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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Asia Time Corp | AMEX:TYM | AMEX | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.00 | - |
Delaware
(State
or other jurisdiction of incorporation
or
organization)
|
|
20-4062619
(I.R.S.
Employer Identification
No.)
|
|
|
|
Room
1601-1604, 16/F., CRE Centre
889
Cheung Sha Wan Road,
Kowloon,
Hong Kong
(Address
of principal executive offices)
|
|
N/A
(Zip
Code)
|
|
Page
|
|
PART
I - FINANCIAL INFORMATION
|
1
|
|
|
|
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
1
|
|
|
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
2
|
|
||
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
4
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
5
|
|
|
|
|
Notes
to Condensed Consolidated Financial Statements (Unaudited)
|
7
|
|
|
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
|
45
|
|
|
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
56
|
|
|
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
57
|
|
|
|
PART
II - OTHER INFORMATION
|
57
|
|
|
|
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
57
|
|
|
|
ITEM
1A.
|
RISK
FACTORS
|
57
|
|
|
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
59
|
|
|
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
59
|
|
|
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
59
|
|
|
|
ITEM
5.
|
OTHER
INFORMATION
|
59
|
|
|
|
ITEM
6.
|
EXHIBITS
|
59
|
|
|
|
SIGNATURES
|
|
60
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
|||||||
$
|
$
|
||||||
(restated)
|
(restated)
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
166,216
|
316,621
|
|||||
Restricted
cash
|
5,551,704
|
4,523,679
|
|||||
Accounts
receivable
|
15,482,635
|
8,188,985
|
|||||
Prepaid
expenses and other receivables - Note 8
|
6,397,568
|
2,101,133
|
|||||
Income
tax prepayments
|
-
|
767
|
|||||
Inventories
- Note 9
|
5,961,014
|
6,246,185
|
|||||
Prepaid
lease payments - Note 11
|
17,193
|
22,958
|
|||||
Total
Current Assets
|
33,576,330
|
21,400,328
|
|||||
Deferred
tax assets - Note 6
|
19,536
|
14,042
|
|||||
Plant
and equipment, net - Note 10
|
719,473
|
890,258
|
|||||
Leasehold
lands - Note 11
|
882,444
|
895,322
|
|||||
Held-to-maturity
investments - Note 12
|
300,771
|
301,196
|
|||||
Intangible
assets - Note 13
|
244,168
|
337,836
|
|||||
Restricted
cash - non-current
|
256,937
|
257,301
|
|||||
TOTAL
ASSETS
|
35,999,659
|
24,096,283
|
|||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
LIABILITIES
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
1,075,980
|
770,360
|
|||||
Other
payables and accrued liabilities - Note 14
|
51,491
|
190,358
|
|||||
Advance
from a related party - Note 15
|
12,268
|
-
|
|||||
Income
taxes payable
|
2,691,393
|
1,387,571
|
|||||
Bank
borrowings - Note 16
|
15,196,458
|
13,205,167
|
|||||
Total
Current Liabilities
|
19,027,590
|
15,553,456
|
|||||
Deferred
tax liabilities - Note 6
|
37,180
|
31,711
|
|||||
TOTAL
LIABILITIES
|
19,064,770
|
15,585,167
|
|||||
COMMITMENTS
AND CONTINGENCIES - Note 19
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
|||||||
$
|
$
|
||||||
(restated)
|
(restated)
|
||||||
STOCKHOLDERS’
EQUITY
|
|||||||
Preferred
stock - Note 17
|
|||||||
Par
value: US$0.0001
|
|||||||
Authorized:
10,000,000 shares
|
|||||||
Issued
and outstanding: 2007 - 2,250,348 shares (2006 - none)
|
225
|
-
|
|||||
Common
stock - Note 17
|
|||||||
Par
value: US$0.0001
|
|||||||
Authorized:
100,000,000 shares (2006 - 100,000,000 shares)
|
|||||||
Issued
and outstanding: 2007 - 23,156,629 shares (2006 - 19,454,420
shares)
|
2,316
|
1,946
|
|||||
Additional
paid-in capital
|
5,139,880
|
654,298
|
|||||
Accumulated
other comprehensive income
|
22,112
|
7,470
|
|||||
Retained
earnings
|
11,770,356
|
7,847,402
|
|||||
TOTAL
STOCKHOLDERS’ EQUITY
|
16,934,889
|
8,511,116
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
35,999,659
|
24,096,283
|
Three
months ended September 30,
|
Nine
months ended September 30.
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
$
|
$
|
$
|
$
|
||||||||||
(restated)
|
(restated)
|
(restated)
|
(restated)
|
||||||||||
Net
sales
|
22,972,645
|
19,647,209
|
64,960,224
|
62,874,395
|
|||||||||
Cost
of sales
|
(18,410,524
|
)
|
(17,332,702
|
)
|
(54,829,393
|
)
|
(55,599,295
|
)
|
|||||
Gross
profit
|
4,562,121
|
2,314,507
|
10,130,831
|
7,275,100
|
|||||||||
Other
income - Note 4
|
48,425
|
41,724
|
145,203
|
125,504
|
|||||||||
Depreciation
|
(64,635
|
)
|
(83,730
|
)
|
(193,499
|
)
|
(243,096
|
)
|
|||||
Administrative
and other operating
expenses,
including stock-based
compensation
|
(690,514
|
)
|
(359,472
|
)
|
(3,295,777
|
)
|
(971,717
|
)
|
|||||
Income
from operations
|
3,855,397
|
1,913,029
|
6,786,758
|
6,185,791
|
|||||||||
Fees
and costs related to reverse merger - Note 1
|
-
|
-
|
(736,197
