E-Waste Systems Inc. (fka EWSI)

[melly270]

Item No. 1: The company prepared and made the filing and was advised by the auditor that the consolidated financial statements should be amended immediately prior to the filing of the Form 8-K. The changes in the consolidated financial statements resulted from some information provided by certain operations in China that led to corrections to the statements. The auditors requested the amendment and it was supplied as per their request.

Item No. 1. For the second quarter, after the initial filing the company made two changes to the consolidated financial statements based upon the review by the auditors to wit: One investment had been booked at the a lower valuation based upon the first half of a transaction and the company had not restated the valuation to the proper face value of an investment in preferred stock upon receipt of the actual certificate. That change resulted in an approximate $700k increase to the balance sheet. In addition, based upon documentation review by the auditor, agreements by the Company for lease and operating relationships with business in China had been booked by the company as a VIE and both parties agreed that the consolidated financial statements should be changed to eliminate the consolidation based upon the auditors determination. This change affected revenues and expenses.