Attached files
| file | filename |
|---|---|
| EX-31.1 - CERTIFICATION - VelaTel Global Communications, Inc. | chinatel_10ka-ex3101.htm |
| EX-31.2 - CERTIFICATION - VelaTel Global Communications, Inc. | chinatel_10ka-ex3102.htm |
| EX-32.2 - CERTIFICATION - VelaTel Global Communications, Inc. | chinatel_10ka-ex3202.htm |
| EX-32.1 - CERTIFICATION - VelaTel Global Communications, Inc. | chinatel_10ka-ex3201.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-K/A
Amendment
No. 1
(Mark
One)
|
x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the fiscal year ended December 31, 2009
|
|
|
OR
|
|
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
|
For
the transition period from _______ to _______
|
|
Commission
file number 333-134883
CHINA TEL GROUP,
INC.
(Exact
name of registrant as specified in its charter)
|
Nevada
|
98-0489800
|
|
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
12526 High Bluff Drive,
Suite 155, San Diego, California 92130
(Address
of principal executive offices)
1-760-230-8986
(Issuer’s
telephone number)
Securities
registered pursuant to Section 12(g) of the Exchange Act:
Common
Stock, par value $0.001 per share
(Title of
class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. Yes o No x
Indicate
by checkmark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2)has been subject to such filing requirements for the past 90
days. Yes x No o
Indicate
by checkmark if disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K or any amendment to this Form 10-K. o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Yes o No o
Indicate
by checkmark if registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
|
Large
accelerated filer o
|
Accelerated
filer o
|
||
|
Non-accelerated
filer o
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of June 30,
2009 (the Registrant’s most recently completed second fiscal quarter) was
approximately $37,018,847.00.
As of
April 13, 2010, 289,764,577 shares of our Series A Common Stock, par value
$0.001 per share (“Series A Common Stock”) are issued and outstanding, and
66,909,088 shares of our Series B Common Stock, par value $0.001 (“Series B
Common Stock”) are issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
Not
Applicable.
2
EXPLANATORY
NOTE
This
Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) amends the Annual Report on
Form 10-K of China Tel Group, Inc. (the “Company”, “we” or “us”) for the fiscal
year ended December 31, 2009 as originally filed with the Securities and
Exchange Commission (the “SEC”) on April 15, 2010 (the “2009 Annual Report”).
This Amendment No. 1 is being filed to include revised disclosures under “Item
9A - Controls and Procedures” of the 2009 Annual Report.
In
accordance with Rule 12b-12 under the Securities Exchange Act of 1934, as
amended, updated certifications by our chief executive officer and chief
financial officer are filed as exhibits to this Amendment No. 1.
Except as
stated above, this Amendment No. 1 does not amend, update or change the
financial statements or any other items or disclosures contained in the 2009
Annual Report and does not otherwise reflect events occurring after the filing
of the 2009 Annual Report. Accordingly, this Amendment No. 1 should be read in
conjunction with the 2009 Annual Report and our other filings with the
SEC.
ITEM
9A. CONTROLS AND
PROCEDURES
(a) Evaluation of
Disclosure Controls and Procedures
We have
adopted and maintain disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934), as
amended (“Exchange Act”), that are designed to insure that information required
to be disclosed in our reports under the Exchange Act is recorded, processed,
summarized and reported within the time periods required under the SEC’s rules
and forms and that the information is gathered and communicated to our senior
management team, including the Company’s Chief Executive Officer (“CEO”) and
Chief Financial Officer (CFO”), as appropriate, to allow for timely decisions
regarding required disclosure.
The Company’s senior
management team, together with our CEO and CFO, evaluated the effectiveness of
the Company’s disclosure controls and procedures (as defined in Exchange Act
Rule 13a-15(e)) as of the end of the period covered by this
report. As previously disclosed in Item 4.02 of the Company’s Form
8-K filed on April 7, 2010, as described in the Form 10-Q/As for the periods
ended March 31, 2009, June 30, 2009 and September 30, 2009, and as discussed in
Note 16 to our accompanying consolidated financial statements in each of the
Form 10-Q/A’s, we determined that accounting errors were made in connection with
accounting for and disclosing the treatment of our interest in Chinacomm
Cayman. Based on this evaluation, our CEO and CFO concluded that our
disclosure controls and procedures were not effective as of the end of the
period covered by this report.