|
)
|
-
|
||||||||
Other
income - Note 4
|
39,555
|
55,342
|
117,936
|
165,638
|
|||||||||
Interest
expense - Note 5
|
(316,516
|
)
|
(265,872
|
)
|
(830,935
|
)
|
(763,726
|
)
|
|||||
Income
before taxes
|
3,578,436
|
1,702,499
|
5,337,562
|
5,587,703
|
|||||||||
Income
taxes - Note 6
|
(697,737
|
)
|
(304,821
|
)
|
(1,414,608
|
)
|
(989,132
|
)
|
|||||
Net
income
|
2,880,699
|
1,397,678
|
3,922,954
|
4,598,571
|
|||||||||
Earnings
per common share - Note 3
|
|||||||||||||
-
Basic
|
$
|
0.12
|
$
|
0.07
|
$
|
0.17
|
$
|
0.24
|
|||||
-
Diluted
|
$
|
0.11
|
$
|
0.07
|
$
|
0.16
|
$
|
0.24
|
|||||
Weighted
average common shares
|
|||||||||||||
-
Basic
|
23,156,629
|
19,454,420
|
22,844,721
|
19,454,420
|
|||||||||
-
Diluted
|
25,406,977
|
19,454,420
|
24,874,262
|
19,454,420
|
Nine
months ended September 30,
|
|||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Unaudited)
|
||||||
$
|
$
|
||||||
(restated)
|
(restated)
|
||||||
Cash
flows from operating activities
|
|||||||
Net
income
|
3,922,954
|
4,598,571
|
|||||
Adjustments
to reconcile net income to net cash
|
|||||||
provided
by (used in) operating activities:
|
|||||||
Stock-based
compensation
|
1,852,494
|
-
|
|||||
Amortization
of intangible assets
|
92,884
|
115,965
|
|||||
Amortization
of leasehold lands
|
17,287
|
17,481
|
|||||
Depreciation
|
193,499
|
243,096
|
|||||
Loss
on disposal of plant and equipment
|
5,406
|
7,725
|
|||||
Income
taxes
|
1,414,608
|
989,132
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
(Increase)
decrease in -
|
|||||||
Accounts
receivable
|
(7,281,110
|
)
|
(3,264,603
|
)
|
|||
Prepaid
expenses and other receivables
|
(4,260,214
|
)
|
(1,118,481
|
)
|
|||
Inventories
|
275,517
|
767,389
|
|||||
Increase
(decrease) in -
|
|||||||
Accounts
payable
|
306,241
|
(279,202
|
)
|
||||
Other
payables and accrued liabilities
|
(138,142
|
)
|
(37,981
|
)
|
|||
Income
taxes payable
|
(112,601
|
)
|
(16,055
|
)
|
|||
Unearned
revenue
|
-
|
(1,595,187
|
)
|
||||
Net
cash provided by (used in) operating activities
|
(3,711,177
|
)
|
427,850
|
||||
Cash
flows from investing activities
|
|||||||
Acquisition
of plant and equipment
|
(30,257
|
)
|
(1,164,095
|
)
|
|||
Proceeds
from disposal of plant and equipment
|
320
|
2,034
|
|||||
Net
cash used in investing activities
|
(29,937
|
)
|
(1,162,061
|
)
|
|||
Cash
flows from financing activities
|
|||||||
Proceeds
from issuance of Series A convertible preferred stock
|
2,641,683
|
-
|
|||||
Proceeds
from new short-term bank loans
|
2,816,620
|
33,932
|
|||||
Repayment
of short-term bank loans
|
(4,029,839
|
)
|
(259,532
|
)
|
|||
Net
advances under other short-term bank borrowings
|
3,175,698
|
3,925,836
|
|||||
Increase
in restricted cash
|
(1,031,003
|
)
|
(1,180,479
|
)
|
|||
Advances
from related parties
|
(20,773
|
)
|
(28,798
|
)
|
|||
Decrease
in bank overdrafts
|
40,840
|
131,057
|
|||||
Dividends
paid
|
-
|
(2,445,712
|
)
|
||||
Net
cash provided by financing activities
|
3,593,226
|
176,304
|
|||||
Net
decrease in cash and cash equivalents
|
(147,888
|
)
|
(557,907
|
)
|
|||
Effect
of foreign currency translation on cash and cash
equivalents
|
(2,517
|
)
|
(538
|
)
|
|||
Cash
and cash equivalents - beginning of period
|
316,621
|
778,563
|
|||||
Cash
and cash equivalents - end of period
|
166,216
|
220,118
|
Nine
months ended September 30,
|
|||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Unaudited)
|
||||||
$
|
$
|
||||||
(restated)
|
(restated)
|
||||||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid for:
|
|||||||
Interest
|
830,935
|
763,726
|
|||||
Income
taxes
|
112,601
|
15,521
|
1. |
Organization
and recapitalization
|
1. |
Organization
and recapitalization
(continued)
|
2. |
Description
of business
|
Name
of company
|
Place
and date of incorporation
|
Issued
and fully paid capital
|
Principal
activities
|
Times
Manufacture & E-Commerce Corporation Ltd.
|
British
Virgin Islands
March
21, 2002
|
US$20,002
Ordinary
|
Investment
holding
|
Times
Manufacturing & E-Commerce Corporation Ltd. (“TMEHK”)
|
British
Virgin Islands
January
2, 2002
|
US$20,000
Ordinary
|
Investment
holding
|
Billion
Win International Enterprise Ltd. (“BW”)
|
Hong
Kong
March
5, 2001
|
HK$5,000,000
Ordinary
|
Trading
of watch components
|
Goldcome
Industrial Ltd. (“GI”)
|
Hong
Kong
March
2, 2001
|
HK$10,000
Ordinary
|
Trading
of watch components
|
Citibond
Industrial Ltd. (“CI”)
|
Hong
Kong
February
28, 2003
|
HK$1,000
Ordinary
|
Trading
of watch components
|
Megamooch
International Ltd. (“MI”)
|
Hong
Kong
April
2, 2001
|
HK$100
Ordinary
|
Trading
of watches and watch components
|
TME
Enterprise Ltd.
|
British
Virgin Islands
November
28, 2003
|
US$2
Ordinary
|
Investment
holding
|
Citibond
Design Ltd.
|
British
Virgin Islands
August
1, 2003
|
US$2
Ordinary
|
Inactive
|
Megamooch
Online Ltd.
