x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
90-0370486
|
|
(State or other jurisdiction of incorporation
or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
Class of Securities
|
Shares Outstanding
|
|||
Common Stock, $0.001 par value
|
96,904,467
|
2
|
||
20
|
||
26
|
||
26
|
||
PART II
OTHER INFORMATION
|
||
27
|
||
27
|
||
27
|
||
27
|
||
27
|
||
27
|
||
27
|
FINANCIAL STATEMENTS.
|
Page
|
|
3
|
|
4
|
|
5
|
|
6 – 19
|
Note
|
As of September
30, 2012
|
As of December
31, 2011
|
|||||||
ASSETS
|
|||||||||
Current Assets
|
|||||||||
Cash
|
$
|
49,743
|
$
|
65,623
|
|||||
Accounts receivable, net
|
5
|
56,202
|
146,140
|
||||||
Prepayments for advertising operating rights, net
|
6
|
47,030
|
182,969
|
||||||
Prepaid expenses and other current assets, net
|
7
|
160,350
|
193,424
|
||||||
Deferred charges, net
|
-
|
31,692
|
|||||||
Total Current Assets
|
313,325
|
619,848
|
|||||||
Equipment, Net
|
320,770
|
363,596
|
|||||||
TOTAL ASSETS
|
$
|
634,095
|
$
|
983,444
|
|||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|||||||||
Current Liabilities
|
|||||||||
Accounts payable, accrued expenses and other payables
|
8
|
$
|
2,092,460
|
$
|
1,227,782
|
||||
1% convertible promissory notes due 2012, net
|
9
|
-
|
4,812,080
|
||||||
Capital lease obligation
|
10
|
10,101
|
-
|
||||||
Total Current Liabilities
|
2,102,561
|
6,039,862
|
|||||||
1% convertible promissory notes due 2014, net
|
9
|
1,893,025
|
-
|
||||||
Capital lease obligation, net of current portion
|
10
|
43,650
|
-
|
||||||
Total Non-Current Liabilities
|
1,936,675
|
-
|
|||||||
TOTAL LIABILITIES
|
4,039,236
|
6,039,862
|
|||||||
COMMITMENTS AND CONTINGENCIES
|
11
|
||||||||
STOCKHOLDERS’ DEFICIT
|
|||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized
None issued and outstanding
|
|||||||||
Common stock, $0.001 par value, 400,000,000 shares authorized
Shares issued and outstanding: 96,804,467 and 96,504,467 as of September 30,
2012 and December 31, 2011 respectively
|
96,804
|
96,504
|
|||||||
Additional paid-in capital
|
121,625,423
|
119,835,325
|
|||||||
Accumulated deficit
|
(126,848,864
|
)
|
(126,719,052
|
)
|
|||||
Accumulated other comprehensive income
|
1,721,496
|
1,730,805
|
|||||||
TOTAL STOCKHOLDERS’ DEFICIT
|
12
|
(3,405,141
|
)
|
(5,056,418
|
)
|
||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
634,095
|
$
|
983,444
|
Nine Months Ended
|
||||||||
September 30,
2012
|
September 30,
2011
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(129,812)
|
$
|
(1,697,723)
|
||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization:
|
||||||||
Equipment
|
192,956
|
182,080
|
||||||
Deferred charges and debt discount
|
711,089
|
436,101
|
||||||
Gain on extinguishment of debt
|
(1,877,594)
|
-
|
||||||
Stock-based compensation for service
|
69,540
|
338,243
|
||||||
Loss on disposal of equipment
|
14,258
|
12,598
|
||||||
Gain from write-off of long-aged payables
|
-
|
(3,254)
|
||||||
Loss from sales of available-for-sale securities
|
-
|
228,285
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
89,938
|
295,308
|
||||||
Prepayments for advertising operating rights, net
|
134,217
|
72,317
|
||||||
Prepaid expenses and other current assets, net
|
33,074
|
221,581
|
||||||
Accounts payable, accrued expenses and other payables
|
431,024
|
(229,041)
|
||||||
Net cash used in operating activities
|
(331,310)
|
(143,505)
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of equipment
|
(170,141)
|
(25,402)
|
||||||
Proceeds from sales of equipment
|
3,194
|
-
|
||||||
Proceeds from sales of available-for-sale securities
|
-
|
48,351
|
||||||
Net cash (used in) provided by investing activities
|
(166,947)
|
22,949
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from directors’ loans
|
128,205
|
96,154
|
||||||
Proceeds from short-term loans
|
819,487
|
-
|
||||||
Proceeds from shareholder’s loan
|
-
|
100,000
|
||||||
Proceeds from capital lease financing
|
57,692
|
-
|
||||||
Repayment of directors’ loan
|
(168,910)
|
-
|
||||||
Repayment of short-term loans
|
(345,128)
|
-
|
||||||
Repayment of shareholder’s loan
|
-
|
(100,000)
|
||||||
Repayment of capital lease obligation
|
(3,941)
|
-
|
||||||
Net cash provided by financing activities
|
487,405
|
96,154
|
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(5,028)
|
(10,934)
|
||||||
NET DECREASE IN CASH
|
(15,880)
|
(35,336)
|
||||||
CASH, BEGINNING OF PERIOD
|
65,623
|
170,621
|
||||||
CASH, END OF PERIOD
|
$
|
49,743
|
$
|
135,285
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the period for:
|
||||||||
Income taxes
|
$
|
-
|
$
|
-
|
||||
Interest paid
|
$
|
32,313
|
$
|
24,932
|
NOTE 1.
