SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 13, 2007
ASIA TIME CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware | 000-51981 | 20-4062619 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
Room 1601-1604, 16/F., CRE Centre 889 Cheung Sha Wan Road, Kowloon, Hong Kong | N/A |
(Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: | (852)-23100101 |
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On December 13, 2007, the management and Board of Directors of Asia Time Corporation, a Delaware corporation (the “Company”) concluded that the Company’s previously issued financial statements
(i) | as of and for the three months ended March 31, 2007, as included in the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “Commission”) on May 21, 2007, as amended by Amendment No. 1 to the Quarterly Report on Form 10-Q/A filed with the Commission on September 26, 2007 (the “March 31, 2007 Form 10-Q”); |
(ii) | as of and for the three months and six months ended June 30, 2007, as included in the Quarterly Report on Form 10-Q filed with the Commission on August 20, 2007 (the “June 30, 2007 Form 10-Q”); |
(iii) | as of and for the three months and nine months ended September 30, 2007, as included in the Quarterly Report on Form 10-Q filed with the Commission on November 19, 2007 (the “September 30, 2007 Form 10-Q); and |
(iv) | as of and for the years ended December 31, 2006, 2005, and 2004, as included in the Annual Report on Form 10-K filed with the Commission on April 17, 2007, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A filed with the Commission on September 26, 2007 (the “Form 10-K” and collectively with the March 31, 2007 Form 10-Q, June 30, 2007 Form 10-Q, and September 30, 2007 Form 10-Q, the “Reports”) |
should no longer be relied upon as a result of the Company’s determination that it misapplied accounting principles generally accepted in the United States of America in relation the accounting for inventory by adjusting watch movement costing for the effects of vendor incentives from an as received basis to an accrual basis, as the Company was able to estimate the value of the incentives as inventory is purchased (the “Restatement”). The Reports will also be amended restate average shares outstanding and actual shares outstanding to correct the accounting for the reverse merger transaction in January 2007. As a result of these corrections, various income tax calculations were also revised, which effected net income and also caused reclassifications to cash flows.
The Company’s Board of Directors and management conducted a review of the Company’s accounting treatment of the matters relating to the Restatement with assistance from outside financial consultants, and during this process, management reviewed the facts and circumstances and concluded that it misapplied accounting principles generally accepted in the United States of America. As discussed above, the result of the discussions and analysis lead to the conclusion that the Company would need to correct errors with respect to the accounting for inventory by adjusting watch movement costing for the effects of vendor incentives from an as received basis to an accrual basis, as the Company was able to estimate the value of the incentives as inventory is purchased. The Board of Directors and authorized officers of the Company discussed this matter and conclusion with the Company's independent public accounting firm (Dominic K. F. Chan & Co.) and it was concluded that the Company's previously issued financial statements described above could not be relied upon and needed to be restated.
The Company has completed the Restatements with respect to the financial statements as previously issued in the September 30, 2007 Form 10-Q and the Form 10-K. Information regarding the effect of the Restatement for the periods covered by these two reports in presented below. The Company continues to work to complete the Restatement with respect to the March 31, 2007 Form 10-Q and the June 30, 2007 Form 10-Q, which the Company expects to complete prior to December 31, 2007.
Statement of Operations
Nine months ended September 30, 2007 (Unaudited)
2007 | 2007 | 2007 | ||||||||
(As originally reported) | (restated) | (Effect of adjustments) | ||||||||
$ | $ | $ | ||||||||
Net sales | 64,960,224 | 64,960,224 | - | |||||||
Cost of sales | (54,644,056 | ) | (54,829,393 | ) | (185,337 | ) | ||||
Gross profit | 10,316,168 | 10,130,831 | (185,337 | ) | ||||||
Other income | 145,203 | 145,203 | - | |||||||
Depreciation | (193,499 | ) | (193,499 | ) | - | |||||