|
British
Virgin Islands
September
6, 2003
|
US$2
Ordinary
|
Trading
of watches and watch components
|
3. |
Summary
of significant accounting policies
|
3. |
Summary
of significant accounting policies
(continued)
|
Nine
months ended September 30,
|
|||||||
2007
|
2006
|
||||||
$
|
$
|
||||||
Customer
A
|
-
|
7,656,660
|
|||||
Customer
B
|
-
|
7,522,227
|
|||||
Customer
C
|
-
|
7,342,760
|
|||||
Net
sales
|
-
|
22,521,760
|
|||||
Accounts
receivable
|
-
|
3,658,548
|
3. |
Summary
of significant accounting policies
(continued)
|
3. |
Summary
of significant accounting policies
(continued)
|
Trademarks
|
20
|
%
|
||
Websites
|
20
|
%
|
Buildings
|
over
the unexpired lease term
|
Furniture
and fixtures
|
20
- 25%
|
Office
equipment
|
25
- 33%
|
Machinery
and equipment
|
25
- 33%
|
Moulds
|
33%
|
Motor
vehicles
|
25
- 33%
|
3. |
Summary
of significant accounting policies
(continued)
|
3. |
Summary
of significant accounting policies
(continued)
|
3. |
Summary
of significant accounting policies
(continued)
|
|
Three Months Ended September
30,
|
||||||||||||||||||
|
2007
|
2006
|
|||||||||||||||||
|
|
Weighted
|
|
|
Weighted
|
|
|||||||||||||
|
Net
|
Average
|
|
Net
|
Average
|
|
|||||||||||||
|
Income
|
Shares
|
Per
Share
|
Income
|
Shares
|
Per
Share
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Earnings
per share - basic
|
|||||||||||||||||||
Net
income
|
$
|
2,880,699
|
23,156,629
|
$
|
0.12
|
$
|
1,397,678
|
19,454,420
|
$
|
0.07
|
|||||||||
Effect
of dilutive securities
|
|||||||||||||||||||
Convertible
preferred stock
|
-
|
2,250,348
|
-
|
-
|
|||||||||||||||
Earnings
per share - diluted
|
|||||||||||||||||||
Net
income
|
$
|
2,880,699
|
25,406,977
|
$
|
0.11
|
$
|
1,397,678
|
19,454,420
|
$
|
0.07
|
|
Nine Months Ended September
30,
|
||||||||||||||||||
|
2007
|
2006
|
|||||||||||||||||
|
|
Weighted
|
|
|
Weighted
|
|
|||||||||||||
|
Net
|
Average
|
|
Net
|
Average
|
|
|||||||||||||
|
Income
|
Shares
|
Per
Share
|
Income
|
Shares
|
Per
Share
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Earnings
per share - basic
|
|||||||||||||||||||
Net
income
|
$
|
3,922,954
|
22,844,721
|
$
|
0.17
|
$
|
4,598,571
|
19,454,420
|
$
|
0.24
|
|||||||||
Effect
of dilutive securities
|
|||||||||||||||||||
Convertible
preferred stock
|
-
|
2,029,541
|
-
|
-
|
|||||||||||||||
Earnings
per share - diluted
|
|||||||||||||||||||
Net
income
|
$
|
3,922,954
|
24,874,262
|
$
|
0.16
|
$
|
4,598,571
|
19,454,420
|
$
|
0.24
|
3. |
Summary
of significant accounting policies
(continued)
|
3. |
Summary
of significant accounting policies
(continued)
|
4. |
Other
income
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
$
|
$
|
$
|
$
|
||||||||||
Operating
income
|
|||||||||||||
License
fee of intangible assets
|
32,668
|
41,724
|
97,955
|
125,504
|
|||||||||
Rental
income
|
15,757
|
-
|
47,248
|
-
|
|||||||||
48,425
|
41,724
|
145,203
|
125,504
|
||||||||||
Non-operating
income
|
|||||||||||||
Bank
interest income
|
35,114
|
47,246
|
112,020
|
141,250
|
|||||||||
Net
exchange gains
|
600
|
276
|
2,075
|
574
|
|||||||||
Other
interest income
|
-
|
7,820
|
-
|
23,787
|
|||||||||
Sundry
|
3,841
|
-
|
3,841
|
27
|
|||||||||
39,555
|
55,342
|
117,936
|
165,638
|
||||||||||
87,980
|
97,066
|
263,139
|
291,142
|
5. |
Interest
expense
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
$
|
$
|
$
|
$
|
||||||||||
Interest
on bank trust receipts
|
291,499
|
252,359
|
759,539
|
709,661
|
|||||||||
Interest
on short-term bank loans
|
10,844
|
2,384
|
27,608
|
10,758
|
|||||||||
Interest
on bank overdrafts
|
11,859
|
11,129
|
33,050
|
43,307
|
|||||||||
Interest
on other loans
|
2,314
|
-
|
10,738
|
-
|
|||||||||
316,516
|
265,872
|
830,935
|
763,726
|
6. |
Income
taxes
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
$
|
$
|
$
|
$
|
||||||||||
Hong
Kong profits tax
|
|||||||||||||
Current
period
|
697,737
|
304,821
|
1,414,608
|
989,132
|
6. |
Income
taxes (continued)
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
$
|
$
|
||||||
Temporary
difference on accelerated tax
|
|||||||
depreciation
on plant and equipment
|
17,644
|
17,669
|
|||||
|
|||||||
Deferred
tax liabilities, net
|
17,644
|
17,669
|
|||||
|
|||||||
Recognized
in the balance sheet:
|
|||||||
Net
deferred tax assets
|
(19,536
|
)
|
(14,042
|
)
|
|||
Net
deferred tax liabilities
|
37,180
|
31,711
|
|||||
|
|||||||
|
17,644
|
17,669
|
7. |
Comprehensive
income
|
Three
months ended
|
Nine
months ended
|
||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
$
|
$
|
$
|
$
|
||||||||||
Net
income
|
2,880,699
|
1,397,678
|
3,922,954
|
4,598,571
|
|||||||||
Foreign
currency translation adjustment
|
62,784
|
(13,703
|
)
|
14,642
|
(23,976
|
)
|
|||||||
Total
comprehensive income
|
2,943,483
|
1,383,975
|
3,937,596
|
4,574,595
|
8. |
Prepaid
expenses and other
receivables
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
$
|
$
|
||||||
Rebate
receivable
|
2,379,725
|
-
|
|||||
Interest
receivable
|
-
|
20,218
|
|||||
Rental
receivable
|
-
|
46,314
|
|||||
Other
receivable
|
300,617
|
-
|
|||||
Purchase
deposits paid
|
3,573,480
|
1,530,372
|
|||||
