oh sh****** i am out of this!!
Form 8-K for ASIA GLOBAL HOLDINGS CORP.
14-Apr-2009
Non-Reliance on Previous Financials, Audits or Interim Review
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On April 14, 2009, the management and Board of Directors of Asia Global Holding Corporation (the "Company") concluded that the Company's previously issued financial statements as of and for the three months and nine months ended September 30, 2008, as included in the Quarterly Report on Form 10-Q filed with the Commission on November 19, 2008 (the "September 30, 2008 Form 10-Q") should no longer be relied upon because of errors in such financial statements. As a result of these errors, the Company will restate the financial statements described above to correct its accounting for revenue recognition ("the Restatements").
During the first three quarters of the year the Company saw a very strong growth in Media and Advertising sales from our Sino Trade subsidiary. However near the end of 2008 and beginning of 2009 Sino Trade began feeling the effects of the global financial turndown. Sino Trade focuses exclusively on selling business-to-business advertising to small manufactures in China. The financial meltdown during the fourth quarter of 2008 harshly impacted Sino Trade's core client base of small and medium sized manufacturers located in China who engage in manufacturing and exporting products to the United States. This segment of manufacturers in China simultaneously experienced severe cut-backs on bank facilities and a severe drop in export demand. The segment saw numerous factory closings and cutbacks at the end of year 2008, particularly in Southern China - the location of much of Sino Trade's key client base. The adverse financial effect on the core customer group was far worse than Sino Trade originally anticipated. The full effect was not fully realized until the first quarter of 2009 when it became more apparent to Sino Trade management that many of its customers may not recover from the recent global financial crisis soon if at all. As a result, this adverse impact on the Sino Trade core customer base cast doubt on a considerable portion of sales the Company recorded in the three-month period ended September 30, 2008 as management cannot be certain of when or what portion of Sino Trade's account receivables can be fully collected.
The Company anticipates that the Restatements would reduce net sales and reduce gross profit and would also affect net income and net loss for the period presented. The Company also expects filing amendments to its Forms 10-Q for the affected quarterly period to reflect the corrections to its quarterly consolidated financial statements in the near future. The Company's annual report on Form 10-K for fiscal 2008 will reflect these adjustments and contain additional information regarding this matter.