Administrative and other operating expenses | (1,443,283 | ) | (1,443,283 | ) | - | |||||
Income from operations | 8,824,589 | 8,639,252 | (185,337 | ) | ||||||
Fees and costs related to reverse merger | (736,197 | ) | (736,197 | ) | - | |||||
Other income | 117,936 | 117,936 | - | |||||||
Interest expenses | (830,935 | ) | (830,935 | ) | - | |||||
Income before taxes | 7,375,393 | 7,190,056 | (185,337 | ) | ||||||
Income taxes | (1,512,523 | ) | (1,414,608 | ) | 97,915 | |||||
Net income | 5,862,870 | 5,775,448 | (87,422 | ) | ||||||
Earnings per share of common stock | ||||||||||
- Basic | 0.26 | 0.25 | (0.01 | ) | ||||||
- Diluted | 0.24 | 0.23 | (0.01 | ) | ||||||
Weighted average number of common shares | ||||||||||
- Basic | 22,844,721 | 22,844,721 | - | |||||||
- Diluted | 24,874,262 | 24,874,262 | - |
Statement of Operations
Nine months ended September 30, 2006 (Unaudited)
2006 | 2006 | 2006 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
Net sales | 62,874,395 | 62,874,395 | - | |||||||
Cost of sales | (56,510,946 | ) | (55,599,295 | ) | 911,651 | |||||
Gross profit | 6,363,449 | 7,275,100 | 911,651 | |||||||
Other income | 125,504 | 125,504 | - | |||||||
Depreciation | (243,096 | ) | (243,096 | ) | - | |||||
Administrative and other operating expenses | (971,717 | ) | (971,717 | ) | - | |||||
Income from operations | 5,274,140 | 6,185,791 | 911,651 | |||||||
Fees and costs related to reverse merger | - | - | - | |||||||
Other income | 165,638 | 165,638 | - | |||||||
Interest expenses | (763,726 | ) | (763,726 | ) | - | |||||
Income before taxes | 4,676,052 | 5,587,703 | 911,651 | |||||||
Income taxes | (829,593 | ) | (989,132 | (159,539 | ) | |||||
Net income | 3,846,459 | 4,598,571 | 752,112 | |||||||
Earnings per share of common stock | ||||||||||
- Basic and Diluted | 0.20 | 0.24 | 0.04 | |||||||
Weighted average number of shares of common stock | ||||||||||
- Basic and Diluted | 19,454,420 | 19,454,420 | - |
Statement of Operations
Three months ended September 30, 2007 (Unaudited)
2007 | 2007 | 2007 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
Net sales | 22,972,645 | 22,972,645 | - | |||||||
Cost of sales | (18,099,186 | ) | (18,410,524 | ) | (311,338 | ) | ||||
Gross profit | 4,873,459 | 4,562,121 | (311,338 | ) | ||||||
Other income | 48,425 | 48,425 | - | |||||||
Depreciation | (64,635 | ) | (64,635 | ) | - | |||||
Administrative and other operating expenses | (490,225 | ) | (490,225 | ) | - | |||||
Income from operations | 4,367,024 | 4,055,686 | (311,338 | ) | ||||||
Fees and costs related to reverse merger | - | - | - | |||||||
Other income | 39,555 | 39,555 | - | |||||||
Interest expenses | (316,516 | ) | (316,516 | ) | - | |||||
Income before taxes | 4,090,063 | 3,778,725 | (311,338 | ) | ||||||
Income taxes | (752,221 | ) | (697,737 | ) | 54,484 | |||||
Net income | 3,337,842 | 3,080,988 | (256,854 | ) | ||||||
Earnings per share of common stock | ||||||||||
- Basic | 0.14 | 0.13 | (0.01 | ) | ||||||
- Diluted | 0.13 | 0.12 | (0.01 | ) | ||||||
Weighted average number of common stock | ||||||||||
- Basic | 23,156,629 | 23,156,629 | - | |||||||
- Diluted | 25,406,977 | 25,406,977 | - |
Statement of Operations
Three months ended September 30, 2006 (Unaudited)
2006 | 2006 | 2006 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
Net sales | 19,647,209 | 19,647,209 | - | |||||||
Cost of sales | (16,730,052 | ) | (17,332,702 | ) | (602,650 | ) | ||||
Gross profit | 2,917,157 | 2,314,507 | (602,650 | ) | ||||||
Other income | 41,724 | 41,724 | - | |||||||
Depreciation | (83,730 | ) | (83,730 | ) | - | |||||
Administrative and other operating expenses | (359,472 | ) | (359,472 | ) | - | |||||
Income from operations | 2,515,679 | 1,913,029 | (602,650 | ) | ||||||
Fees and costs related to reverse merger | - | - | - | |||||||
Other income | 55,342 | 55,342 | - | |||||||
Interest expenses | (265,872 | ) | (265,872 | ) | - | |||||
Income before taxes | 2,305,149 | 1,702,499 | (602,650 | ) | ||||||
Income taxes | (410,284 | ) | (304,821 | ) | 105,463 | |||||
Net income | 1,894,865 | 1,397,678 | (497,187 | ) | ||||||
Earnings per share of common stock | ||||||||||
- Basic and diluted | 0.10 | 0.07 | (0.03 | ) | ||||||
Weighted average number of shares of common stock | ||||||||||
- Basic and diluted | 19,454,420 | 19,454,420 | - |
Consolidated Balance Sheet
September 30, 2007 (Unaudited)
2007 | 2007 | 2007 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
ASSETS | ||||||||||
Current Assets: | ||||||||||
Cash and cash equivalents | 166,216 | 166,216 | - | |||||||
Restricted cash | 5,551,704 | 5,551,704 | - | |||||||
