companies were already working together into the future. So that's obviously really, really good. No surprise there that they're gonna continue to work with illumination, especially given the success of the Mario movie. We're likely gonna get a sequel. We're gonna probably get other Nintendo movies as well. Eventually maybe Donkey Kong, maybe a Toad movie, maybe Zelda someday, Metroid, who knows where the limits lie. Now that being said, we need to get into our next piece of news and this is in regards to Gamescom. For those who don't know what Gamescom is, it's essentially the Electronic Entertainment Expo of Europe, except one that's ran usually significantly better and hasn't had as many controversies or problems.  We'll return on Tuesday, August 22nd from a column essay in Germany and I probably butchered the pronunciation of that place, but I just, you know, whatever, the tweet's on screen for you guys. Excited to be back in Cologne with the fans and the industry streaming video game news directly to you. Then yes, this does happen after Summer Game Fest and all that other stuff goes down, so any additional announcements for later in the year could possibly happen here and usually opening night live is pretty cool. Assuming that I can, it's at a time that works for me, I will probably live stream reacting to opening night live. All right, next up we have a confirmation of something that I talked about over a year ago at this point. And that is Final Fantasy Pixel Remaster coming to Nintendo Switch. I actually told you all from a source that this was happening a long time ago and I had a lot of people doubting me, hating me, saying this didn't age well, yada, yada, yada and here we are and just like many things it aged like fine wine because Final Fantasy Pixel Remasters is coming to Switch. This is a collection that's already existed on PC and it includes Final Fantasy, Final Fantasy II, Final Fantasy III, Final Fantasy IV, Five and Six. They've all been remastered in their nice pixelated forms and what's really cool is that they're coming this spring. So they technically announced that these remasters would be coming to PS4 and Nintendo Switch about four months ago, but now we have an exact release date. So they will be releasing at 8 AM Pacific time on April 19th. Now, why 8 AM? I don't know, but whatever, that's when they're going to be releasing. Now, there was a physical version available very, very shortly, but there were so few copies instantly sold out. People are trying to create enough demand that maybe they do another run of physical copies for PlayStation 4 and Switch, but at this point, it's probably gonna be a digital only purchase, but yeah, I'm just glad to see it coming and again, it arrives on April 19th. Our last story deals with the Xbox and why are we talking about Xbox Series SNX today? Well, it is because there are reports out there, rumors that Nintendo has banned and or blocked emulation on Xbox. Now look, the Xbox Series is well known to allow emulators and also have a dev mode where you could probably still access these emulators, but MVG, modern video game, put out there saying here in reports that Microsoft has blocked emulators in retail mode, which is the primary mode people play games on. Can't say I'm surprised, but you can stick to dev mode. Well, a person responded to them who has an email from the Xbox QA team and I want to read this email to you because yeah, Nintendo appears to have been involved heavily in getting these emulators blocked. So it says, hi there. Thanks for getting in touch with us about the recent ban on emulators on the Xbox storefront. We appreciate your interest and concerns. To answer your questions, the primary reason for the ban is related to legal issues with Nintendo. While emulating itself is not illegal, it can be used to play games from consoles that are still under copyright protection without permission, which can create issues with Nintendo and its affiliates. Additionally, we take security seriously and some emulators require permissions beyond what is typical for an app. This could create a potential security risk as these permissions can be exploited by bad actors to gain access to sensitive information. For those reasons, we have made the decision to ban emulators on the Xbox storefront. However, we understand that many users have dev mode enabled to run legal emulation. We don't seek to remove this ability as it doesn't grant access to the retail components of the system and is considered safe. Unlike retail emulators, dev mode is limited to certain functionalities and doesn't have system read write functionality. That said, we are still exploring ways to allow safe and legal emulation on Xbox. We are in talks with legitimate emulator developers to bring their software onto our platform while ensuring that all copyright laws and security protocols are followed. We appreciate your understanding and patience as we work through this issue. Our goal is to provide a safe and enjoyable gaming experience for everyone. And we are committed to finding a solution that meets those goals. If you have any further questions or concerns, please feel free to reach out to us, best regards, we're not gonna obviously get the contact information or the employee information here. So this is obviously where Nintendo, and yeah, the security risk is one thing, but clearly this happened because Nintendo didn't want public facing emulators to be supported in any sort of way, even though them existing is not illegal, and even though them existing doesn't mean that people are downloading ROMs through them, right? You still gotta find your own way to put ROMs with those emulators. It's interesting that Nintendo is doing this. It's not too shocking. It was kind of surprising that Xbox was so blatant and just allowing emulators right on their storefront. That that is definitely something that felt like a pretty bold move. Sony wouldn't even do that. Obviously Nintendo doesn't. And now Xbox doesn't either, except if you're in dev mode, which is a completely different mode. And I understand it doesn't give read, write access, which is important for emulation because obviously, hey, you gotta write ROMs to play them and boot them up while you can't do that in dev mode. You have to use like external drives and stuff, which again, doesn't really bother people that you have to do that, but it is just an extra step that isn't just where everything's located on the system. And that's sort of how Xbox protects themselves legally in those modes is, hey, if you are using illegally downloaded ROMs, they're not located directly on the Xbox in dev mode. So then, you know, they kind of protect Microsoft in that case, and they're just hosting the emulator and emulators are 100% legal. Now, a lot of people might come at Nintendo over this and say lots of nasty stuff because Nintendo's been anti-emulation for so long. And it's fair, but also it was pretty bold of Microsoft to think that Nintendo wouldn't be perturbed by just offering freely, easily available, right in the Xbox store downloadable emulators that do, you know, in some ways promote piracy. I know that we don't like to go there because not everyone that emulates is pirating games, but we also can't ignore that that is something that does happen. And, you know, Kudos to Xbox for at least not getting rid of them in dev mode. So people, and by the way, every Xbox Series S and X can be a dev unit. You can enable dev mode, but it's a little, a lot of people like having them not in dev mode because obviously that not having that read-write functionality can be a little bit annoying. But anyways, you guys let me know you think about this down in the comments below. All of these stories, pretty amazing. I know guys, look, we went through a video without any Zelda. I almost made it to the end without even mentioning it. But you know what? Hey, we aren't just a Zelda channel, so it's a nice kind of reminder. There's other things happening in the gaming world and that's your latest update. Thank you so much for tuning in and we'll catch you in the next video.