Sales
proceeds of intangible assets receivable
|
-
|
301,042
|
|||||
Other
deposits and prepayments
|
143,746
|
203,187
|
|||||
6,397,568
|
2,101,133
|
9. |
Inventories
|
|
As
of
|
||||||
|
September
30,
|
December
31,
|
|||||
|
2007
|
2006
|
|||||
|
(Unaudited)
|
(Audited)
|
|||||
|
$
|
$
|
|||||
|
|
|
|||||
Completed
watches, at cost
|
-
|
1,745,648
|
|||||
Watch
movements, at cost
|
5,961,014
|
4,500,537
|
|||||
|
|||||||
|
5,961,014
|
6,246,185
|
10. |
Plant
and equipment
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
$
|
$
|
||||||
Cost
|
|||||||
Buildings
|
242,007
|
242,350
|
|||||
Furniture
and fixtures
|
489,780
|
492,866
|
|||||
Office
equipment
|
58,816
|
145,911
|
|||||
Machinery
and equipment
|
407,944
|
321,626
|
|||||
Moulds
|
384,121
|
384,665
|
|||||
Motor
vehicles
|
70,455
|
45,928
|
|||||
1,653,123
|
1,633,346
|
||||||
Accumulated
depreciation
|
|||||||
Buildings
|
12,856
|
8,441
|
|||||
Furniture
and fixtures
|
308,224
|
237,508
|
|||||
Office
equipment
|
39,951
|
100,612
|
|||||
Machinery
and equipment
|
224,203
|
93,475
|
|||||
Moulds
|
316,232
|
276,936
|
|||||
Motor
vehicles
|
32,184
|
26,116
|
|||||
933,650
|
743,088
|
||||||
Net
|
|||||||
Buildings
|
229,151
|
233,909
|
|||||
Furniture
and fixtures
|
181,556
|
255,358
|
|||||
Office
equipment
|
18,865
|
45,299
|
|||||
Machinery
and equipment
|
183,741
|
228,151
|
|||||
Moulds
|
67,889
|
107,729
|
|||||
Motor
vehicles
|
38,271
|
19,812
|
|||||
719,473
|
890,258
|
11. |
Leasehold
lands
|
|
As
of
|
||||||
|
September
30,
|
December
31,
|
|||||
|
2007
|
2006
|
|||||
|
(Unaudited)
|
(Audited)
|
|||||
|
$
|
$
|
|||||
|
|
|
|||||
Cost
|
948,172
|
949,514
|
|||||
|
|||||||
Accumulated
amortization
|
(48,535
|
)
|
(31,234
|
)
|
|||
|
|||||||
Net
|
899,637
|
918,280
|
|||||
|
|||||||
Analyzed
for reporting purposes as:
|
|||||||
Current
asset
|
17,193
|
22,958
|
|||||
Non-current
asset
|
882,444
|
895,322
|
|||||
|
|||||||
|
899,637
|
918,280
|
12. |
Held-to-maturity
investments
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
$
|
$
|
||||||
Hang
Seng Capital Guarantee Investment Fund
|
|||||||
-
30,000 units at $10 each, interest rate at 10.5% in 3.75
years
|
|||||||
Cost
|
300,771
|
301,196
|
13. |
Intangible
assets
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
$
|
$
|
||||||
Cost
|
|||||||
Trademarks
|
420,863
|
200,695
|
|||||
Websites
|
200,411
|
421,459
|
|||||
621,274
|
622,154
|
||||||
Accumulated
amortization
|
|||||||
Trademarks
|
234,814
|
112,389
|
|||||
Websites
|
142,292
|
171,929
|
|||||
377,106
|
284,318
|
||||||
Net
|
|||||||
Trademarks
|
186,048
|
88,306
|
|||||
Websites
|
58,119
|
249,530
|
|||||
244,168
|
337,836
|
14. |
Other
payables and accrued
liabilities
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
$
|
$
|
||||||
Accrued
expenses
|
42,498
|
181,352
|
|||||
Sales
deposits received
|
8,993
|
9,006
|
|||||
51,491
|
190,358
|
15. |
Advance
from a related
party
|
As
of
|
|||||||
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
$
|
$
|
||||||
Advance
from a director
|
12,268
|
-
|
16. |
Bank
borrowings
|
|
As
of
|
||||||
|
September
30,
|
December
31,
|
|||||
|
2007
|
2006
|
|||||
|
(Unaudited)
|
(Audited)
|
|||||
|
$
|
$
|
|||||
Secured:
|
|||||||
Bank
overdrafts repayable on demand
|
591,908
|
551,714
|
|||||
Repayable
within one year
|
|||||||
Short-term
bank loans
|
283,956
|
1,469,866
|
|||||
Other
bank borrowings
|
14,320,594
|
11,183,587
|
|||||
|
|||||||
|
15,196,458
|
13,205,167
|
(a)
|
first
fixed legal charge over leasehold land and buildings with carrying
amounts
of $1,128,788 (notes 10 and 11);
|
(b) |
charge
over bank deposits of $5,808,641;
|
(c) |
charge
over held-to-maturity investments of $300,711 (note
12);
|
(d) |
personal
guarantee executed by a director of the Company;
and
|
(e) |
other
financial covenant
.
|
17. |
Common
stock and convertible preferred
stock
|
Series
A Convertible Preferred Stock
|
Common
Stock
|
Additional
|
|||||||||||||||||
($0.0001
Par Value)
|
($0.0001
Par Value)
|
Paid-In
|
|||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
|||||||||||||||
Balances,
December 31, 2006
|
0
|
$
|
0
|
19,454,420
|
$
|
1,946
|
$
|
654,298
|
|||||||||||
Jan.
23, 2007
|
Shares
issued to SRKP 9 founders:
|
||||||||||||||||||
|
Originally
issued on Jan. 3, 2006;
deemed
issued on Jan. 23, 2007 for
reverse
merger purposes
|
-
|
-
|
2,700,000
|
270
|
(270
|
)
|
||||||||||||
|
Issued
in connection with
1.371188519-
for-1 retroactive stock
split
|
1,002,209
|
100
|
(100
|
)
|
||||||||||||||
Jan.
23, 2007
|
Adjustment
to SRKP 9 accounts to
reflect
reverse merger
|
-
|
-
|
-
|
-
|
(7,999
|
)
|
||||||||||||
Jan.
23, 2007
|
Gross
proceeds from shares sold in offering
-
initial closing
|
1,749,028
|
175
|
-
|
-
|
2,256,071
|
|||||||||||||
Jan.
23, 2007
|
Offering
costs - initial closing (9% of gross)
|
|
-
|
-
|
-
|
-
|
(203,062
|
)
|
|||||||||||
Jan.23,
2007
|
Stock-based
compensation
|
-
|
-
|
-
|
-
|
1,852,494
|
|
||||||||||||
Feb.
9,
2007
|
Gross
proceeds from shares sold in offering
-
final closing
|
501,320
|
50
|
-
|
-
|
646,651
|
|||||||||||||
Feb.