Accounts receivable, net | 15,482,635 | 15,482,635 | - | |||||||
Prepaid expenses and other receivables | 6,397,568 | 6,397,568 | - | |||||||
Income tax prepayments | - | - | - | |||||||
Inventories, net | 6,520,527 | 5,961,014 | (559,513 | ) | ||||||
Prepaid lease payments | 17,193 | 17,193 | - | |||||||
Total Current Assets | 34,135,843 | 33,576,330 | (559,513 | ) | ||||||
Deferred tax assets | 19,536 | 19,536 | - | |||||||
Plant and equipment, net | 719,473 | 719,473 | - | |||||||
Leasehold lands | 882,444 | 882,444 | - | |||||||
Held-to-maturity investments | 300,771 | 300,771 | - | |||||||
Intangible assets | 244,168 | 244,168 | - | |||||||
Restricted cash - non current | 256,937 | 256,937 | - | |||||||
TOTAL ASSETS | 36,559,172 | 35,999,659 | (559,513 | ) | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
LIABILITIES | ||||||||||
Current Liabilities: | ||||||||||
Accounts payable | 1,075,980 | 1,075,980 | - | |||||||
Other payables and accrued liabilities | 51,491 | 51,491 | - | |||||||
Advance from a related party | 12,268 | 12,268 | - | |||||||
Income taxes payable | 2,854,788 | 2,691,393 | (163,395 | ) | ||||||
Bank borrowings | 15,196,458 | 15,196,458 | - | |||||||
Total Current Liabilities | 19,190,985 | 19,027,590 | (163,395 | ) | ||||||
Deferred tax liabilities | 37,180 | 37,180 | - | |||||||
TOTAL LIABILITIES | 19,228,165 | 19,064,770 | (163,395 | ) | ||||||
COMMITMENTS AND CONTINGENCIES |
Consolidated Balance Sheet (Cont’d)
September 30, 2007 (Unaudited)
2007 | 2007 | 2007 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||||
Preferred stock | ||||||||||
Par value: US$0.0001 | ||||||||||
Authorized: 10,000,000 shares | ||||||||||
Issued and outstanding: 2007 - 2,250,348 shares | 225 | 225 | - | |||||||
Common stock | ||||||||||
Par value: US$0.0001 | ||||||||||
Authorized: 100,000,000 shares | ||||||||||
Issued and outstanding: 2007 - 23,156,629 shares | 2,316 | 2,316 | - | |||||||
Additional paid-in capital | 3,287,386 | 3,287,386 | - | |||||||
Accumulated other comprehensive income | 22,112 | 22,112 | - | |||||||
Retained earnings | 14,018,968 | 13,622,850 | (396,118 | ) | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 17,331,007 | 16,934,889 | (396,118 | ) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 36,559,172 | 35,999,659 | (559,513 | ) |
Statements of Cash Flows
Nine months ended September 30, 2007 (Unaudited)
2007 | 2007 | 2007 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | Adjustments) | |||||||||
Cash flows from operating activities | ||||||||||
Net income | 5,862,870 | 5,775,448 | (87,422 | ) | ||||||
Adjustments to reconcile net income to net cash flows | ||||||||||
used in operating activities: | ||||||||||
Amortization of intangible assets | 92,884 | 92,884 | - | |||||||
Amortization of leasehold lands | 17,287 | 17,287 | - | |||||||
Depreciation | 193,499 | 193,499 | - | |||||||
Dividend income | - | - | - | |||||||
Loss on disposal of plant and equipment | 5,406 | 5,406 | - | |||||||
Income taxes | 1,512,523 | 1,414,608 | (97,915 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (7,281,110 | ) | (7,281,110 | ) | - | |||||
Prepaid expenses and other receivables | (4,260,214 | ) | (4,260,214 | ) | - | |||||
I Inventories | 90,180 | 275,517 | 185,337 | |||||||
Accounts payable | 306,241 | 306,241 | - | |||||||
Other payables and accrued liabilities | (138,142 | ) | (138,142 | ) | - | |||||
Income taxes payable | (112,601 | ) | (112,601 | ) | - | |||||
Net cash used in operating activities | (3,711,177 | ) | (3,711,177 | ) | - | |||||
Cash flows from investing activities | ||||||||||
Acquisition of plant and equipment | (30,257 | ) | (30,257 | ) | - | |||||
Proceeds from disposal of plant and equipment | 320 | 320 | - | |||||||
Net cash used in investing activities | (29,937 | ) | (29,937 | ) | - | |||||
Cash flows from financing activities | ||||||||||
Proceeds from issuance of Series A convertible preferred stock | 2,641,683 | 2,641,683 | - | |||||||
Proceeds from new short-term bank borrowings | 2,816,620 | 2,816,620 | - | |||||||
Repayment of short-term bank borrowings | (4,029,839 | ) | (4,029,839 | ) | - | |||||
Net advance under short term bank borrowings | 3,175,698 | 3,175,698 | - | |||||||
Increase in restricted cash | (1,031,003 | ) | (1,031,003 | ) | - | |||||
Advances to related parties | (20,773 | ) | (20,773 | ) | - | |||||
Decrease in bank overdrafts | 40,840 | 40,840 | - | |||||||
Dividends paid | - | - | - | |||||||
Net cash flows provided by financing activities | 3,593,226 | 3,593,226 | - | |||||||