Okay, let's get started on the next session. Next session I'll hand over to Master Chen in a second. This is the follow-up kind of talk to a 2015 Skytalk which was automating, stalking, and now this is the antidote to that of a stalker and a haystack, and without further ado, I'll now hand over. Thanks very much. Hey, everybody. So first of all, I want to say thank you to the Recon Village. I want to say I love how big DEF CON has gotten. I really do. But the villages is kind of, I like speaking more of the villages because it's more intimate. I get to see more faces, like literally see more faces because after about 30 feet I'm blind anyway. So it's good to see everybody here. How many people are hungover? Okay, that's why you're all here. All right. Because nobody here is hungover. All right. Okay, awesome. Anyway, so my name is Master Chen and today we'll be talking about finding stalkers in haystacks. Just like the introduction. In 2015 I did a Skytalk called automate your stalking. And what I did was basically monitor the person, my subject or my target without following them directly. And I'm going to get into a little bit of those details. Okay? First off though, who am I? Here's the laundry list of stuff that I've done. I've written for 2600. I host a podcast here locally in Las Vegas by the way born and raised. So it would be a shame if I don't attend DEF CON, right? So I've written for 2600. I do my own podcast here in Vegas. I am the Sinchop secretary, the hacker space secretary here in Las Vegas. And here's some of the times that I've spoken before. So I've started it with B-sides. I spoke at DC 101 in 2016. I've spoken again at B-sides and of course in 2015 down here at the bottom is DC Skytalks. And of course the reason why that's red is because this is the follow-up to that talk. And before I get started with the meat and potatoes, I want to know a little bit more about you guys. How many people, this is your first DEF CON? Okay, cool. Awesome. Thank you and welcome to DEF CON. Three days later at the end of it. Okay. How many of you guys are phone freaks at all? Anybody, does anybody have phone freaks a little bit? Okay, cool. Awesome. I did that talk on weaponizing your feature codes back in 2016. Turning, you know, Star 6.9 into a call flutter or Star 6.7 into a SMS flutter. We'll talk about that later. Okay. Anybody here psychology geeks? Anybody who's into psychology or maybe social engineering? Okay, cool. So I have a bachelor's degree in psychology. I've never used it in the technical field. I'm a Voigt administrator by trade. So hey, seize, get degrees, whatever. All right. And did anybody make it to my talk back in 2015? Okay, well, Connick, you don't count. All right, cool. So everybody here is kind of like new to the concept or new to what I've been talking about. All right. So before I show the next slide, I do have, these are the harder questions in the next slide. How many people have been stalked before? Either in real life or online? Okay. Of course, this is why you're here. Welcome. Okay. Hopefully I can help you and, okay. And how many people have done the stalking? How many people have, this is where I was hoping that no hands were raised. All right. Okay. Thank you. Keep an eye on that guy back there. So those are those questions there. I really was hoping that I got zero. By the way, I did this guy talk on Friday and I got like three hands. So you guys were much better statistic. All right. So these are standard disclaimers. Again, before we get into the technicals, I am not a lawyer. I am not a stalker or I ain't no I ain't us. I am not a lawyer. I am not a stalker. Okay. Stalker is bad. Please do not do it. But you can let me do it for research purposes. Now this research only covers one attack vector. We're talking about social media, specifically Twitter. Okay. So that's where we're going to focus on. But of course, later on, I'd like to branch off into other types of social media and maybe apply my algorithm to those types of media. Okay. So why this talk? Again, I've been saying this like three or four times. You know, 2015 automated stalking. I felt bad because the people who came up to me afterwards were asking about the stalking method. Like, how do I do this and how do I do that? And I was like, you know, you're asking very pointed questions. I don't know if I might have released a tool that made it easier to be a creep.  I just do things because I'm interested. This is a hobby. It's not that I actually want to stalk people. I just wanted to see what kind of data is out there. And that's my only motivation. And so when I saw people coming up saying, how do I do this and how do I do that? It made me a little bit nervous. So that's why we're here today. This is the this is the bandaid. Here's the repository for the code that I wrote back then. I did write it in Ruby, but now it isn't Python. I've been convinced to write in a different language, but whatever. And there's the PDF version of the talk, the slide deck from back then. Okay. Okay. So I'd like to, even the playing field today, and that's why we're here. Okay. All right. A quick recap of the 2015 talk and the methodology. Okay. So these are some of the stalker statistics from the Bureau of Justice Statistics. That's their website there. And what they told me and the statistics haven't changed. So I tried to check their statistics to see if that has been updated, but they showed the same numbers. So 14 in a thousand people have an issue with stalking, whether it be in real life or online or some form of it. Okay. And so if you want to look more at those statistics, they are there. There's a link. I only have about a half an hour. I want to give you guys what I can. So what did I do back in 2015? Well, instead of, and I'm going to be using some of you guys, I'm going to be looking at you. Okay. But I don't know you specifically except for this guy right here. So instead of following you directly on Twitter and knowing what you're up to and whatnot, I'm going to follow all of your followers. Okay. I'm going to follow all your followers and not you directly. And they are going to tell me what you are up to. Okay. Now how do they do that? They'll tag you in, you know, check-ins when you're checking in at the bowling alley or when you're checking in at the movie theater. They'll tell me where you are. They'll tag you in a photo with your face on it, even though you didn't tag yourself in it. They tag you in it. And I don't need to follow you directly. Especially if you've already blocked me or you've already thought that I've been a creep, right? And so back then in 2015, Instagram was notorious for sharing geolocation data. They're better at it now. And they don't actually tag you with the location of where the picture was taken slightly better. So