re SGZH: something's brewing alright...
and it ain't good. 8-K just filed...
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
(a) On management’s recommendation and in consultation with Goldman Parks Kurland Mohidin, LLP (“GPKM”), our independent registered public accounting firm, we concluded on September 18, 2009 that the financial statements for the fiscal year ended December 31, 2008, as presented in our Annual Report on Form 10-K, and for each of the periods ended June 30, 2008, September 30, 2008, March 31, 2009 and June 30, 2009, as presented in our Quarterly Reports on Form 10-Q, should no longer be relied upon due to the accounting issues set forth below.
The accounting issues relate to (i) the amortization of mining rights based on salable reserves determined under Industry Guide 7, (ii) the amortization of asset retirement obligation based on salable reserves determined under Industry Guide 7 and (iii) the accounting for the reverse acquisition in April 2008 of Heilongjiang Xing An Group Hong Yuan Coal Mining Co., Ltd. and Heilongjiang Xing An Group Sheng Yu Ming Co., Ltd.
Accordingly, the Company will restate its financial statements for the fiscal year ended December 31, 2008 and for each of the periods ended June 30, 2008, September 30, 2008, March 31, 2009 and June 30, 2009 by disclosing the effect of these accounting issues in an amended Form 10-K for the fiscal year ended December 31, 2008 and in an amended Form 10-Q for each of the three months ended June 30, 2008 and September 30, 2008, March 31, 2009 and June 30, 2009, respectively.
Our Audit Committee and executive officers have discussed the above matters with GPKM.
Always do right. This will gratify some people and astonish the rest.
---Mark Twain