Net decrease in cash and cash equivalents | (147,888 | ) | (147,888 | ) | - | |||||
Effect of foreign currency translation on cash and cash equivalents | (2,517 | ) | (2,517 | ) | - | |||||
Cash and cash equivalents - beginning of period | 316,621 | 316,621 | - | |||||||
Cash and cash equivalents - end of period | 166,216 | 166,216 | - |
Statement of Cash Flows
Nine months ended September 30, 2006 (Unaudited)
2006 | 2006 | 2006 | ||||||||
(As originally | (Effect of | |||||||||
reported) | (restated) | adjustments) | ||||||||
$ | $ | $ | ||||||||
Cash flows from operating activities | ||||||||||
Net income | 3,846,459 | 4,598,571 | 752,112 | |||||||
Adjustments to reconcile net income to net cash flows | ||||||||||
provided by operating activities: | ||||||||||
Amortization of intangible assets | 115,965 | 115,965 | - | |||||||
Amortization of leasehold lands | 17,481 | 17,481 | - | |||||||
Depreciation | 243,096 | 243,096 | - | |||||||
Dividend income | (4,486 | ) | (4,486 | ) | - | |||||
Loss on disposal of plant and equipment | 7,725 | 7,725 | - | |||||||
Income taxes | 829,593 | 989,132 | 159,539 | |||||||
Changes in operating assets and liabilities: | ||||||||||
(Increase) in Accounts receivable | (3,264,603 | ) | (3,264,603 | ) | - | |||||
Prepaid expenses and other receivables | (1,118,481 | ) | (1,118,481 | ) | - | |||||
Increase in Inventories | 1,679,040 | 767,389 | (911,651 | ) | ||||||
Accounts payable | (279,202 | ) | (279,202 | ) | - | |||||
Other payables and accrued liabilities | (37,981 | ) | (37,981 | ) | - | |||||
Income taxes payable | (16,055 | ) | (16,055 | ) | - | |||||
Unearned revenue | (1,595,187 | ) | (1,595,187 | ) | - | |||||
Net cash provided by operating activities | 423,364 | 423,364 | - | |||||||
Cash flows from investing activities | ||||||||||
Acquisition of plant and equipment | (1,164,095 | ) | (1,164,095 | ) | - | |||||
Proceeds from disposal of plant and equipment | 2,034 | 2,034 | - | |||||||
Dividend received | 4,486 | 4,486 | - | |||||||
Net cash used in investing activities | (1,157,575 | ) | (1,157,575 | ) | - | |||||
Cash flows from financing activities | ||||||||||
Proceeds from issuance of Series A convertible preferred stock | - | - | - | |||||||
Proceeds from new short-term bank borrowings | 33,932 | 33,932 | - | |||||||
Repayment of short-term bank borrowings | (259,532 | ) | (259,532 | ) | - | |||||
Net advance under short term bank borrowings | 3,925,836 | 3,925,836 | - | |||||||
Increase in restricted cash | (1,180,479 | ) | (1,180,479 | ) | - | |||||
Advances to related parties | (28,798 | ) | (28,798 | ) | - | |||||
Decrease in bank overdrafts | 131,057 | 131,057 | - | |||||||
Dividends paid | (2,445,712 | ) | (2,445,712 | ) | - | |||||
Net cash flows provided by financing activities | 176,304 | 176,304 | - | |||||||
Net decrease in cash and cash equivalents | (557,907 | ) | (557,907 | ) | - | |||||
Effect of foreign currency translation on cash and cash equivalents | (538 | ) | (538 | ) | - | |||||
Cash and cash equivalents - beginning of period | 778,563 | 778,563 | - | |||||||
Cash and cash equivalents - end of period | 220,118 | 220,118 | - |
Statement of Operations
Year ended December 31, 2006
2006 | 2006 | 2006 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Net sales | $ | 81,134,275 | $ | 81,134,275 | $ | - | ||||
Cost of sales | (71,393,755 | ) | (71,496,801 | ) | (103,046 | ) | ||||
Gross profit | 9,740,520 | 9,637,474 | (103,046 | ) | ||||||
Other income | 424,016 | 424,016 | - | |||||||
Depreciation | (325,995 | ) | (325,995 | ) | - | |||||
Administrative and other operating expenses | (1,284,863 | ) | (1,284,863 | ) | - | |||||
Income from operations | 8,553,678 | 8,450,632 | (103,046 | ) | ||||||
Other income | 237,571 | 237,571 | - | |||||||
Interest expenses | (1,060,536 | ) | (1,060,536 | ) | - | |||||
Income before taxes | 7,730,713 | 7,627,667 | (103,046 | ) | ||||||
Income taxes | (1,325,761 | ) | (1,307,728 | ) | 18,033 | |||||
Net income | 6,404,952 | 6,319,939 | (85,013 | ) | ||||||
Earnings per share of common stock | ||||||||||
- Basic and diluted | 0.28 | 0.32 | 0.04 | |||||||
Weighted average number of shares of common stock | ||||||||||
- Basic and diluted | 23,156,629 | 19,454,420 | (3,702,209 | ) |
Statement of Operations
Year ended December 31, 2005
2005 | 2005 | 2005 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Net sales | $ | 63,078,409 | $ | 63,078,409 | $ | - | ||||
Cost of sales | (56,813,199 | ) | (57,026,036 | ) | (212,837 | ) | ||||
Gross profit | 6,265,210 | 6,052,373 | (212,837 | ) | ||||||
Other income | 938,573 | 938,573 | - | |||||||