there you go, right? Now the cool thing about this though is since I got the computer to do it, I didn't have to sit at a computer to monitor anything. I would actually get notifications on the smartwatch, which back then was the pebble. God rest that company. I got the fit better. So it is what it is. But I got notifications on the watch when I had, you know, activity from my target or from my subject. So I would be notified, oh, so and so is doing this. So and so is doing that. And for the most, for most of the time, they were none the wiser. Okay. So again, I don't want to follow the target directly. Why is that red flags, right? Red flags, you don't want to follow the target directly. You don't want them to know that you have maybe a ghost account or a sock puppet following them for you. You just don't want to arouse any suspicion. So how do we stop that? Well, instead of following them directly, we follow their followers. And that was the methodology back in 2015. So now the question becomes, well, how do we find the stalker? Now I'm not good at finding memes. I'm not good at making memes. So insert dank meme here. Use your imagination. You guys can do that, right? You guys did say you were not hung over, right? All right. So here's a snippet of the code that you can now find on my GitHub repository. It is a new repository called anti-stalker bot. Now the meetup, this is a big chunk of the code. What we're doing here is I'm going to each and every one of my followers, taking their followers and putting them into a raw data text file. Just a whole bunch of Twitter IDs and you'll see some of that baseline or you'll see some of those screenshots in a little bit. So again, I'm going to Connick, I'm doxing you, sorry. I'm going to Connick's followers, taking all of his followers and putting that in the file, yours putting in the file, putting in the file. So I'm not following any of you guys. I'm putting that all in the same file. And now there's there's a reason for that. What I want to do is as the target, as the person potentially being monitored, if I have a little bit of text savvy, I want to turn my followers back on them so that there's this reverse engineering, right? Or there's this reverse of what I did back in 2015. So now I'm going to use that raw data file to find out if there's any correlation, if there's any similarities to what I've, you know, to what I started. Okay, so let's talk about a baseline. Okay, when I started this research, I only had 883 followers. I now have almost 900 and almost actually almost 1000. So good press, right? Now, I had 883 followers. And of those 883, 83 followers, I followed all of their followers. Okay, and I got 1.03 million instances of followers. Now, instances is a very important word, right? So I've taken all of these, all of these followers, put them all in a data file. Now, of that 1.03 million, though, there were only about 815,000 unique IDs. Now, how do we explain that? Well, you two, you three or four may have the same types of followers in your list, right? You all might be following or the same type of InfoSec blog may be following you, or the same type of psychology blog may be following you, or you guys may just have mutual friends. So the first thing that we do is we have to find unique IDs. Okay, we have 1.03 million instances. These are not all unique. There are 815,000 unique IDs. And it's important for me to convey that message so that you guys understand where the data is going, okay? So if you look at it, that's about a 50% follow rate when you see me or my ID showing up 450 times. That just means mutual friendship, right? If you're following me and I follow you, I'm still in your list. We're friends now, right? And I use friends because how many of us are actually friends with people that we are friends with on social media. A lot of F words today. So that's why you have that 50% follow rate. Because for the most part, I'm following you, you are following me, we're all having a good time, right? And that's why I show up 450 times in the follow rate of my followers. So here's the raw data screen cap, okay? This is all not organized yet. These are just unique Twitter IDs and that's why I blurred out part of it so that, you know, you don't see who's following me, although that is kind of public information, but at least I'm not going to be responsible for any data leakage. So as you organize the data, you see that the high follower rates flow up to the top. Now that 450 is myself. That is myself in this baseline. I am following that follow rate. That's 50%. Okay? Now everybody else, you'll see that the next highest number is about 124, even though I wrote a red line through it. But the next highest one is like 124, 120s down to the 90s.  You share interest. Probably a lot of people, if we were to look at that data, these are a lot of people who are probably attending DEFCON right now because they share my interest. They share my interest in psychology, phone freaking, InfoSec, et cetera, et cetera, et cetera. Now in this next slide, this data is showing the same thing just in two different ways. And we'll get into this here. So up at the top, at the top left, you see that number is 713,000. Okay? That's 713,000 unique IDs that are only following my followers once. Now we're still in the baseline. So this is actually normal activity. Okay? It is normal for you to only have one piece of correlative data among all the followers. So these are all unique. And there at the bottom right is the 450, 450 being me. Okay? So that pie chart on the left-hand side is showing you that the 88% of my followers or the followers of followers are unique. They are people who are not in correlative data. They're not in InfoSec. They're just people who just so happen to be there. It's not, it's not anything that drives back to you specifically. So now my next question is before I see a preview slide here. Has anybody followed me organically before this? Like before you even knew about this talk, has anybody been following me before? Oh, cool. Awesome. Awesome. All right. Now my next question to you guys then, all two of you. Have you seen this new follower in your list? No? Oh, he's checking right now. So my question is have you seen this person? All right? My follow-up question is has anybody in here saw the, have you guys seen this movie called The Last Dragon? Show enough? Anybody from the 1980s? One of those black exploitation films? Right? It's a really good movie. Kind of campy, but it's supposed to be because it's the 1980s. So there's a reason for that. I'll explain that at the end. But that's the account that is my ghost. That's my puppet. That's the person who's now going to stalk me. All right? So now after I had this script run and I ran it overnight, so I would go to sleep with the script