|
INTERIM FINANCIAL STATEMENTS
|
NOTE 2.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES
|
NOTE 3
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
(A)
|
Basis of Presentation and Preparation
|
Media display equipment
|
5 - 7 years
|
Office equipment
|
3 - 5 years
|
Furniture and fixtures
|
3 - 5 years
|
Motor vehicles
|
5 years
|
Leasehold improvements
|
Over the unexpired lease terms
|
NOTE 4. | SUBSIDIARIES AND VARIABLE INTEREST ENTITY |
Name
|
Place of
Incorporation
|
Ownership/Control
interest
attributable to
the Company
|
Principal activities
|
NCN Group Limited
|
British Virgin
Islands (“BVI”)
|
100%
|
Investment holding
|
NCN Media Services Limited
|
BVI
|
100%
|
Investment holding
|
Linkrich Enterprise Advertising and Investment Limited
|
Hong Kong
|
100%
|
Investment holding
|
Cityhorizon Limited
|
Hong Kong
|
100%
|
Investment holding
|
NCN Group Management Limited
|
Hong Kong
|
100%
|
Provision of administrative and management services
|
Crown Eagle Investments Limited
|
Hong Kong
|
100%
|
Dormant
|
Crown Winner International Limited
|
Hong Kong
|
100%
|
Dormant
|
NCN Huamin Management Consultancy (Beijing) Company Limited
|
PRC
|
100%
|
Dormant
|
Huizhong Lianhe Media Technology Co., Ltd.
|
PRC
|
100%
|
Provision of high-tech services
|
Beijing Huizhong Bona Media Advertising Co., Ltd.
|
PRC
|
100%(1)
|
Provision of advertising services
|
Yi Gao Shanghai Advertising Limited (“Yi Gao”)
|
PRC
|
100%
|
Provision of advertising services
|
NOTE 5.
|
ACCOUNTS RECEIVABLE, NET
|
As of
September 30,
2012
|
As of
December 31,
2011
|
|||||||
Accounts receivable
|
$
|
69,310
|
$
|
159,362
|
||||
Less: allowance for doubtful debts
|
(13,108)
|
(13,222
|
)
|
|||||
Total
|
$
|
56,202
|
$
|
146,140
|
NOTE 6.
|
PREPAYMENTS FOR ADVERTISING OPERATING RIGHTS, NET
|
As of
September 30,
2012
|
As of
December 31,
2011
|
|||||||
Gross carrying amount
|
$
|
1,545,326
|
$
|
914,846
|
||||
Less: accumulated amortization
|
(1,498,296
|
)
|
(731,877
|
)
|
||||
Total
|
$
|
47,030
|
$
|
182,969
|
NOTE 7.
|
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET
|
As of
September 30,
2012
|
As of
December 31,
2011
|
|||||||
Payments from customers withheld by a third party
|
$
|
1,512,729
|
$
|
1,525,966
|
||||
Other receivables
|
333
|
274
|
||||||
Prepaid expenses
|
107,211
|
155,075
|
||||||
Rental deposits
|
54,881
|
40,168
|
||||||
Sub-total
|
1,675,154
|
1,721,483
|
||||||
Less: allowance for doubtful debts
|
(1,514,804)
|
(1,528,059
|
)
|
|||||
Total
|
$
|
160,350
|
$
|
193,424
|
NOTE 8.
|
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER PAYABLES
|
As of
September 30,
2012
|
As of
December 31,
2011
|
|||||||
Accrued advertising operating rights fees
|
$
|
32,660
|
$
|
-
|
||||
Accrued staff benefit and related fees
|
747,322
|
410,254
|
||||||
Accrued professional fees
|
78,254
|
115,615
|
||||||
Directors’ loans (Note 13)
|
189,039
|
229,744
|
||||||
Short-term loans (1,2,3&4)
|
474,359
|
-
|
||||||
Accrued interest expenses
|
63,702
|
12,603
|
||||||
Other accrued expenses
|
401,142
|
328,040
|
||||||
Other payables
|
105,982
|
131,526
|
||||||
Total
|
$
|
2,092,460
|
$
|
1,227,782
|
NOTE 9.
