on 2008-10-23 at $10.00 (-100.00% since Uplisting)
BDO informed the Company that its resignation is based on (i) its determination that certain irregularities likely constitute illegal acts that could have a material effect on the financial statements of the Company for the purposes of Section 10A of the Securities Exchange Act of 1934, as amended; and (ii) its conclusion that the Company's Board of Directors and Audit Committee have not taken timely and appropriate remedial actions in respect of the alleged illegal acts. The Resignation Letter further states that, as a result of such failure to take appropriate remedial actions, it is impossible for BDO to gather evidence to assess whether the Company's accounting records have been falsified and whether there are other issues that could have a material effect on the financial statements of the Company.
The irregularities identified by BDO in the June 10 Letter consisted of the following: In a Company sales contract, the purchaser's chop (i.e., the official signature or seal) affixed on the signature page of the sales contract belongs to a different company than the one named in the sales contract. In connection with BDO's review of the Company's bank account through the Company's e-banking system using the Company's computer, BDO was directed by the Company to access a suspected fake website for the bank. A bank advice dated March 21, 2011 documenting a portion of the Company's interest income contained mathematical errors that the Company's management dismissed as clerical mistakes made by the bank; the Company later replaced it with a "corrected" advice from the bank; and the aforementioned bank advice dated March 21, 2011 used a deposit interest rate to calculate the interest income earned by the Company, which differed from the interest rate announced by the People's Bank of China for the relevant deposit period as referred to in an undated deposit agreement that was presented to BDO to corroborate the Company's interest income.
On June 10, 2011, the Company's auditor, BDO Limited, notified the Company and the Company's Audit Committee that it had identified certain serious issues as part of its ongoing audit work and would need the Company to take certain actions and provide additional information. The Company's Audit Committee is investigating the issues raised in BDO's June 10 letter, as well as other matters. The Company has been discussing these issues with BDO and is working to take all of the actions and to provide the requested information to BDO as promptly as reasonably practicable. The Company cannot predict at this time when it will be in a position to take all of the actions and provide all of the information requested by BDO. The Company intends to file the Form 10-K as soon as reasonably practicable.
Until the review of the issues identified with respect to the pending audit of the Company's financial statements is completed, the Company is unable to determine whether the earnings statements to be included in the Form 10-K will reflect any significant change in the Company's results of operations from the corresponding period for the last fiscal year.
Our current stock price does not reflect our long-term value and premium product quality in a large addressable market capable of sustaining rapid growth. Management will continue to focus on optimizing business operations and market expansion. We remain confident that, in the long run, our strategic position and ability to create value will be recognized by the US investment community.