running I'd wake up to all this raw data. All this really cool raw data that I can sift through later. The stalker account. This gentleman right here, Bruce Leroy. Yeah, Bruce Leroy. Yeah, you saw, you found it? Perfect. That was me actually. So I was able to follow 800, sorry, 813 of the 883 followers, okay? So that gives you about a 92% follow rate. The only people that I was not able to follow are people with private accounts, verified private accounts, protected accounts, whatever you want to call it. But those are the people who I couldn't follow. These are the people who, you know, they want, you need to get permission to follow them. Usually they're, I don't think they're journalists, but they're people who are very private people, right? I'm sorry? There you go, see, verified data, cool, live. So the next highest number, again, was myself, and you'll see that in the next screen cap. So we're going to go back to some screenshots, and you'll see here I scraped the raw data. The data has kind of changed, okay, but here's the important part. At the bottom, you'll see that the highest follower now has 812. Now, this is not normal, okay? What I'm saying here is the data shows that having a 92% follow rate is not normal, and that's where you find the anomaly, right? Because the next one is 452, which, by the way, is me, right?  Friends, we're friends. So it's very interesting to have a 92% follow rate, okay? Now, you might notice that in the last slide there was 450 followers being myself, and now it's 452, it's because I took a little bit of a weekend, and so I started the first scan, and then the second scan was stalking three days later. So hey, I might have gotten a little bit more popular, I don't know. But here's the new data, and here's what the new data shows. You'll see that in the blue, it's still 88%, because that's normal, right? 88% of my, the followers of followers are unique IDs, but you'll see in the right hand side, okay, you see again that's still 813,000, alright? But at the bottom, you'll see the 450 there, and then you'll see way in the right side, 812, and that's where you find that scum of the earth coming to the top of the drink. And so this is how we're using the analytics to find that in particular person. So here is the, here's the data in comparison, right? 883 followers, I was able to follow up to 813 or 812, depending on when I pulled that statistic, the percentage doesn't change. But there it is. Now I did want to check to make sure that Shaolin Chenpo, which by the way was that ghost account, that was the official name, not the name, but the Twitter handle, okay? I wanted to make sure that it wasn't following me directly, which it is not, because I searched for that, and that's the only thing that came up. And for those of you, right? I've actually spent some time in the Shaolin Temple to train. I tried to grow my hair out for MohawkCon. I didn't have time. I usually shave my head because I do martial arts with the monks every now and then. I choose to shave my head. I'm not a vegetarian or anything, but that's just up to me. So here are some reminders. The problem with social media is it is public by default, right? Now I understand that Twitter uses it as a megaphone. I get it. But there is correlative data here that shows that you can be monitored without being monitored directly. And that's the important part here. So just keep in mind that Twitter is public by default. A lot of other Instagrams, or Instagrams, a lot of other social media is public by default, and that's the problem that we have here. Now what I'd like to do moving forward, of course, is use my method, use this to against other types of social media. Maybe not Facebook specifically, but definitely Instagram. And I have an idea for how to maybe analyze hashtags. We'll get to that. Maybe next year. Right? So here are the resources and links that I have here. This link right here is the new GitHub repository for what I've currently changed or what I have for this talk today. And if anybody here has been a victim of stalking, whether it be cyber or take a drink. We're cyber, right? I can't believe I used that word. In any case, if you were stalked on the internet, please go here at the second link. It is a way to complain to the government about it or to find resources on how to handle that type of thing. I don't condone stalking. I don't like stalking. I just did it to see if I could do it, really. And another thing too, one of my subjects from the first time I did a talk like this, I actually followed a handful of people and kind of obfuscated that data so there wasn't any specifics about them. And I did go back to see if one of the subjects had maybe learned their lessons. And the funny thing is a lot of the followers of this particular person, they're all private accounts now. I was only able to get a 50% follow of the data, as far as data goes, I wasn't able to stalk them accurately. So they didn't give me accurate information because that was all private accounts and I can't follow private accounts. So it was a good positive change, so I felt good about it. So education, right? So in conclusion, I think I found it. Are there any questions? That was pretty quick!  Question. Right. Yes, this is definitely a shotgun blast type of method. So the question was, for the video camera there, the question was, is there a way to wait the accounts and see if maybe there's friendships, like true friendships among people, right?  Is there a way to wait them so that their data is more pertinent to what we have here in the set? That is in the works. Now by no means am I done today. I'm presenting what I have currently. I would really like to partner with anybody out there who has really good coding experience. I am not a software engineer.  I throw code to the wind and see if it works. And that's just how I work. So I'd like to go ahead and take a look at some of the things that I do with Cali module or, you know, put in a module of some sort of Cali application. Long-winded to answer your question, I have not waited anything yet, but I would like to. And this is, today is by no means the end of my research. The thing is, it becomes a chess game, right? So now I know how to do anti-stalking. So now as the time goes by, I think this is going to be where I can really sit in for a while and really dig into that research. So that is in the future. Thank you. Question? Yeah. Yeah. Right. So the question was, is it Twitter's responsibility to detect stalking, right? Essentially, bottom line. Okay. So I'm very weary about saying it's so-and-so's responsibility. I understand that not everybody's technical. I understand that not everybody's going to run this code and then do this type of analysis. I get that part. But to say that it's somebody's responsibility for your