|
CONVERTIBLE PROMISSORY NOTES AND WARRANTS
|
As of
September 30,
2012
|
As of
December 31,
2011
|
|||||||
Gross carrying value
|
$
|
5,000,000
|
$
|
5,000,000
|
||||
Less: Allocated intrinsic value of beneficial conversion feature
|
(3,598,452)
|
(1,447,745
|
)
|
|||||
Add: Accumulated amortization of debt discount
|
491,477
|
1,259,825
|
||||||
1,893,025
|
4,812,080
|
|||||||
Less: Current portion
|
-
|
(4,812,080
|
)
|
|||||
Non-current portion
|
$
|
1,893,025
|
$
|
-
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
2012
|
September 30,
2011
|
September 30,
2012
|
September 30,
2011
|
|||||||||||||
Conversion Features
|
$
|
265,730
|
$
|
128,910
|
$
|
679,397
|
$
|
375,248
|
||||||||
Deferred Charges
|
-
|
20,310
|
31,692
|
60,853
|
||||||||||||
Total
|
$
|
265,730
|
$
|
149,220
|
$
|
711,089
|
$
|
436,101
|
NOTE 10.
|
CAPITAL LEASE OBLIGATION
|
Fiscal years ending December 31,
|
||||
2012
|
$
|
3,462
|
||
2013
|
13,846
|
|||
2014
|
13,846
|
|||
2015
|
13,846
|
|||
2016
|
13,846
|
|||
2017
|
4,615
|
|||
Total minimum lease payments
|
63,461
|
|||
Less: Amount representing interest
|
(9,710)
|
|||
Present value of net minimum lease payment
|
53,751
|
|||
Less: Current portion
|
(10,101)
|
|||
Non-current portion
|
$
|
43,650
|
NOTE 11.
|
COMMITMENTS AND CONTINGENCIES
|
Three months ending December 31, 2012
|
$
|
48,632
|
||
Fiscal years ending December 31,
|
||||
2012
|
48,632
|
|||
2013
|
146,696
|
|||
2014
|
131,476
|
|||
Thereafter
|
-
|
|||
Total
|
$
|
326,804
|
Three months ending December 31, 2012
|
$
|
479,035
|
||
Fiscal years ending December 31,
|
||||
2012
|
479,035
|
|||
2013
|
544,146
|
|||
Thereafter
|
-
|
|||
Total
|
$
|
1,023,181
|
NOTE 12.
|
STOCKHOLDERS’ DEFICIT
|
NOTE 13.
|
RELATED PARTY TRANSACTIONS
|
NOTE 14.
|
NET LOSS PER COMMON SHARE
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
2012
|
September 30,
2011
|
September 30,
2012
|
September 30,
2011
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net loss
|
$
|
(664,759)
|
$
|
(420,990
|
)
|
$
|
(129,812)
|
$
|
(1,697,723
|
)
|
||||||
Denominator
:
|
||||||||||||||||
Weighted average number of shares outstanding, basic
|
97,020,771
|
84,504,467
|
96,768,572
|
84,504,467
|
||||||||||||
Effect of dilutive securities
|
-
|
-
|
-
|
-
|
||||||||||||
Options and warrants
|
-
|
-
|
-
|
-
|
||||||||||||
Weighted average number of shares outstanding,
diluted
|
97,020,771
|
84,504,467
|
96,768,572
|
84,504,467
|
||||||||||||
Net loss per common share – basic and diluted
|
$
|
(0.007)
|
$
|
(0.005
|
)
|
$
|
(0.001)
|
$
|
(0.020
|
)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
2012
|
September 30,
2011
|
September 30,
2012
|
September 30,
2011
|
|||||||||||||
Potential common equivalent shares:
|
||||||||||||||||
Stock warrants for services*
|
-
|
-
|
-
|
-
|
||||||||||||
Conversion feature associated with convertible promissory notes to common stock
|
53,740,327
|
-
|
53,740,327
|
42,992,261
|
||||||||||||
Common stock to be granted to consultants for services (including non-vested shares)
|
20,000
|
20,000
|
20,000
|
20,000
|
||||||||||||
Stock options granted to Keywin
|
12,129,946
|
-
|
12,517,332
|
10,448,078
|
||||||||||||
Total
|
65,890,273
|
20,000
|
66,277,659
|
53,460,339
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
·
|
the rising costs to acquire advertising rights due to competition among bidders for those rights;
|
·
|
slower than expected consumer acceptance of the digital form of advertising media;
|
·
|
strong competition from other media companies; and
|
·
|
many customers continued to be cost-conscious in their advertising budget especially on our new digital form of media.
