China Advanced Construction Materials (CADC) 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

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): January 14, 2009

CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.

(Exact name of registrant as specified in Charter)

Delaware	333-141568	20-8468508
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employee Identification No.)

Yingu Plaza, 9 Beisihuanxi Road, Suite 1708 

Haidian District, Beijing 100080 PRC 

(Address of Principal Executive Offices)

+86 10 82525301 

(Issuer Telephone number)

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 (see General Instruction A.2. below):

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.

In a comment letter on our Form S-1 registration statement, the Staff of the Securities and Exchange Commission indicated that our redeemable preferred stock should not be classified as a liability. On December 22, we advised our independent accountants, Moore Stephens Wurth Frazer and Torbet, LLP of such comment.  After discussion with us, our independent accountants concurred with us that our previously-issued financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2008 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 should be re-stated to account for the redeemable preferred stock as an equity instrument and not as a liability. The table below reflects the reclassification of the redeemable preferred stock as an equity instrument.

	Year		Three Months
	Ended		Ended
	June 30, 2008		September 30, 2008
Net income and net income available	$	4,945,770	$	1,074,430
to common shareholders, as previously reported
Amortization of deferred offering costs		185,027		75,313
Dividends and accretion on preferred stock		33,387		309,096
Net income, as restated		5,164,184		1,458,839
Dividends and accretion on preferred stock		33,387		309,096
Net income available to common		5,130,797		1,149,743
shareholders, as restated
Earnings per share – basic, as previously reported		0.55		0.10
Earnings per share – basic, as restated		0.57		0.11
Earnings per share – diluted, as previously reported		0.35		0.10
Earnings per share – diluted, as restated		0.56		0.10
Balance Sheet data:	June 30, 2008		September 30, 2008
Deferred financing costs, as previously reported	$	586,818	$	511,506
Deferred financing costs, as restated		-		-
Total assets, as previously reported		38,305,082		41,684,749
Total assets, as restated		37,718,264		41,173,243
Shareholders’ equity, as previously reported		19,390,416		20,517,700
Shareholders’ equity, as restated		18,803,598		20,006,195
Total liabilities and shareholders’ equity,		38,305,082		41,684,749
as previously reported
Total liabilities, redeemable preferred stock	$	37,718,264	$	41,173,243
and shareholders’ equity, as restated

We previously accounted for the redeemable preferred stock as a liability, based on its substantive terms.  However, because the preferred stock does not meet the definition of a liability under paragraph A9 of FAS 150, we have modified the accounting for the preferred stock to account for it as an equity instrument.  In accordance with ASR 268, Regulation S-X 5.02-28 and EITF Topic D-98, the preferred stock will be classified outside of permanent equity.  Dividends paid on the preferred stock, and accretion of the preferred stock to its redemption value, will be charged to retained earnings.  Such amounts will be separately disclosed on the face of the income statement, in order to determine net income available to common shareholders.

Because we had classified the preferred stock as a liability, the associated issuance costs were deferred and were being amortized to income over the period to redemption of the preferred stock.  As a result of accounting for the preferred stock as an equity instrument, the costs incurred will be immediately charged to additional paid-in capital as of June 11, 2008, the date the redeemable preferred stock was issued and the amortization previously recognized in the income statement will be removed.  The calculation of basic and diluted earnings per share will be modified accordingly.

Because we are restating our financial statements in the Form 10-Q and Form 10-K to re-classify the redeemable preferred stock, we are filing this Form 8-K disclosing that our  financial statements set forth in the Form 10-Q for the quarter ended September 30, 2008 and in the Form 10-K for the year ended June 30, 2008 should no longer be relied upon, and that the financial statements presented in the Form 10-Q/A and the Form 10-K/A that we plan to file as of the date of this report, supersede such prior financial statements.

Our executive officers discussed with our independent accountants the matters disclosed in this Item 4.02 of Form 8-K and we have provided a copy of this disclosure to our independent accountants.  Our independent accountants have furnished us with a letter addressed to the Commission stating that they agree with the statements made by us in this Item 4.02.  A copy of this letter is attached as an exhibit to this Form 8-K.

Item 9.01 Financial Statement and Exhibits.

(b)	Exhibits
	Exhibit 7.1 - Letter dated January 20, 2009 from Moore Stephens Wurth Frazer and Torbet, LLP

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.

	CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC.
Date: January 20, 2009	By:	/s/ Xianfu Han
		Xianfu Han
		Chief Executive Officer