Replies to post #6033 on Asia Global Holdings Corp. (fka AAGH)

[dalmore]

Thank you, a very thorough, thought out post



(Readers, they will also have the credit for the print factory deposit in next quarter, ref his previous post)

Posted by: rjc2827
In reply to: None
Date:11/20/2006 3:06:31 PM
Post #of 6034

Just as we saw a one time write down for the share distribution for Q3, there will be a one time write up (if there is such a term) for the return of deposit of $435,897 on the printing factory in the next Quarter.

From today’s 10-Q:

"Capital commitment. The Company’s subsidiary operating in Hong Kong committed to purchasing a printing factory, Tung Sing Printing Factory, in China with a purchase contract price of $641,026. The purchase was expected to be completed on November 15, 2006. A deposit of $435,897 was paid as of September 30, 2006 with a balance of $205,129 is due on completion no later than November 15, 2006. Certain obligations that were to be fulfilled by the seller before November 15, 2006 for the purchase of the printing factory to be complete were unfulfilled as of the November 15, 2006 deadline. We had previously issued notice to the selling company indicating that if all obligations were not met by November 15, 2006 that we demand a refund of the deposit and cancel the transaction. Given that the obligations were not met, the purchase of the printing factory has now been cancelled and the refund of the deposit has been demanded. We expect to receive a refund of the entire deposit amount of $435,897 within the final quarter of this year therefore."

rjc

[rjc2827]

So what does a one-time non-cash expense look like?

The chart below assumes that the growth in revenue, gross profit, and income seen recently will continue at the same rate into Q4. If you don’t like that assumption, feel free to use your own, as that’s not really what I’m dealing with here. This chart is meant to show the real role of the one-time non-cash transaction which was charged against the Q3 2006 Administrative Expenses.



As we learned from the Q3 10-Q, there was an assignment of shares, or share options, to cover both past and future obligations for management services, business advisory, and legal and professional services rendered. This share allocation was valued at $1,819,250 in accordance with the required calculation as detailed in the Sarbanes-Oxley Act of 2002, and was assigned in its entirety to Q3 because that is when the commitment was made.

For more detail on Revenue, Gross Profit, and Net Income: see my earlier post 6033 at http://www.investorshub.com/boards/read_msg.asp?message_id=14968621

rjc