UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): December 17, 2010
Commission
file number 000-54072
China
Ginseng Holdings, Inc.
(Exact
name of registrant as specified in its charter)
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Nevada
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20-3348253
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
Number)
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64
Jie Fang Da Road
Ji
Yu Building A, Suite 1208
Changchun City, China
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130022
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone (01186) 43185790039
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––––––––––––––––
Copies
to:
Leser,
Hunter, Taubman & Taubman
17
State Street, Floor 20
New
York, NY 10004
Tel:
212-732-7184
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––––––––––––––––
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 4.02(a). Non-Reliance on Previously
Issued Financial Statements or a Related Audit Report or Completed Interim
Review.
On
December 17, 2010, the Board of Directors of China Ginseng Holdings, Inc. ( the
“Registrant” or the “Company”) concluded that the consolidated financial
statements included in the Registrant’s Registration Statement on Form 10 for
the years ended June 30, 2009 and 2008 and for the nine months ended March 31,
2010 and 2009 (unaudited), should no longer be relied upon due to the lack of
recording of imputed interest on related party loans, the lack of recording of
amounts under subcontracting agreements with farmers to cultivate the Company’s
ginseng crops and an error in the recording of negative goodwill on a previous
acquisition.
Management
and the Board of Directors of the Company discussed this matter with the
Company’s principal accountants and decided to restate the financial statements
for the years ended June 30, 2009 and 2008 and for the nine months ended March
31, 2010 and 2009. The effects of the restatements are presented in the
following table:
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Nine
months ended
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Nine
months ended
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Year
ended
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Year
ended
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|||||||||||||||||||||||||||||
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March
31, 2010
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March
31, 2009
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June
30, 2009
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June
30, 2008
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As
Reported
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As
Restated
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As
Reported
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As
Restated
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As
Reported
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As
Restated
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As
Reported
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As
Restated
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Receivable
from farmers
(2)
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- | $ | 118,249 | - | - | - | $ | 105,110 | - | $ | 52,555 | |||||||||||||||||||||
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Long-term
payable-farmers(2)
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- | 315,330 | - | - | - | 280,293 | - | 140,146 | ||||||||||||||||||||||||
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Property
and equipment,
net(3)
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$ | 1,411,978 | 1,294,696 | - | - | $ | 1,498,529 | 1,381,247 | $ | 1,630,894 | 1,513,612 | |||||||||||||||||||||
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Ginseng
crops, Non-current
portion(2)
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- | 23,370 | - | - | 3,549,575 | 3,601,953 | 3,266,919 | 3,294,856 | ||||||||||||||||||||||||
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Additional
paid-in capital
(1)(2)(3)
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4,243,566 | 4,384,382 | $ | 4,243,566 | $ | 4,436,409 | 4,243,566 | 4,420,548 | 4,243,566 | 4,299,995 | ||||||||||||||||||||||
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Retained
earnings(1)(2)(3)
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(758,347 | ) | (1,016,445 | ) | - | - | (661,796 | ) | (1,078,865 | ) | (722,872 | ) | (956,237 | ) | ||||||||||||||||||
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Cost
of sales(2)
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253,690 | 301,107 | 879,356 | 926,719 | 836,216 | 899,367 | 232,609 | 292,263 | ||||||||||||||||||||||||
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Interest
expense(1)
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(15,361 | ) | (96,289 | ) | (27,478 | ) | (111,865 | ) | (27,231 | ) | (147,784 | ) | (4,701 | ) | (67,517 | ) | ||||||||||||||||
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Net
income (loss)(1), (2)
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(96,551 | ) | (224,896 | ) | 114,069 | (17,681 | ) | 61,076 | (122,628 | ) | (451,353 | ) | (573,823 | ) | ||||||||||||||||||
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Earnings
per share(4)
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- | - | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | - | - | ||||||||||||||||
Notes:
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(1)
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The
Company determined that an imputed interest on loans with related parties
that are non-interest bearing should be recorded as interest expense and a
related capital contribution should
be recorded utilizing the Company’s borrowing rate. The Company
has accordingly computed the interest expense for each of the respective
periods as follows: $120,533 and $62,816 for the years ended
June 30, 2009 and 2008; $80,928 and 84,387 for the nine months ended March
31, 2010 and 2009. As the years prior to June 30, 2008 are not
presented, an amount of $45,640 was reflected as an adjustment to the
opening balance of the Company’s Accumulated
Deficit.
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(2)
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The
Company determined that the agreements it had entered into with the local
farmers for the cultivation of portions of the Company’s land should be
recorded. Accordingly, the Company has recorded the related
receivables and payables due under the agreements and re-assessed its
impairment computation utilizing the lower of cost or market
rules. The nature of these agreements is discussed further in
Note G. The following summarizes increases (decreases)
resulting from these agreements:
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March
31, 2010
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June
30, 2009
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June
30, 2008
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Receivable
from farmers
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$ | 118,249 | $ | 105,110 | $ | 52,555 | ||||||
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Ginseng
crops- non current
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23,370 | 52,378 | 27,937 | |||||||||
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Long
term payables to farmers
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315,330 | 280,293 | 140,146 | |||||||||
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Accumulated
deficit
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(170,222 | ) | (122,805 | ) | (59,654 | ) | ||||||
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Cost
of sales
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47,417 | 63,151 | 59,654 | |||||||||
Additionally,
the Statement of Operations for the nine months ended March 31, 2009 was
restated to reflect an additional impairment of Ginseng Crops of
$47,363.
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(3)
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Upon
the initial acquisition of Yanbian in 2005, the Company recognized
negative goodwill of $ 117,282 as the excess of the fair value of the net
assets of Yanbian over the purchase price. This negative
goodwill resulted from two transactions, the initial acquisition of 55%
and the subsequent acquisition of the remaining 45% of
Yanbian. The Company erroneously recorded the negative goodwill
relating the initial 55% acquisition as income rather than reducing its’
non-current assets, which was property and equipment. The Company also
erroneously recorded the negative goodwill relating to the 45% acquisition
as additional paid in capital. The Company restated its’
financial statements by decreasing its Property and equipment by $117,282,
decreasing its Additional paid-in capital by $52,027 (representing the 45%
acquisition) and decreasing its’ Opening accumulated deficit by $65,255
(representing the 55% acquisition.)
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(4)
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Adjustment
of loss per share. The previously presented amounts were
erroneously rounded from $ (0.00) to $
(0.01).
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In
addition, the Company will file an amended Registration Statement on Form 10 as
a result of the matters described above.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the date indicated.
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China
Ginseng Holdings, Inc.
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Date: February
7, 2011
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By:
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/s/ Liu
Changzhen
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Liu
Changzhen,
Chairman
of the Board
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