Depreciation | (259,127 | ) | (259,127 | ) | - | |||||
Administrative and other operating expenses | (1,436,069 | ) | (1,436,069 | ) | - | |||||
Income from operations | 5,508,587 | 5,295,750 | (212,837 | ) | ||||||
Other income | 156,199 | 156,199 | - | |||||||
Interest expenses | (514,637 | ) | (514,637 | ) | - | |||||
Income before taxes | 5,150,149 | 4,937,312 | (212,837 | ) | ||||||
Income taxes | (948,933 | ) | (911,687 | ) | 37,246 | |||||
Net income | 4,201,216 | 4,025,625 | (175,591 | ) | ||||||
Earnings per share of common stock | ||||||||||
- Basic and diluted | 0.18 | 0.21 | 0.03 | |||||||
Weighted average number of shares of common stock | ||||||||||
- Basic and diluted | 23,156,629 | 19,454,420 | (3,702,209 | ) |
Statement of Operations
Year ended December 31, 2004
2004 | 2004 | 2004 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Net sales | $ | 36,553,084 | $ | 36,553,084 | $ | - | ||||
Cost of sales | (34,584,844 | ) | (34,608,653 | ) | (23,809 | ) | ||||
Gross profit | 1,968,240 | 1,944,431 | (23,809 | ) | ||||||
Other income | - | - | - | |||||||
Depreciation | (126,225 | ) | (126,225 | ) | - | |||||
Administrative and other operating expenses | (1,344,786 | ) | (1,344,786 | ) | - | |||||
Income from operations | 497,229 | 473,420 | (23,809 | ) | ||||||
Other income | 28,047 | 28,047 | - | |||||||
Interest expenses | (164,558 | ) | (164,558 | ) | - | |||||
Income before taxes | 360,718 | 336,909 | (23,809 | ) | ||||||
Income taxes | (136,117 | ) | (131,951 | ) | 4,166 | |||||
Net income | 224,601 | 204,958 | (19,643 | ) | ||||||
Earnings per share of common stock | ||||||||||
- Basic and diluted | 0.01 | 0.01 | - | |||||||
Weighted average number of shares of common stock | ||||||||||
- Basic and diluted | 23,156,629 | 19,454,420 | (3,702,209 | ) |
Consolidated Balance Sheet
December 31, 2006
2006 | 2006 | 2006 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
ASSETS | ||||||||||
Current Assets: | ||||||||||
Cash and cash equivalents | 316,621 | 316,621 | - | |||||||
Restricted cash | 4,523,679 | 4,523,679 | - | |||||||
Accounts receivable | 8,188,985 | 8,188,985 | - | |||||||
Prepaid expenses and other receivables | 2,101,133 | 2,101,133 | - | |||||||
Tax prepayment | 767 | 767 | - | |||||||
Inventories, net | 6,620,361 | 6,246,185 | (374,176 | ) | ||||||
Prepaid lease payments | 22,958 | 22,958 | - | |||||||
Total Current Assets | 21,774,504 | 21,400,328 | (374,176 | ) | ||||||
Deferred tax assets | 14,042 | 14,042 | - | |||||||
Plant and equipment, net | 890,258 | 890,258 | - | |||||||
Leasehold lands | 895,322 | 895,322 | - | |||||||
Held-to-maturity investments | 301,196 | 301,196 | - | |||||||
Intangible assets | 337,836 | 337,836 | - | |||||||
Restricted cash | 257,301 | 257,301 | - | |||||||
TOTAL ASSETS | 24,470,459 | 24,096,283 | (374,176 | ) | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
LIABILITIES | ||||||||||
Current Liabilities: | ||||||||||
Accounts payable | 770,360 | 770,360 | - | |||||||
Other payables and accrued liabilities | 190,358 | 190,358 | - | |||||||
Advance from a related party | - | - | - | |||||||
Income taxes payable | 1,453,051 | 1,387,571 | (65,480 | ) | ||||||
Unearned revenue | - | - | - | |||||||
Bank borrowings | 13,205,167 | 13,205,167 | - | |||||||
Total Current Liabilities | 15,618,936 | 15,553,456 | (65,480 | ) | ||||||
Deferred tax liabilities | 31,711 | 31,711 | - | |||||||
TOTAL LIABILITIES | 15,650,647 | 15,585,167 | (65,480 | ) | ||||||
COMMITMENTS AND CONTINGENCIES |
Consolidated Balance Sheet (Cont’d)
December 31, 2006
2006 | 2006 | 2006 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||||
Preferred stock | ||||||||||
Par value: 2006 - US$0.0001 | ||||||||||
Authorized: 2006 - 10,000,000 shares | ||||||||||
Issued and outstanding: 2006 - none issued | - | - | - | |||||||
Common stock | ||||||||||
Par value: 2006 - US$0.0001 | ||||||||||
Authorized: 2006 - 100,000,000 shares | ||||||||||
Issued and outstanding: 2006 - 19,454,420 shares | 2,316 | 1,946 | (370 | ) | ||||||
Additional paid-in capital | 653,928 | 654,298 | 370 | |||||||
Accumulated other comprehensive income | 7,470 | 7,470 | - | |||||||
Retained earnings | 8,156,098 | 7,847,402 | (308,696 | ) | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 8,819,812 | 8,511,116 | (308,696 | ) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 24,470,459 | 24,096,283 | (374,176 | ) |
Consolidated Balance Sheet
December 31, 2005
2005 | 2005 | 2005 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
ASSETS | ||||||||||
Current Assets: | ||||||||||
Cash and cash equivalents | 780,090 | 780,090 | - | |||||||