security, it's a little weird, right? The companies do what they can. They do their best to mitigate certain types of risks. And again, this is just maybe my hacker mentality, which is I'm going to analyze it, right? I don't want to necessarily say that it's Twitter's accountability. Maybe it is. I don't want to just say that, though. Right. Exactly. So maybe if we can get right. So maybe if we can get Twitter in front of Congress, maybe they'll change a few things. But again, the problem is that Twitter, by its nature, by what it does, it's a sounding board. By its nature, it's public by nature. So I don't know if you necessarily want to change that business model, right? The thing is maybe you are now a little bit more aware, a little bit more educated about how that data is used, right? So I don't know if that's the answer. I don't know if it is the answer to make everything private by default, but it is something to maybe explore. I'm trying to be as objective as possible here. I'm not putting anybody under the pressure. So when I did this talk on Friday, I invited everybody to the bar with me afterwards. So same invitation here. We can keep talking. We can keep having this discussion. Question. So that's, oh, cool. I want to get to your level. Okay. Right. So the question was, does this scale up like from, you know, I only have about 800 followers, does this scale up to somebody who has somewhere below 800? But that would be very interesting. I would imagine that the data that you see, the graphs that you see are going to be very similar, though, because even with bot accounts, right, you say that maybe a lot of your followers are bots. Oh. Okay. So your followers are 98% real, but you get attacked by a lot of bots, maybe, right? Okay. So the thing, I will say that the thing that Twitter is using, you have to have some sort of valid, and I use valid in air quotes because I am a VoIP engineer, valid phone number, right? You have to have a valid phone number now to sign up for a Twitter account. Okay. So you could maybe get a Google voice number, or actually, you know what, I don't even think that works, but you have to have a valid phone number to start an account. And that's because of course, all of the latest data, okay, this is me playing chess, okay, so I don't actually suggest this to any stalkers, but a way around that would probably be a burner phone because it's a legitimate phone number, it's a mobile phone number. I'm not sure why Google voice doesn't work. And now I'm just rambling. So to answer your question, I believe that it could be scalable because I don't think the data itself will change except for these numbers. We have thousands and thousands of unique followers and only maybe one, maybe two anomalies, right? The only anomalies that I found were the two, were myself and the stalker, and that's what we found here in the data. So I hope that answered your question. Okay, cool, thank you. Question, way in the back. Oh, fuck, yeah, sorry, yes. I'm old school DEF CON, okay, I can swear, right? I hope you like it. I do want to expand this type of research or this type of analytics to other social media. But I know I can't do it all alone. So if you guys want to collaborate, that'll be great. My next target is actually Instagram. Don't ban me, Instagram, please. I haven't even started the research yet. But yes, I want to, it's not just going to be Twitter, I want to analyze all types of social media to see what I want to check out next. Again, I want to make what I've written into a little bit more of a module that we could put in reconNG, maybe a Maltego transform, something that's bigger than myself. That's my favorite part of doing this type of research. I know I can't do it all by myself. I might have met a couple of you guys in line. I like contributing to the bigger picture. So absolutely, right? Next question, right there? Oh, yeah. Sure, yeah. All right. On the same day, right? Yeah. Right. So the question was, or it was kind of like a statement. Thank you. I'm sorry, I'm three shots in now. Remember, no breakfast. I haven't had breakfast yet. But yes, so the question or the statement was, with this method, of course, you can see this follower or stalker had started following all of your followers, and you'll see that in the data that they started following at pretty much the same exact time. That is a way to maybe detect this. So again, this goes back to the chess game that we're playing with the stalker, right? So of course, there are ways to detect this method now, right? So it goes back and forth. This is the cool part of the research. When I realized I had one and done speech or one and done presentation and then I'm done.  No. Okay, that's why I'm just curious, right? So with what I was doing here, I noticed that there's, okay, rate limiting, right? So the rate limit, and this is kind of interesting, I was only able to query about 15 accounts every 15 minutes or else I was able to let this program run one every minute. Okay, I'm going to query your account every minute or once a minute or once and then wait a minute, query your account, wait a minute. So I was only able to query 15 accounts in 15 minutes. It took 14 hours or something along those lines. I can't remember the math but it took a long time to grab all of that data. Now yes, I have 14 hours to let the computer do the analytics while you go have a Hawaiian barbecue or whatever you're trying to do. So these are the types of limitations that I ran into. I don't know if that, you know, but these are some interesting things that I found in the API myself. So cool, very cool. And you know what guys, I'm actually very excited that we have a lot more question and answer time here today because I got almost no question and answer time back here. Yeah, yeah. Yeah, so the suggestion is of course using AWS and the thing though is the API is tied to your unique Twitter account, right? So like when you sign up for a Twitter account or to develop for Twitter, it's assigned to a unique account. I'm sorry? Not that I well they maybe do. I didn't check that far. Okay, so yes the question was can you just use AWS to use multiple accounts to scrape that data? You probably could with a bulk API. I use a single one to one account API key limit there. So there's that. See, I'm cool with these open ideas. This is now where it becomes a discussion, right? Question, yes. Right, now of course there are ways around maybe the rate limit.  I'm not familiar necessarily with neural networks. I'm just now getting into the whole idea. Okay. Okay, that's very interesting. The question was a whole bunch of stuff about neural networks that I actually have not explored. So I'm sure, let's talk. I'll get into that eventually. By the way guys, again, I'm not a software developer.  