China Shenghuo Announces Delay in Filing Form 10-Q for the Fiscal 2008 Second Quarter and Non-Reliance on Previously Issued Financial Statements
This delay is due to a pending internal investigation being conducted bythe Audit Committee of the Board of Directors (the "Audit Committee"), basedon preliminary information received from Hansen Barnett & Maxwell, P.C., theindependent registered public accounting firm of the Company, regarding errorsin the accounting for certain sales representative commission advances andtrade receivables, the Company's internal controls, the Company's personnelinvolved and related matters. The Audit Committee intends to engageindependent counsel to assist in the investigation. The Company currentlyanticipates completing the investigation and addressing any accounting orother corrective action deemed appropriate, including adjustments to itsfiscal periods ended June 30, September 30, and December 30, 2007 and fiscalquarter ended March 31, 2008 results of operations, within the next two months.The Company currently anticipates that, pending conclusion of theinvestigation, the Company will restate its financial statements for itsfiscal periods ended June 30, September 30, and December 30, 2007 and fiscalquarter ended March 31, 2008, and such financial statements, and the auditorsreport on such financial statements, should not be relied upon at this time.
As a result of the Company's failure to timely file its Second Quarter 10-Q, the Company may face potential delisting proceedings by the American StockExchange ("AMEX"). Pursuant to the AMEX Company Guide Rule 1009(b), theCompany anticipates that it will receive a Deficiency Letter from AMEX as aresult of its failure to timely file its Second Quarter 10-Q. The Company canprovide no assurances that it will regain compliance with AMEX's continuedlisting requirements and its failure to do so could result in the delisting ofthe Company's common stock from AMEX.
About China Shenghuo
Founded in 1995, China Shenghuo is a specialty pharmaceutical company thatfocuses on the research, development, manufacture and marketing of Sanchi-based medicinal and pharmaceutical, nutritional supplement and cosmeticproducts. Through its subsidiary, Kunming Shenghuo Pharmaceutical (Group) Co.,Ltd., it owns thirty SFDA (State Food and Drug Administration) approvedmedicines, including the flagship product Xuesaitong Soft Capsules, which hasalready been listed in the Insurance Catalogue. At present, China Shenghuoincorporates a sales network of agencies and representatives throughout China,which markets Sanchi-based traditional Chinese medicine to hospitals and drugstores as prescription and OTC drugs primarily for the treatment ofcardiovascular, cerebrovascular and peptic ulcer disease. The Company alsoexports medicinal products to Asian countries such as Indonesia, Russia andKyrgyzstan. For more information, please visit http://www.shenghuo.com.cn .
This press release may contain certain "forward-looking statements," asdefined in the United States Private Securities Litigation Reform Act of 1995,that involve a number of risks and uncertainties. There can be no assurancethat such statements will prove to be accurate and the actual results andfuture events could differ materially from management's current expectations.Such factors include, but are not limited to, the Company's reliance on onesupplier for Sanchi, ability to develop and market new prod
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