Restricted cash | 4,306,474 | 4,306,474 | - | |||||||
Accounts receivable | 4,829,586 | 4,829,586 | - | |||||||
Prepaid expenses and other receivables | 394,236 | 394,236 | - | |||||||
Tax prepayment | 16,367 | 16,367 | - | |||||||
Inventories, net | 6,584,792 | 6,313,662 | (271,130 | ) | ||||||
Prepaid lease payments | 7,993 | 7,993 | - | |||||||
Total Current Assets | 16,919,538 | 16,648,408 | (271,130 | ) | ||||||
Deferred tax assets | - | - | - | |||||||
Plant and equipment, net | 682,901 | 682,901 | - | |||||||
Leasehold lands | 315,939 | 315,939 | - | |||||||
Held-to-maturity investments | 301,954 | 301,954 | - | |||||||
Intangible assets | 584,149 | 584,149 | - | |||||||
Restricted cash | - | - | - | |||||||
TOTAL ASSETS | 18,804,481 | 18,533,351 | (271,130 | ) | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
LIABILITIES | ||||||||||
Current Liabilities: | ||||||||||
Accounts payable | 1,236,418 | 1,236,418 | - | |||||||
Other payables and accrued liabilities | 145,249 | 145,249 | - | |||||||
Advance from a related party | 28,854 | 28,854 | - | |||||||
Income taxes payable | 864,205 | 816,758 | (47,447 | ) | ||||||
Unearned revenue | 1,598,314 | 1,598,314 | - | |||||||
Bank borrowings | 10,064,129 | 10,064,129 | - | |||||||
Total Current Liabilities | 13,937,169 | 13,889,722 | (47,447 | ) | ||||||
Deferred tax liabilities | - | - | - | |||||||
TOTAL LIABILITIES | 13,937,169 | 13,889,722 | (47,447 | ) | ||||||
COMMITMENTS AND CONTINGENCIES |
Consolidated Balance Sheet (Cont’d)
December 31, 2005
2005 | 2005 | 2005 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||||
Preferred stock | ||||||||||
Par value: 2005 - none | ||||||||||
Authorized: 2005 - none | ||||||||||
Issued and outstanding: 2005 - none issued | - | - | - | |||||||
Common stock | ||||||||||
Par value: 2005 - US$0.0001 | ||||||||||
Authorized: 2005 - 100,000,000 shares | ||||||||||
Issued and outstanding: 2005 - 19,454,420 shares | 2,316 | 1,946 | (370 | ) | ||||||
Additional paid-in capital | 653,928 | 654,298 | 370 | |||||||
Accumulated other comprehensive income | 13,549 | 13,549 | - | |||||||
Retained earnings | 4,197,519 | 3,973,836 | (223,683 | ) | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 4,867,312 | 4,643,629 | (223,683 | ) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 18,804,481 | 18,533,351 | (271,130 | ) |
Consolidated Balance Sheet
December 31, 2004
2004 | 2004 | 2004 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
ASSETS | ||||||||||
Current Assets: | ||||||||||
Cash and cash equivalents | 911,487 | 911,487 | - | |||||||
Restricted cash | 3,551,304 | 3,551,304 | - | |||||||
Accounts receivable | 3,369,326 | 3,369,326 | - | |||||||
Prepaid expenses and other receivables | 727,934 | 727,934 | - | |||||||
Tax prepayment | - | - | - | |||||||
Inventories, net | 3,931,124 | 3,872,831 | (58,293 | ) | ||||||
Prepaid lease payments | - | - | - | |||||||
Total Current Assets | 12,491,175 | 12,432,882 | (58,293 | ) | ||||||
Deferred tax assets | - | - | - | |||||||
Plant and equipment, net | 696,552 | 696,552 | - | |||||||
Leasehold lands | - | - | - | |||||||
Held-to-maturity investments | - | - | - | |||||||
Intangible assets | 736,934 | 736,934 | - | |||||||
Restricted cash | - | - | - | |||||||
TOTAL ASSETS | 13,924,661 | 13,866,368 | (58,293 | ) | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
LIABILITIES | ||||||||||
Current Liabilities: | ||||||||||
Accounts payable | 1,805,995 | 1,805,995 | - | |||||||
Other payables and accrued liabilities | 41,798 | 41,798 | - | |||||||
Advance from a related party | 89,296 | 89,296 | - | |||||||
Income taxes payable | 95,640 | 85,439 | (10,201 | ) | ||||||
Unearned revenue | 3,197,160 | 3,197,160 | - | |||||||
Bank borrowings | 7,400,775 | 7,400,775 | - | |||||||
Total Current Liabilities | 12,630,664 | 12,620,463 | (10,201 | ) | ||||||
Deferred tax liabilities | - | - | - | |||||||
TOTAL LIABILITIES | 12,630,664 | 12,620,463 | (10,201 | ) | ||||||
COMMITMENTS AND CONTINGENCIES |
Consolidated Balance Sheet (Cont’d)
December 31, 2004
2004 | 2004 | 2004 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
$ | $ | $ | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||||
Preferred stock | ||||||||||
Par value: 2004 - none | ||||||||||
Authorized: 2004 - none | ||||||||||
Issued and outstanding: 2004 - none issued | - | - | - | |||||||
Common stock | ||||||||||
Par value: 2004 - US$0.0001 | ||||||||||
Authorized: 2004 - 100,000,000 shares | ||||||||||
Issued and outstanding: 2004 - 19,454,420 shares | 2,316 | 1,946 | (370 | ) | ||||||