Management's Report On
Internal Control Over Financial Reporting
Our
senior management team is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act. Our internal control over financial
reporting is designed to
provide reasonable assurance regarding the reliability of
financial reporting and the preparation of
financial statements for external purposes
in accordance with GAAP. Our internal control over
financial reporting includes those policies and procedures that:
|
1.
|
pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of our
assets;
|
|
2.
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP and
that our receipts and expenditures are being made only
in accordance with the authorization of
our senior management team and directors;
and
|
3
|
3.
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial
statements.
|
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect every misstatement. In addition, projections of
their effectiveness in future periods are subject to the risk that controls may
have become inadequate, because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Senior
management assessed the effectiveness of our internal control over our financial
reporting as of December 31, 2009. Based on this assessment, senior
management concluded that the Company did not maintain effective internal
controls over financial reporting as a result of the identified material
weakness in our internal control over financial reporting described
below. In making this assessment, senior management used the
framework set forth in the report entitled Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”). The COSO framework summarizes each of
the components of a company's internal control system, including: (i) the
control environment; (ii) risk assessment; (iii) control activities; (iv)
information and communication; and (v) monitoring.
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting. Senior management's report was not subject to attestation
by our registered public accounting firm pursuant to temporary rules of the SEC
that permitted us to provide only senior management's report in this
report.
Identified Material
Weakness
A
material weakness in our internal control over financial reporting is a control
deficiency, or combination of control deficiencies, that results in more than a
remote likelihood that a material misstatement of the financial statements will
not be prevented or detected.
Senior
management identified the following material weakness during its assessment of
internal controls over financial reporting as of December 31, 2009:
|
●
|
the
Company lacked a sufficient number of personnel with the appropriate level
of experience and technical expertise to resolve, appropriately,
non-routine and complex accounting matters, such as accounting for our
interest in Chinacomm Cayman;
|
|
●
|
there
was no formal guidance or procedures to facilitate the interpretation of
data related to our investment in Chinacomm Cayman and to insure that we
were reporting that interest in accordance with GAAP;
and
|
|
●
|
there
was no formal guidance or procedures to facilitate the interpretation of
data related to our Stock Purchase Agreement with Olotoa Investments, LLC
(“SPA”) and how our interest in Chinacomm Cayman should be recorded in
light of that SPA.
|
Management's Remediation
Initiatives
Subsequent
to the date of the reporting period for this report, the Company has taken
remedial measures to establish effective disclosure controls and procedures and
internal control over financial reporting. These
include implementing accounting requirements, establishing policies and
procedures for the accounting of complex accounting issues, and contracting
with a qualified GAAP consultant who can work with our CFO to identify GAAP
related issues and help evaluate and address such issues before they develop
into reporting issues.
4
In view
of the identified material weaknesses, senior management has changed our
internal controls to: (i) require a dialogue between and among our CEO, our CFO,
our qualified GAAP consultant, our outside SEC counsel and our independent
auditors in every instance in which we are involved in a new type of transaction
to insure that the data associated with that transaction is not misinterpreted
and is properly stated in accordance with GAAP; (ii) require significant
additional substantive review of those areas described above; and (iii) perform
additional analyses, including, but not limited to, a detailed balance sheet and
statement of operations analytical review that compares changes from the prior
period's financial statements and analyzes all significant
differences. These procedures were completed so that our senior
management team could gain assurance that the financial statements and schedules
included in this report fairly present in all material respects the Company's
financial position, results of operations and cash flows for the periods
presented.
(b) Changes
In Internal Control Over Financial Reporting
There was
no change in our internal control over financial reporting during the fiscal
quarter ended December 31, 2009 that has materially affected, or is reasonably
likely to affect materially, our internal control over financial
reporting.
ITEM
15. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
The
exhibits which are filed with this report are set forth in the exhibit index
hereto.
|
EXHIBIT
NO.
|
DESCRIPTION
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
5
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
China
Tel Group, Inc.
|
|||
|
Date: June
28, 2010
|
By:
|
/s/ George
Alvarez
|
|
|
George
Alvarez, Chief Executive Officer
|
|||
6