|
Nine Months Ended
|
||||||||
September 30,
2012
|
September 30,
2011
|
|||||||
Net cash used in operating activities
|
$
|
(331,310
|
)
|
$
|
(143,505)
|
|||
Net cash (used in) provided by investing activities
|
(166,947
|
)
|
22,949
|
|||||
Net cash provided by financing activities
|
487,405
|
96,154
|
||||||
Effect of exchange rate changes on cash
|
(5,028
|
)
|
(10,934)
|
|||||
Net decrease in cash
|
(15,880
|
)
|
(35,336)
|
|||||
Cash, beginning of period
|
65,623
|
170,621
|
||||||
Cash, end of period
|
$
|
49,743
|
$
|
135,285
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
2012
|
September 30,
2011
|
September 30,
2012
|
September 30,
2011
|
|||||||||||||
Payment for prepayments for advertising operating rights
|
$
|
47,031
|
$
|
242,747
|
$
|
609,359
|
$
|
460,723
|
||||||||
Amortization of prepayments for advertising operating rights
|
279,722
|
$
|
180,136
|
$
|
776,236
|
$
|
533,040
|
As of
September 30,
2012
|
As of
December 31,
2011
|
|||||||
Prepayments for advertising operating rights, net
|
$ |
47,030
|
$ |
182,969
|
||||
Accrued advertising operating rights fees
|
$
|
32,660
|
$ |
-
|
Payments due by period
|
||||||||||||||||||||
Total
|
Due in 2012
|
Due in 2013-
2014
|
Due in 2015-
2016
|
Thereafter
|
||||||||||||||||
Debt Obligations (a)
|
$
|
5,000,000
|
$
|
-
|
$
|
5,000,000
|
$
|
-
|
$
|
-
|
||||||||||
Operating Lease Obligations (b)
|
326,804
|
48,632
|
278,172
|
-
|
-
|
|||||||||||||||
Advertising Operating Rights Fee Obligations (c)
|
1,023,181
|
479,035
|
544,146
|
-
|
-
|
|||||||||||||||
Purchase Obligations (d)
|
$
|
19,000
|
$
|
19,000
|
$
|
-
|
$
|
-
|
$
|
-
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
CONTROLS AND PROCEDURES.
|
LEGAL PROCEEDINGS.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
DEFAULTS UPON SENIOR SECURITIES.
|
MINE SAFETY DISCLOSURES
.
|
OTHER INFORMATION.
|
EXHIBITS.
|
Exhibit No.
|
Description
|
|
10.1
|
1% Senior Unsecured Convertible Notes
|
|
31.1
|
Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101 *
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Financial statements and footnotes of Network CN Inc. for the fiscal quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T (furnished herewith)
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Date: November 14, 2012
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NETWORK CN INC.
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By:
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/s/ Earnest Leung
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Earnest Leung, Chief Executive Officer
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(
Principal Executive Officer
)
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By:
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/s/ Shirley Cheng
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Shirley Cheng , Interim Chief Financial Officer
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(
Principal Financial Officer and Principal
Accounting Officer
)
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If to the Holder:
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5 Harbourmaster Place, IFSC
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If to the Company:
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Network CN Inc.
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NETWORK CN INC.
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By:
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Name:
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Earnest Leung
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Title:
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Chief Executive Officer
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Conversion calculation:
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Date to Effect Conversion:
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Number of shares of Common Stock to be issued:
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Shares of Common Stock to be issued in the name of:
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[Insert name of Holder or its assignee]
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HOLDER:
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(Print Name of Holder)
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By:
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Name:
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Title:
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If to the Holder:
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5 Harbourmaster Place, IFSC
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If to the Company:
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Network CN Inc.
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NETWORK CN INC.
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By:
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Name:
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Earnest Leung
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Title:
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Chief Executive Officer
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Conversion calculation:
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Date to Effect Conversion:
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Number of shares of Common Stock to be issued:
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Shares of Common Stock to be issued in the name of:
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[Insert name of Holder or its assignee]
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HOLDER:
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(Print Name of Holder)
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By:
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Name:
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Title:
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$646,000
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April 2, 2012
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If to the Holder:
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5 Harbourmaster Place, IFSC
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If to the Company:
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Network CN Inc.
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Conversion calculation:
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||
Date to Effect Conversion:
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Number of shares of Common Stock to be issued:
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Shares of Common Stock to be issued in the name of:
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[Insert name of Holder or its assignee]
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HOLDER:
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(Print Name of Holder)
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By:
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Name:
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Title:
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1.
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I have reviewed this quarterly report on Form 10-Q of Network CN Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Earnest Leung
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Earnest Leung
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Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Network CN Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Shirley Cheng
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Shirley Cheng
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Interim Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
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/s/ Earnest Leung
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Earnest Leung
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Chief Executive Officer
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(Principal Executive Officer)
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