Additional paid-in capital | 652,118 | 652,488 | 370 | |||||||
Accumulated other comprehensive income | 412 | 412 | - | |||||||
Retained earnings | 639,151 | 591,059 | (48,092 | ) | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 1,293,997 | 1,245,905 | (48,092 | ) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 13,924,661 | 13,866,368 | (58,293 | ) |
Statement of Cash Flows
Year ended December 31, 2006
2006 | 2006 | 2006 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Cash flows from operating activities | ||||||||||
Net income | $ | 6,404,952 | $ | 6,319,939 | (85,013 | ) | ||||
Adjustments to reconcile net income to net cash | �� | |||||||||
provided by operating activities: | ||||||||||
Amortization of intangible assets | 154,436 | 154,436 | - | |||||||
Amortization of leasehold lands | 23,247 | 23,247 | - | |||||||
Depreciation | 325,995 | 325,995 | - | |||||||
Loss on disposal of plant and equipment | 7,715 | 7,715 | - | |||||||
Gain on disposal of intangible assets | (210,594 | ) | (210,594 | ) | - | |||||
Income taxes | 1,325,761 | 1,307,728 | (18,033 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (3,369,347 | ) | (3,369,347 | ) | - | |||||
Prepaid expenses and other receivables | (1,706,789 | ) | (1,706,789 | ) | - | |||||
Inventories | (52,056 | ) | 50,990 | 103,046 | ||||||
Accounts payable | (462,658 | ) | (462,658 | ) | - | |||||
Other payables and accrued liabilities | 45,445 | 45,445 | - | |||||||
Income taxes payable | (701,921 | ) | (701,921 | ) | - | |||||
Unearned revenue | (1,593,280 | ) | (1,593,280 | ) | - | |||||
Net cash flows provided by operating activities | 190,906 | 190,906 | - | |||||||
Cash flows from investing activities | ||||||||||
Acquisition of leasehold lands | (618,025 | ) | (618,025 | ) | - | |||||
Acquisition of plant and equipment | (544,678 | ) | (544,678 | ) | - | |||||
Proceeds from disposal of plant and equipment | 2,031 | 2,031 | - | |||||||
Proceeds from disposal of intangible assets | 300,849 | 300,849 | - | |||||||
Net cash flows used in investing activities | (859,823 | ) | (859,823 | ) | - | |||||
Cash flows from financing activities | ||||||||||
Proceeds from new short-term bank loans | 1,700,622 | 1,700,622 | - | |||||||
Repayment of short-term bank loans | (525,535 | ) | (525,535 | ) | - | |||||
Repayment of a capital lease | - | - | - | |||||||
Net advancement of other bank borrowings | 1,789,269 | 1,789,269 | - | |||||||
Increase in restricted cash | (484,997 | ) | (484,997 | ) | - | |||||
Increase in bank overdrafts | 199,893 | 199,893 | - | |||||||
Advance from a related party | (28,763 | ) | (28,763 | ) | - | |||||
Dividends paid | (2,446,373 | ) | (2,446,373 | ) | - | |||||
Net cash flows provided by financing activities | 204,116 | 204,116 | - | |||||||
Net decrease in cash and cash equivalents | (464,801 | ) | (464,801 | ) | - | |||||
Effect of foreign currency translation on cash and cash equivalents | 1,332 | 1,332 | - | |||||||
Cash and cash equivalents - beginning of year | 780,090 | 780,090 | - | |||||||
Cash and cash equivalents - end of year | 316,621 | 316,621 | - |
Statement of Cash Flows
Year ended December 31, 2005
2005 | 2005 | 2005 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Cash flows from operating activities | ||||||||||
Net income | $ | 4,201,216 | 4,025,625 | (175,591 | ) | |||||
Adjustments to reconcile net income to net cash | ||||||||||
used in operating activities: | ||||||||||
Amortization of intangible assets | 154,438 | 154,438 | - | |||||||
Amortization of leasehold lands | 7,968 | 7,968 | - | |||||||
Depreciation | 259,127 | 259,127 | - | |||||||
Loss on disposal of plant and equipment | - | - | - | |||||||
Gain on disposal of intangible assets | - | - | - | |||||||
Income taxes | 948,933 | 911,687 | (37,246 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (1,445,937 | ) | (1,445,937 | ) | - | |||||
Prepaid expenses and other receivables | 334,759 | 334,759 | - | |||||||
Inventories | (2,633,977 | ) | (2,421,140 | ) | 212,837 | |||||
Accounts payable | (573,017 | ) | (573,017 | ) | - | |||||
Other payables and accrued liabilities | 103,007 | 103,007 | - | |||||||
Income taxes payable | (199,079 | ) | (199,079 | ) | - | |||||
Unearned revenue | (1,603,082 | ) | (1,603,082 | ) | - | |||||
Net cash flows used in operating activities | (445,644 | ) | (445,644 | ) | - | |||||
Cash flows from investing activities | ||||||||||
Acquisition of leasehold lands | (330,884 | ) | (330,884 | ) | - | |||||
Acquisition of held-to-maturity investments | (301,007 | ) | (301,007 | ) | - | |||||
Acquisition of intangible assets | - | - | - | |||||||
