Jade Art Group Inc (JADA)

[gpg]

I sold all my JADA this morning. Took a small loss. It may very well go higher and I suspect it probably will but I had some concerns after analyzing the 10Q a little further last night. If you look at Note 4, for some reason the gross amount being amortized of the Exclusive Jade Distribution Rights increased by ~$3.3M in the 2nd quarter. This number should not change. This represents the amount they are amortizing related to the purchase of the distribution rights. Why would it increase by $3.3M in the second quarter - makes absolutely no sense. In addition if you look at the cash flow statement, something is off there as well. Compare 3/31 cash balance to the 6/30 cash balance - there is very little change even though there should have been an increase of at least $3 million dollars (when you consider 2nd quarter earnings and add back the non-cash amortization that took place during the quarter). It appears that over $3M that should have increased the cash balance is not there, but for some reason the distribution rights amount has increased by that amount. It looks very strange to me and until there is a little more clarity on this point, I'll take my loss and move on.