9,
2007
|
Offering
costs - initial closing
(9%
of gross)
|
|
-
|
-
|
-
|
-
|
(58,203
|
)
|
|||||||||||
Balances,
September 30, 2007
|
2,250,348
|
$
|
225
|
23,156,629
|
$
|
2,316
|
$
|
5,139,880
|
17. |
Common
stock and convertible preferred stock
(continued)
|
17. |
Common
stock and convertible preferred stock
(continued)
|
17. |
Common
stock and convertible preferred stock
(continued)
|
Three
Months Ended
|
Cumulative
Probability Factor at Quarter-End
|
Amount
Charged to Operations
|
|||||
March
31, 2007
|
66.22
|
%
|
$
|
1,611,563
|
|||
June
30, 2007
|
67.89
|
%
|
40,642
|
||||
September
30, 2007
|
76.12
|
%
|
200,289
|
||||
Total
through September 30, 2007
|
$
|
1,852,494
|
17. |
Common
stock and convertible preferred stock
(continued)
|
18. |
Pension
plans
|
19. |
Commitments
and contingencies
|
Period
ending September 30,
|
||||
2008
|
$
|
79,636
|
||
2009
|
12,759
|
|||
$
|
92,395
|
20. |
Segment
Information
|
Three
months ended
September
30, 2007
|
Watch
Movements
|
Completed
Watches
|
Total
|
|||||||
$
|
$
|
$
|
||||||||
Sales
|
18,366,450
|
4,606,195
|
22,972,645
|
|||||||
Cost
of sales
|
(15,947,637
|
)
|
(2,462,887
|
)
|
(18,410,524
|
)
|
||||
Segment
result
|
2,418,813
|
2,143,308
|
4,562,121
|
|||||||
Three
months ended
September
30, 2006
|
Watch
Movements
|
Completed
Watches
|
Total
|
|||||||
$
|
|
$
|
|
$
|
||||||
Sales
|
17,340,582
|
2,306,627
|
19,647,209
|
|||||||
Cost
of sales
|
(16,094,160
|
)
|
(1,238,542
|
)
|
(17,332,702
|
)
|
||||
Segment
result
|
1,246,422
|
1,068,085
|
2,314,507
|
Nine
months ended
September
30, 2007
|
Watch
Movements
|
Completed
Watches
|
Total
|
|||||||
$
|
$
|
$
|
||||||||
Sales
|
56,600,993
|
8,359,231
|
64,960,224
|
|||||||
Cost
of sales
|
(50,356,664
|
)
|
(4,472,729
|
)
|
(54,829,393
|
)
|
||||
Segment
result
|
6,244,329
|
3,886,502
|
10,130,831
|
|||||||
Nine
months ended
September
30, 2006
|
Watch
Movements
|
Completed
Watches
|
Total
|
|||||||
|
$
|
|
$
|
$
|
||||||
Sales
|
55,217,795
|
7,656,600
|
62,874,395
|
|||||||
Cost
of sales
|
(51,577,493
|
)
|
(4,021,802
|
)
|
(55,599,295
|
)
|
||||
Segment
result
|
3,640,302
|
3,634,798
|
7,275,100
|
20. |
Segment
Information (continued)
|
21. |
Restatement
|
21. |
Restatement
(continued)
|
2007
|
2007
|
2007
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
Net
sales
|
64,960,224
|
64,960,224
|
-
|
|||||||
Cost
of sales
|
(54,644,056
|
)
|
(54,829,393
|
)
|
(185,337
|
)
|
||||
Gross
profit
|
10,316,168
|
10,130,831
|
(185,337
|
)
|
||||||
Other
income
|
145,203
|
145,203
|
-
|
|||||||
Depreciation
|
(193,499
|
)
|
(193,499
|
)
|
-
|
|||||
Administrative
and other operating
expenses,
including stock-based
compensation
|
(1,443,283
|
)
|
(3,295,777
|
)
|
(1,852,494
|
)
|
||||
Income
from operations
|
8,824,589
|
6,786,758
|
(2,037,831
|
)
|
||||||
Fees
and costs related to reverse merger
|
(736,197
|
)
|
(736,197
|
)
|
-
|
|||||
Other
income
|
117,936
|
117,936
|
-
|
|||||||
Interest
expense
|
(830,935
|
)
|
(830,935
|
)
|
-
|
|||||
Income
before taxes
|
7,375,393
|
5,337,562
|
(2,037,831
|
)
|
||||||
Income
taxes
|
(1,512,523
|
)
|
(1,414,608
|
)
|
97,915
|
|||||
Net
income
|
5,862,870
|
3,922,954
|
(1,939,916
|
)
|
||||||
Earnings
per common share
|
||||||||||
-
Basic
|
0.26
|
0.17
|
(0.09
|
)
|
||||||
-
Diluted
|
0.24
|
0.16
|
(0.08
|
)
|
||||||
Weighted
average common shares
|
||||||||||
-
Basic
|
22,844,721
|
22,844,721
|
-
|
|||||||
-
Diluted
|
24,874,262
|
24,874,262
|
-
|
21. |
Restatement
(continued)
|
2006
|
2006
|
2006
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
Net
sales
|
62,874,395
|
62,874,395
|
-
|
|||||||
Cost
of sales
|
(56,510,946
|
)
|
(55,599,295
|
)
|
911,651
|
|||||
Gross
profit
|
6,363,449
|
7,275,100
|
911,651
|
|||||||
Other
income
|
125,504
|
125,504
|
-
|
|||||||
Depreciation
|
(243,096
|
)
|
(243,096
|
)
|
-
|
|||||
Administrative
and other operating expenses, including stock-based compensation
|
(971,717
|
)
|
(971,717
|
)
|
-
|
|||||
Income
from operations
|
5,274,140
|
6,185,791
|
911,651
|
|||||||
Fees
and costs related to reverse merger
|
-
|
-
|
-
|
|||||||
Other
income
|
165,638
|
165,638
|
-
|
|||||||
Interest
expense
|
(763,726
|
)
|
(763,726
|
)
|
-
|
|||||
Income
before taxes
|
4,676,052
|
5,587,703
|
911,651
|
|||||||
Income
taxes
|
(829,593
|
)
|
(989,132
|
(159,539
|
)
|
|||||
Net
income
|
3,846,459
|
4,598,571
|
752,112
|
|||||||
Earnings
per common share
|
||||||||||
-
Basic and Diluted
|
0.20
|
0.24
|
0.04
|
|||||||
Weighted
average common shares
|
||||||||||
-
Basic and Diluted
|
19,454,420
|
19,454,420
|
-
|
21. |
Restatement
(continued)
|
2007
|
2007
|
2007
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
Net
sales
|
22,972,645
|
22,972,645
|
-
|
|||||||
Cost
of sales
|
(18,099,186
|
)
|
(18,410,524
|
)
|
(311,338
|
)
|
||||
Gross
profit
|
4,873,459
|
4,562,121
|
(311,338
|
)
|
||||||
Other
income
|
48,425
|
48,425
|
-
|
|||||||
Depreciation
|
(64,635
|
)
|
(64,635
|
)
|
-
|
|||||
Administrative
and other operating
expenses,
including stock-based
compensation
|
(490,225
|
)
|
(690,514
|
)
|
(200,289
|
)
|
||||
Income
from operations
|
4,367,024
|
3,855,397
|
(511,627
|
)
|
||||||
Fees
and costs related to reverse merger
|
-
|
-
|
-
|
|||||||
Other
income
|
39,555
|
39,555
|
-
|
|||||||
Interest
expense
|
(316,516
|
)
|
(316,516
|
)
|
-
|
|||||
Income
before taxes
|
4,090,063
|
3,578,436
|
(511,627
|
)
|
||||||
Income