So it's really cool to have discussions with you. I am learning as I discuss with you, right? So it's cool. Question. Oh, yeah, dude, sorry. Let's go to the way back. So I am at Chenbox, that's C-H-E-N-B-0-X on most social medias. I'm on Instagram. I am on Twitter. Let's see if you can find me on Facebook. You probably can. It's really easy. I'm not going to hide so much. But I also do this podcast here locally in Las Vegas. We are Gray Noise Media. It's a Swedish domain.  So we can actually have that domain. That was the only rule to have that domain.  So I do that podcast weekly. And we talk about InfoSec, we talk about nerd stuff and nerd culture. The show goes on without me now and I love that. So while I'm here at DefCon, they still did the show bigger than myself.  So follow us you guys. It's a lot of fun. It's just as drunk as I am now. I am like that every Friday night. My doctor still hasn't detected any liver damage. Yeah, so there you go. We can talk about this all day, you guys. I am totally open to meeting you guys outside in the hall and just having discussion with you. My favorite part of the conference is talking to all of you. It really is. I can do a contest later. It doesn't matter to me.  This is what I do. I talk to people. I ramble, but it's a lot of fun. So in any case, thank you everybody. It's been a lot of fun. Thank you.


In this presentation, we will record a journal entry related to cash dividends for a corporation. Information on the left side, we're going to record that into the general journal here and then post that not to the general lecture but to a worksheet to get a quick example of what will happen to the accounting equation and individual accounts. Our trial balance is assets and green, liabilities and orange, then the equity section light blue and the net income in dark blue. Note there's nothing in the net income at this point in time. It's going to be just a short trial balance to give us an idea of something in balance so that we can post things out and see the effect that would be on the individual sections of a trial balance. Of course here we're focusing in on what is different for a corporation that being the equity section. The debits are going to be non-bracketed or positive. The credits will be bracketed or negative for Excel and that shows that the debits minus the credits will then equal zero or that zero representing debits equal the credits. So we're going to post this information here and we're going to have a dividend. We're going to have the dividend declared and then we are going to pay the dividend. Now for a corporation it's important to know what is a dividend before we take a look at this. There's a $2 cash dividend. How does a dividend compare say to a partnership or to a sole proprietor? The dividend represents the accumulation of earnings that are going to be paid back. So for a partnership if I was a partnership or a sole proprietor then our business would earn money hopefully and at some point we would accumulate cash by through that earnings and then we can take that out in the form of a draw. From a partnership or a sole proprietor we can decide whenever we want to do that to do that and take it out with a draw. With a corporation however because all the stockholders are the same and they all kind of get some voting power in the stock then it's not as easy for any individual owner to just take out money because we don't have a capital account for each individual owner. All the stocks are the same. So in other words because all the stocks are the same if we give some money to an owner we have to give the same amount to all owners. So we have to have some standardized process then therefore for something like a draw which is a dividend for a corporation to be given and so there's got to be we have to agree on the dividend so there's kind of a bureaucratic process to issuing the dividend. So that means it's going to have a three step kind of process to give out the retained earnings the accumulation of earnings less what's been distributed less dividends. So we're going to take what's been earned and retained earnings and we're going to give some of it back in accordance with what the corporation has decided to do. We're not going to take it out of the investments which is represented by the common stock and paid in capital. That's one reason we really want to break out the investments versus the earnings that have been accumulated and not distributed for a corporation. So that's what we're going to do so to do that we basically have to the corporation has to first decide that they're going to give a dividend and once they do that then they've basically created the intent and therefore the liability to distribute the dividend. Then the corporation has to decide when you know that the people holding that dividend who's going to get the dividend what if people buy and sell stock we need to make sure that we know the point in time for which the dividend payments are going to be paid to whom. And then we need to actually pay the dividends at some point in time. So there's really three dates that are happening here. There's really two dates that we need to know in terms of recording journal entries when we declared it and then when we pay it. And because of the bureaucratic process they won't be typically the same day. So if we declare the dividend we're going to say that there's a $2 share cash dividend. So first question is cash affected at the beginning. No it's not affected because we're not going to pay it yet. This is just us making the dividend we in essence owe the dividend. Now typically I would go to then what did we receive but and here we're distributing so that the other you know what really happened is that we owe the dividend we're going to owe it in the future. Cash isn't paid yet but we've declared we've made a commitment. So what we're going to record is a liability. We have a common dividend payable. We've said hey we're going to do this. This is going to happen. We've got a payable. We've incurred a liability. We have kind of a liability that we've told ourselves. We as a separate entity to the owners owe the owners money. So we have this payable account here. It's a liability. We're going to make it go up by doing the same thing to a credit. So I'm going to copy it right click and copy that liability. I'm going to put it on the bottom. So I'm going to put it here in B3. Right click and paste 123. And that credit, we'll see what the other side's going to be first. The other side it's going to come out of retained earnings. And we could put another account called dividends and similar to draws account and then close it out to the dividends account in a closing process. Or we may just take it directly out of retained earnings. So for this example we're just going to take it out of