Acquisition of plant and equipment | (243,504 | ) | (243,504 | ) | - | |||||
Proceeds from disposal of plant and equipment | - | - | - | |||||||
Proceeds from disposal of intangible assets | - | - | - | |||||||
Net cash flows used in investing activities | (875,395 | ) | (875,395 | ) | - |
Statement of Cash Flows
Year ended December 31, 2005
2005 | 2005 | 2005 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Cash flows from financing activities | ||||||||||
Proceeds from new short-term bank loans | 346,622 | 346,622 | - | |||||||
Repayment of short-term bank loans | (408,211 | ) | (408,211 | ) | - | |||||
Repayment of a capital lease | - | - | - | |||||||
Net advancement of other bank borrowings | 2,946,182 | 2,946,182 | - | |||||||
Increase in restricted cash | (755,170 | ) | (755,170 | ) | - | |||||
Increase in bank overdrafts | (250,997 | ) | (250,997 | ) | - | |||||
Advance from a related party | (60,511 | ) | (60,511 | ) | - | |||||
Dividends paid | (642,848 | ) | (642,848 | ) | - | |||||
Net cash flows provided by financing activities | 1,175,067 | 1,175,067 | - | |||||||
Net decrease in cash and cash equivalents | (145,972 | ) | (145,972 | ) | - | |||||
Effect of foreign currency translation on cash and cash equivalents | 14,575 | 14,575 | - | |||||||
Cash and cash equivalents - beginning of year | 911,487 | 911,487 | - | |||||||
Cash and cash equivalents - end of year | 780,090 | 780,090 | - |
Statement of Cash Flows
Year ended December 31, 2004
2004 | 2004 | 2004 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Cash flows from operating activities | ||||||||||
Net income | $ | 224,601 | 204,958 | (19,643 | ) | |||||
Adjustments to reconcile net income to net cash | ||||||||||
used in operating activities: | ||||||||||
Amortization of intangible assets | 35,382 | 35,382 | - | |||||||
Amortization of leasehold lands | - | - | - | |||||||
Depreciation | 126,225 | 126,225 | - | |||||||
Loss on disposal of plant and equipment | - | - | - | |||||||
Gain on disposal of intangible assets | - | - | - | |||||||
Income taxes | 136,117 | 131,951 | (4,166 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (1,997,310 | ) | (1,997,310 | ) | - | |||||
Prepaid expenses and other receivables | 310 | 310 | - | |||||||
Inventories | (2,601,377 | ) | (2,577,568 | ) | 23,809 | |||||
Accounts payable | 538,433 | 538,433 | - | |||||||
Other payables and accrued liabilities | 370 | 370 | - | |||||||
Income taxes payable | (76,747 | ) | (76,747 | ) | - | |||||
Unearned revenue | 3,191,721 | 3,191,721 | - | |||||||
Net cash flows used in operating activities | (422,275 | ) | (422,275 | ) | - | |||||
Cash flows from investing activities | ||||||||||
Acquisition of leasehold lands | - | - | - | |||||||
Acquisition of held-to-maturity investments | - | - | - | |||||||
Acquisition of intangible assets | (771,063 | ) | (771,063 | ) | - | |||||
Acquisition of plant and equipment | (781,095 | ) | (781,095 | ) | - | |||||
Proceeds from disposal of plant and equipment | - | - | - | |||||||
Proceeds from disposal of intangible assets | - | - | - | |||||||
Net cash flows used in investing activities | (1,552,158 | ) | (1,552,158 | ) | - | |||||
Cash flows from financing activities | ||||||||||
Proceeds from new short-term bank loans | 140,937 | 140,937 | - | |||||||
Repayment of short-term bank loans | (11,527 | ) | (11,527 | ) | - | |||||
Repayment of a capital lease | (6,975 | ) | (6,975 | ) | - | |||||
Net advancement of other bank borrowings | 4,176,477 | 4,176,477 | - | |||||||
Increase in restricted cash | (2,255,598 | ) | (2,255,598 | ) | - | |||||
Decrease in bank overdrafts | 599,814 | 599,814 | - | |||||||
Advance from a related party | 122,571 | 122,571 | - | |||||||
Dividends paid | - | - | - | |||||||
Net cash flows provided by financing activities | 2,765,699 | 2,765,699 | - |
Statement of Cash Flows
Year ended December 31, 2004 (Con’t)
2004 | 2004 | 2004 | ||||||||
(As originally | (restated) | (Effect of | ||||||||
reported) | adjustments) | |||||||||
Net increase in cash and cash equivalents | $ | 791,266 | $ | 791,266 | $ | - | ||||
Effect of foreign currency translation on cash and cash equivalents | 7,242 | 7,242 | - | |||||||
Cash and cash equivalents - beginning of year | 112,979 | 112,979 | - | |||||||
Cash and cash equivalents - end of year | 911,487 | 911,487 | - |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 19, 2007 | ASIA TIME CORPORATION | ||
By: | /s/ Kwong Kai Shun | ||
Name | Kwong Kai Shun | ||
Title: | Chief Executive Officer, Chief Financial Officer and Chairman of the Board | ||