taxes
|
(752,221
|
)
|
(697,737
|
)
|
54,484
|
|||||
Net
income
|
3,337,842
|
2,880,699
|
(457,143
|
)
|
||||||
Earnings
per common share
|
||||||||||
-
Basic
|
0.14
|
0.12
|
(0.02
|
)
|
||||||
-
Diluted
|
0.13
|
0.11
|
(0.02
|
)
|
||||||
Weighted
average common shares
|
||||||||||
-
Basic
|
23,156,629
|
23,156,629
|
-
|
|||||||
-
Diluted
|
25,406,977
|
25,406,977
|
-
|
21. |
Restatement
(continued)
|
2006
|
2006
|
2006
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
$
|
$
|
$
|
||||||||
Net
sales
|
19,647,209
|
19,647,209
|
-
|
|||||||
Cost
of sales
|
(16,730,052
|
)
|
(17,332,702
|
)
|
(602,650
|
)
|
||||
Gross
profit
|
2,917,157
|
2,314,507
|
(602,650
|
)
|
||||||
Other
income
|
41,724
|
41,724
|
-
|
|||||||
Depreciation
|
(83,730
|
)
|
(83,730
|
)
|
-
|
|||||
Administrative
and other operating
expenses
|
(359,472
|
)
|
(359,472
|
)
|
-
|
|||||
Income
from operations
|
2,515,679
|
1,913,029
|
(602,650
|
)
|
||||||
Fees
and costs related to reverse merger
|
-
|
-
|
-
|
|||||||
Other
income
|
55,342
|
55,342
|
-
|
|||||||
Interest
expense
|
(265,872
|
)
|
(265,872
|
)
|
-
|
|||||
Income
before taxes
|
2,305,149
|
1,702,499
|
(602,650
|
)
|
||||||
Income
taxes
|
(410,284
|
)
|
(304,821
|
)
|
105,463
|
|||||
Net
income
|
1,894,865
|
1,397,678
|
(497,187
|
)
|
||||||
Earnings
per common share
|
||||||||||
-
Basic and diluted
|
0.10
|
0.07
|
(0.03
|
)
|
||||||
Weighted
average common shares
|
||||||||||
-
Basic and diluted
|
19,454,420
|
19,454,420
|
-
|
21. |
Restatement
(continued)
|
2007
|
2007
|
2007
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported
)
|
adjustments
)
|
|||||||||
$
|
$
|
$
|
||||||||
ASSETS
|
||||||||||
Current
Assets
:
|
||||||||||
Cash
and cash equivalents
|
166,216
|
166,216
|
-
|
|||||||
Restricted
cash
|
5,551,704
|
5,551,704
|
-
|
|||||||
Accounts
receivable
|
15,482,635
|
15,482,635
|
-
|
|||||||
Prepaid
expenses and other receivables
|
6,397,568
|
6,397,568
|
-
|
|||||||
Income
tax prepayments
|
-
|
-
|
-
|
|||||||
Inventories
|
6,520,527
|
5,961,014
|
(559,513
|
)
|
||||||
Prepaid
lease payments
|
17,193
|
17,193
|
-
|
|||||||
Total
Current Assets
|
34,135,843
|
33,576,330
|
(559,513
|
)
|
||||||
Deferred
tax assets
|
19,536
|
19,536
|
-
|
|||||||
Plant
and equipment, net
|
719,473
|
719,473
|
-
|
|||||||
Leasehold
lands
|
882,444
|
882,444
|
-
|
|||||||
Held-to-maturity
investments
|
300,771
|
300,771
|
-
|
|||||||
Intangible
assets
|
244,168
|
244,168
|
-
|
|||||||
Restricted
cash - non-current
|
256,937
|
256,937
|
-
|
|||||||
TOTAL
ASSETS
|
36,559,172
|
35,999,659
|
(559,513
|
)
|
||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||
LIABILITIES
|
||||||||||
Current
Liabilities
:
|
||||||||||
Accounts
payable
|
1,075,980
|
1,075,980
|
-
|
|||||||
Other
payables and accrued liabilities
|
51,491
|
51,491
|
-
|
|||||||
Advance
from a related party
|
12,268
|
12,268
|
-
|
|||||||
Income
taxes payable
|
2,854,788
|
2,691,393
|
(163,395
|
)
|
||||||
Bank
borrowings
|
15,196,458
|
15,196,458
|
-
|
|||||||
Total
Current Liabilities
|
19,190,985
|
19,027,590
|
(163,395
|
)
|
||||||
Deferred
tax liabilities
|
37,180
|
37,180
|
-
|
|||||||
TOTAL
LIABILITIES
|
19,228,165
|
19,064,770
|
(163,395
|
)
|
||||||
COMMITMENTS
AND CONTINGENCIES
|
21. |
Restatement
(continued)
|
2007
|
2007
|
2007
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported
)
|
adjustments
)
|
|||||||||
$
|
$
|
$
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||||
Preferred
stock
|
||||||||||
Par
value
:
US$0.0001
|
||||||||||
Authorized:
10,000,000 shares
|
||||||||||
Issued
and outstanding: 2007 - 2,250,348 shares
|
225
|
225
|
-
|
|||||||
Common
stock
|
||||||||||
Par
value
:
US$0.0001
|
||||||||||
Authorized:
100,000,000 shares
|
||||||||||
Issued
and outstanding: 2007 - 23,156,629 shares
|
2,316
|
2,316
|
-
|
|||||||
Additional
paid-in capital
|
3,287,386
|
5,139,880
|
1,852,494
|
|||||||
Accumulated
other comprehensive income
|
22,112
|
22,112
|
-
|
|||||||
Retained
earnings
|
14,018,968
|
11,770,356
|
(2,248,612
|
)
|
||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
17,331,007
|
16,934,889
|
(396,118
|
)
|
||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
36,559,172
|
35,999,659
|
(559,513
|
)
|
21. |
Restatement
(continued)
|
2007
|
2007
|
2007
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported)
|
Adjustments)
|
|||||||||
Cash
flows from operating activities
|
||||||||||
Net
income
|
5,862,870
|
3,922,954
|
(1,939,916
|
)
|
||||||
Adjustments
to reconcile net income to net cash
|
||||||||||
used
in operating activities:
|
||||||||||
Stock-based
compensation
|
-
|
1,852,494
|
1,852,494
|
|||||||
Amortization
of intangible assets
|
92,884
|
92,884
|
-
|
|||||||
Amortization
of leasehold lands
|
17,287
|
17,287
|
-
|
|||||||
Depreciation
|
193,499
|
193,499
|
-
|
|||||||
Loss
on disposal of plant and equipment
|
5,406
|
5,406
|
-
|
|||||||
Income
taxes
|
1,512,523
|
1,414,608
|
(97,915
|
)
|
||||||
Changes
in operating assets and liabilities:
|
||||||||||
(Increase)
decrease in -
|
||||||||||
Accounts
receivable
|
(7,281,110
|
)
|
(7,281,110
|
)
|
-
|
|||||
Prepaid
expenses and other receivables
|
(4,260,214
|
)
|
(4,260,214
|
)
|
-
|
|||||
Inventories
|
90,180
|
275,517
|
185,337
|
|||||||
Increase
(decrease) in -
|
||||||||||
Accounts
payable
|
306,241
|
306,241
|
-
|
|||||||
Other
payables and accrued liabilities
|
(138,142
|
)
|
(138,142