retained earnings. We're going to reduce retained earnings. This is the accumulation of revenue over time. And then we're going to distribute that to the owners eventually through the cash. Currently go into a payable that we'll pay it later. So this has a credit balance. We're going to make it go down by doing the opposite thing to it, a debit. So I'm going to right click on that, copy it, put that up top in B2. Right click and paste 123. Now how much are we going to pay here? So if we just look at our information here, we've got common stock, $5 part, $600,000, I don't see how many shares are outstanding. So, but we could do that because there's a par value. We could figure that out by taking the $600,000 and dividing by the par value of $5, giving us 120,000 shares. That's the beauty of the par value. It makes it easy for us to standardize this number and work with that number even though we got paid something over and above for the initial investment. So I'll do that same calculation here in C2 where we will say equals $600,000 divided by $5,000 and enter $120,000. Then we're going to have a credit for the same amount. I'm going to do that with a negative of this number. You could just put negative 120. I like to use the formula whenever possible. So there's our first journal entry. So I'm going to record this. Here's retained earnings. Here's retained earnings down here. We're going to be in cell H15 where we will say equals point to that 120,000, bringing the 658,000 down by 122,538,000. And there's the common dividend payable. Should be like common stock dividend payable. Here it is here, a liability. We are in cell H10 where we will say equals point to that 120, bringing the balance from zero up by 122, 120. So we're back in balance here. Debits equal the credits. Note what has happened. Liabilities went up because we've basically now told ourselves, we've committed to paying this to the owners. And the corporation now is committed to doing so, owing a future $120 cash dividend to the owners. The other side is not an expense not reducing net income because it's not something that we are incurring in order to generate revenue. This has nothing to do with the performance of the business, how the business is doing. So we're not going to lower net income with an expense. What we're going to do is take it out of the retained earnings, take it out of the equity section, as we would if it was a draw for a sole proprietor or partnership. So we're just reducing the retained earnings. So retained earnings was at 658,000, the amount of earnings that have been accumulated over the life of the business, less any distributions we had prior had. And then we're going to reduce it to 538,000. So that's going to be our transaction. Now sometime in the future, of course, we are then just going to pay off the common stock with cash. So in that journal entry, cash will go down. Cash is a debit balance. We'll do the opposite thing to it and credit it. So I'm going to copy cash, right click F7. Going to go back up top and put that on the bottom. I'm going to skip one line, then skip another line to put it on the bottom here in B6. Right click and paste 123. The cash we're going to pay in D6 will just be the 120 that's in there. So I'm just going to put a credit 120,000 and enter. We're going to debit something 120,000. So I'm going to put a negative of that number. You could just type 120. I like to use the formula. And then that's going to, of course, just be the common dividends payable. Has 120 in it, it's going to go down. We're going to do the opposite thing to it, debit it. So I'm going to right click and copy, put that up top in B5, right click and paste 123. Then we'll record this to our trial balance. So here's the 120 common dividends payable. Here it is on the trial balance. We want to be in cell H10, double click on it, go to the end of it, plus point to that 120, bringing the 120 down to zero. Then we're going to go to cash. Here's cash. Here it is on the trial balance. We want to be in H7, where we will say equals. Point to that 120, bringing the 1,388,000 down by 122, 1,268. That then brings us back in balance. Note there's still, there's no effect on net income. Even though we paid the cash at this point in time, we didn't pay the cash in order to help generate revenue. It has nothing to do with the performance of the business in terms of revenue generation. All it has to do with is us paying the owners for some of the accumulation of revenue, which we had decided to do in the past and therefore created a liability, which we are now paying off with the cash. If we look at our stockholders' equity then, a little format here, we can say once again, the most confusing piece is really the stockholder equity components here, which we're going to say that there's $5 par value, 150,000 shares authorized. How many shares are outstanding? Well, that didn't change because we didn't change how many shares we sold. It was 600,000. That's how much money is in the common stock. And they're all standardized $5 per shares, what we sold them all for. Therefore, 120,000 commas. And then we're going to just bring over these dollar amounts. So in M10, I'm going to flip the sign, I'm going to bring that 600 over, but flip the sign. So instead of equals, I'm going to put negative of that 600 and enter. Additional paid in capital, I'm going to bring this over and flip the sign. So rather than equals, negative of that number. And then we'll add them up so I can see the difference between the amount that has been invested versus the retained earnings. So here we're going to say equals the sum, double click the sum of these two. And then we're going to pull over the retained earnings, which has differed now. This is the accumulation of revenue less the distributions, the dividends over the life of the company. So in N12, negative of the retained earnings, 538. And then we're going to add these up equals the sum of the 710 and the 538 or 1,248. This representing the net value of the company, what is owed to the owners, also representing assets minus liabilities, 1,248,000. If there was only one person that owned all the corporate stock in theory, the corporation would owe them or he would have or she would have a net worth, 1,248,000 on a book value method. We're going to break that out between how much was invested. So if this was just one person that owned all the stock, they would have invested 710,000 in the company, their original investment. And the company would have earned over and above that original investment less what has been distributed out over the life of the company, 538,000. So in other words, we can distribute 538,000 of the earnings without dipping into any of that 710, which was originally put into the company in order to help generate these earnings.


We're here at ITU Telecom World 2016 in Bangkok, Thailand. I've got a great pleasure being in the studio today with Jean-Paul Scheb, who is from LSTelcom SES. Jean-Paul, thank you very much for your J.P., as you prefer to be called. Thank you very much indeed for being with us in the studio today. Thank you for having me, Max. Now, I'd like to start off by asking you a little bit about LSTelcom and what you do and what are the main developments that you're working on? It's a very open-ended question, so I'll try to be brief, but not too brief. LSTelcom is an engineering company, and we provide solutions, software and hardware solutions for the management of the radio spectrum, the RF spectrum. Therefore, our solutions are targeted at regulators, first and foremost at regulators, broadcasters and telecom operators. LSTelcom is an international company by almost definition and given our market, headquartered in Germany, very close to the French border, and I'm heading the French office of subsidiary out of Paris. We're working on very exciting products at the moment, and I believe, especially in our business, we are at a cornerstone, at a turning point of the product and services that we can offer to our customers. If I can be maybe a little bit segmented into two or three main lines of business that we have. The first is spectrum management. Spectrum management systems have been around for a while. Today, we are pushing the envelope in two main directions. The first is e-licensing. E-government is becoming a reality. It used to be a theory now, it is a reality. And by pushing that to the next level, and I mean by that, being able to do some of the spectrum management on mobile, by doing it online in cloud services, we are providing huge value to our customers. The second is the spectrum monitoring. In the old days, the traditional systems are always based on aposteriori monitoring. You have a problem, you call the regulator and they go and find out what happened. Today, we are able to do continuous monitoring. We are almost able to predict interference before it happens, but at least we are able to find out what happened after the fact by continuously monitoring the spectrum, raising alarms. So these are the two main developments we are working on right now. And how does LSTelcon contribute to making the world, as they have been talking about here, better, sooner? In many, many different ways and they are all quite exciting. First and foremost, our customers, as I said, are essentially regulators who themselves have customers or stakeholders, operators, and then eventually the public. By bringing the levels of automation and e-licensing to the next level, we make the lives of our customers much easier. We make their work much faster. We make things happen much sooner. By being able to issue licenses fast, by being able to make decisions based on facts and data and analysis, we are able to bring technology much faster to the market. Some practical examples, the digital transition. When we're about, for example, to re-plan digital TV, to make way for digital dividend and mobile licenses, being able to do that in an efficient and fast manner brings the next technologies and licenses 5G closer to our door. So that's sooner and it is also better. Fantastic. And in terms of collaboration, how important is collaboration in industry for you? Perhaps you could give us an example of that? Definitely. Collaboration in the industry is essential. We're in a niche market. We're lucky enough, but it can also be a curse to be, I consider, the leader in that market. Nevertheless, our customers have existing systems. They have legacy systems. They cannot always go for the best, which means Alice Delcom, in my opinion. And therefore, we need to work with the existing systems that they have. We're also, even though we try to be the best at everything we do, we cannot be the best in everything. I'll give you some practical examples. When it comes to consulting work, we do quite a lot of consulting work. We sometimes need very narrow expertise, for example, in economics, in telecom law. And therefore, we partner with established law firms or established economics firm to help us provide the best value for customers. We work with equipment manufacturers, the likes of Thales, the likes of Rodentroats, who have very good equipment and sometimes already deployed at the customer. And our systems need to work with their systems to provide the best value to our customers. And finally, I'd like to ask you a question. I've been asking everybody who comes into the studio here. Why is it important for you to be here? What's the value of attending events such as ITU Telecom World? We've been coming to ITU Telecom World as long as, at least I've been with the company and even in the industry. Obviously, ITU Telecom is where a lot of regulators meet, a lot of decisions are made. It's extremely useful for us to be there because it's a one-stop shop to meet our customers, to meet partners, to meet the industry. So there's both, I would say, value in what we do, but there's also value in the history. When you've been doing the same thing for 20 years and it works, I think it's a good idea to continue doing it. Thank you very much indeed. Thank you very much for having me.