|
)
|
-
|
|||||
Income
taxes payable
|
(112,601
|
)
|
(112,601
|
)
|
-
|
|||||
Net
cash used in operating activities
|
(3,711,177
|
)
|
(3,711,177
|
)
|
-
|
|||||
Cash
flows from investing activities
|
||||||||||
Acquisition
of plant and equipment
|
(30,257
|
)
|
(30,257
|
)
|
-
|
|||||
Proceeds
from disposal of plant and equipment
|
320
|
320
|
-
|
|||||||
Net
cash used in investing activities
|
(29,937
|
)
|
(29,937
|
)
|
-
|
|||||
Cash
flows from financing activities
|
||||||||||
Proceeds
from issuance of Series A convertible preferred stock
|
2,641,683
|
2,641,683
|
-
|
|||||||
Proceeds
from new short-term bank loans
|
2,816,620
|
2,816,620
|
-
|
|||||||
Repayment
of short-term bank loans
|
(4,029,839
|
)
|
(4,029,839
|
)
|
-
|
|||||
Net
advances under other short-term bank borrowings
|
3,175,698
|
3,175,698
|
-
|
|||||||
Increase
in restricted cash
|
(1,031,003
|
)
|
(1,031,003
|
)
|
-
|
|||||
Advances
from related parties
|
(20,773
|
)
|
(20,773
|
)
|
-
|
|||||
Decrease
in bank overdrafts
|
40,840
|
40,840
|
-
|
|||||||
Net
cash provided by financing activities
|
3,593,226
|
3,593,226
|
-
|
|||||||
Net
decrease in cash and cash equivalents
|
(147,888
|
)
|
(147,888
|
)
|
-
|
|||||
Effect
of foreign currency translation on cash and cash
equivalents
|
(2,517
|
)
|
(2,517
|
)
|
-
|
|||||
Cash
and cash equivalents - beginning of period
|
316,621
|
316,621
|
-
|
|||||||
Cash
and cash equivalents - end of period
|
166,216
|
166,216
|
-
|
21. |
Restatement
(continued)
|
2006
|
2006
|
2006
|
||||||||
(As
originally
|
(Restated)
|
(Effect
of
|
||||||||
reported)
|
adjustments)
|
|||||||||
Cash
flows from operating activities
|
||||||||||
Net
income
|
3,846,459
|
4,598,571
|
752,112
|
|||||||
Adjustments
to reconcile net income to net cash
|
||||||||||
provided
by operating activities
:
|
||||||||||
Amortization
of intangible assets
|
115,965
|
115,965
|
-
|
|||||||
Amortization
of leasehold lands
|
17,481
|
17,481
|
-
|
|||||||
Depreciation
|
243,096
|
243,096
|
-
|
|||||||
Dividend
income
|
(4,486
|
)
|
-
|
A |
4,486
|
|||||
Loss
on disposal of plant and equipment
|
7,725
|
7,725
|
-
|
|||||||
Income
taxes
|
829,593
|
989,132
|
159,539
|
|||||||
Changes
in operating assets and liabilities
:
|
||||||||||
(Increase)
decrease in -
|
||||||||||
Accounts
receivable
|
(3,264,603
|
)
|
(3,264,603
|
)
|
-
|
|||||
Prepaid
expenses and other receivables
|
(1,118,481
|
)
|
(1,118,481
|
)
|
-
|
|||||
Inventories
|
1,679,040
|
767,389
|
(911,651
|
)
|
||||||
Increase
(decrease) in -
|
||||||||||
Accounts
payable
|
(279,202
|
)
|
(279,202
|
)
|
-
|
|||||
Other
payables and accrued liabilities
|
(37,981
|
)
|
(37,981
|
)
|
-
|
|||||
Income
taxes payable
|
(16,055
|
)
|
(16,055
|
)
|
-
|
|||||
Unearned
revenue
|
(1,595,187
|
)
|
(1,595,187
|
)
|
-
|
|||||
Net
cash provided by operating activities
|
423,364
|
427,850
|
4,486
|
|||||||
Cash
flows from investing activities
|
||||||||||
Acquisition
of plant and equipment
|
(1,164,095
|
)
|
(1,164,095
|
)
|
-
|
|||||
Proceeds
from disposal of plant and equipment
|
2,034
|
2,034
|
-
|
|||||||
Dividend
received
|
4,486
|
-
|
A |
(4,486
|
)
|
|||||
Net
cash used in investing activities
|
(1,157,575
|
)
|
(1,162,061
|
)
|
(4,486
|
)
|
||||
Cash
flows from financing activities
|
||||||||||
Proceeds
from new short-term bank loans
|
33,932
|
33,932
|
-
|
|||||||
Repayment
of short-term bank loans
|
(259,532
|
)
|
(259,532
|
)
|
-
|
|||||
Net
advances under other short term bank borrowings
|
3,925,836
|
3,925,836
|
-
|
|||||||
Increase
in restricted cash
|
(1,180,479
|
)
|
(1,180,479
|
)
|
-
|
|||||
Advances
from related parties
|
(28,798
|
)
|
(28,798
|
)
|
-
|
|||||
Decrease
in bank overdrafts
|
131,057
|
131,057
|
-
|
|||||||
Dividends
paid
|
(2,445,712
|
)
|
(2,445,712
|
)
|
-
|
|||||
Net
cash provided by financing activities
|
176,304
|
176,304
|
-
|
|||||||
Net
decrease in cash and cash equivalents
|
(557,907
|
)
|
(557,907
|
)
|
-
|
|||||
Effect
of foreign currency translation on cash and cash
equivalents
|
(538
|
)
|
(538
|
)
|
-
|
|||||
Cash
and cash equivalents - beginning of period
|
778,563
|
778,563
|
-
|
|||||||
Cash
and cash equivalents - end of period
|
220,118
|
220,118
|
-
|
22. |
Subsequent
Events
|
●
|
The
Bonds bear cash interest from November 13, 2007 at the rate of
6% per
annum for the first year after November 13, 2007 and 3% per annum
thereafter, of the principal amount of the
Bonds.
|
●
|
Each
Bond is convertible at the option of the holder at any time on
and after
365 days after the date the Company’s shares of common stock commence
trading on the American Stock Exchange or any alternative stock
exchange
(the “Listing Date”) into shares of common stock of the Company at an
initial per share conversion price (“Conversion Price”) equal to the price
per share at which shares are sold in the Company’s proposed initial
public offering on the American Stock Exchange (“AMEX”) with minimum gross
proceeds of US$2,000,000. If no initial public offering has occurred
prior
to conversion, the Conversion Price will be US$2.00, subject to
adjustment
according to the Terms of the Bonds. No Bonds may be converted
after the
close of business on November 13, 2012, or if such Bond is called
for
redemption before the maturity date, then up to the close of business
on a
date no later than seven business days prior to the date fixed
for
redemption thereof.
|
22. |
Subsequent
Events (continued)
|
● |
The
number of shares of the Company’s common stock to be issued on conversion
of the Bonds will be determined by dividing the principal amount
of each
Bond to be converted by the Conversion Price in effect at the conversion
date. The Conversion Price is subject to adjustment in certain
events,
including the Company’s issuance of additional shares of common stock or
rights to purchase common stock at a per share or per share exercise
or
conversion price, respectively, at less than the applicable Conversion
Price of the Bonds. If for the period of 20 consecutive trading
days
immediately prior to November 13, 2009 or September 29, 2012, the
Conversion Price for the Bonds is higher than the average closing
price
for the shares, then the Conversion Price will be reset to such
average
closing price; provided that, the conversion price will not be
reset lower
than 70% of the then existing conversion price. In addition, the
Trust
Deed provides that the Conversion Price of the Bonds cannot be
adjusted to
lower than $0.25 per share of common stock (as adjusted for stock
splits,
stock dividends, spin-offs, rights offerings, recapitalizations
and
similar events).
|
● |
If
on or before November 13, 2008, (i) the Company common stock is
not listed
on AMEX or the New York Stock Exchange or NASDAQ or (ii) the Bonds,
Warrants, and shares underlying the Bonds and Warrants are not
registered
with the Securities and Exchange Commission (the “SEC”), the holder of the
Bonds can require the Company to redeem the Bonds at 106.09% of
their
principal amount. Also, at any time after November 13, 2010, the
holders
of the Bonds can require the Company to redeem the Bonds at 126.51%
of
their principal amount. The Company is required to redeem any outstanding
Bonds at 150.87% of its principal amount on November 13,
2012.
|
22. |
Subsequent
Events (continued)
|
· |
Interest.
The Bonds bear cash interest from November 13, 2007 at the rate of
6% per
annum for the first year after November 13, 2007 and 3% per annum
thereafter, of the principal amount of the
Bonds.
|
· |
Conversion.
Each Bond is convertible at the option of the holder at any time
on and
after 365 days after the date our shares of common stock commence
trading
on the American Stock Exchange or any alternative stock exchange
(the
“Listing Date”) into shares of our common stock at an initial per share
conversion price (“Conversion Price”) equal to the price per share at
which shares are sold in our proposed initial public offering on
the
American Stock Exchange (“AMEX”) with minimum gross proceeds of
US$2,000,000. If no initial public offering has occurred prior to
conversion, the Conversion Price will be US$2.00, subject to adjustment
according to the Terms of the Bonds. No Bonds may be converted after
the
close of business on November 13, 2012, or if such Bond is called
for
redemption before the maturity date, then up to the close of business
on a
date no later than seven business days prior to the date fixed for
redemption thereof.
|
· |
Conversion
Price Adjustments.
The number of shares of our common stock to be issued on conversion
of the
Bonds will be determined by dividing the principal amount of each
Bond to
be converted by the Conversion Price in effect at the conversion
date. The
Conversion Price is subject to adjustment in certain events, including
our
issuance of additional shares of common stock or rights to purchase
common
stock at a per share or per share exercise or conversion price,
respectively, at less than the applicable Conversion Price of the
Bonds.
If for the period of 20 consecutive trading days immediately prior
to
November 13, 2009 or September 29, 2012, the Conversion Price for
the
Bonds is higher than the average closing price for our shares, then
the
Conversion Price will be reset to such average closing price; provided
that, the Conversion Price will not be reset lower than 70% of the
then
existing Conversion Price. In addition, the Trust Deed provides that
the
Conversion Price of the Bonds cannot be adjusted to lower than $0.25
per
share of common stock (as adjusted for stock splits, stock dividends,
spin-offs, rights offerings, recapitalizations and similar
events).
|
· |
Mandatory
Redemptions.
If
on or before November 13, 2008, (i) our common stock is not listed
on AMEX
or the New York Stock Exchange or NASDAQ or (ii) the Bonds, Warrants,
and
shares underlying the Bonds and Warrants are not registered with
the
Securities and Exchange Commission (the “SEC”), the holder of the Bonds
can require us to redeem the Bonds at 106.09% of their principal
amount.
Also, at any time after November 13, 2010, the holders of the Bonds
can
require us to redeem the Bonds at 126.51% of their principal amount.
We
are required to redeem any outstanding Bonds at 150.87% of its principal
amount on November 13, 2012.
|
Three
months ended September 30,
|
Nine
months ended September 30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||||
Cost
of sales
|
80.1
|
%
|
88.2
|
%
|
84.4
|
%
|
88.4
|
%
|
|||||
Gross
profit
|
19.9
|
%
|
11.8
|
%
|
15.6
|
%
|
11.6
|
%
|
|||||
Other
income - Note 4
|
0.2
|
%
|
0.2
|
%
|
0.2
|
%
|
0.2
|
%
|
|||||
Depreciation
|
0.3
|
%
|
0.4
|
%
|
0.3
|
%
|
0.4
|
%
|
|||||
Administrative
and other operating
expenses,
including stock-based
compensation
|
3.0
|
%
|
1.8
|
%
|
5.1
|
%
|
1.5
|
%
|
|||||
Income
from operations
|
16.8
|
%
|
9.8
|
%
|
10.4
|
%
|
9.9
|
%
|
|||||
Fees
and costs related to reverse merger
|
-
|
-
|
1.1
|
%
|
-
|
||||||||
Other
income - Note 4
|
0.2
|
%
|
0.3
|
%
|
0.2
|
%
|
0.3
|
%
|
|||||
Interest
expenses - Note 5
|
1.4
|
%
|
1.4
|
%
|
1.3
|
%
|
1.2
|
%
|
|||||
Income
before taxes
|
15.6
|
%
|
8.7
|
%
|
8.2
|
%
|
9.0
|
%
|
|||||
Income
taxes - Note 6
|
3.0
|
%
|
1.6
|
%
|
2.2
|
%
|
1.6
|
%
|
|||||
Net
income
|
12.6
|
%
|
7.1
|
%
|
6.0
|
%
|
7.4
|
%
|
31.1
|
Certification
of Principal Executive Officer and Principal Financial and Accounting
Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of
2002
|
32.1
|
Certification
of Principal Executive Officer and Principal Financial and Accounting
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
ASIA
TIME CORPORATION
(Registrant)
|
|
|
|
|
February
8, 2008
|
By:
|
/s/ Kwong
Kai Shun
|
|
Kwong Kai Shun |
|
Chief
Executive Officer, Chief Financial Officer and Chairman of the
Board
|
1 Year Asia Time Corp Chart |
1 Month Asia Time Corp Chart |
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