SOKO FITNESS & SPA GROUP, INC. - FORM 8-K - November 18, 2009
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported) November 18, 2009 (November
14, 2009)
SOKO
FITNESS & SPA GROUP, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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333-132429
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80-0122921
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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No.
194,Guogeli Street, Harbin,
Heilongjiang
Province, China
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150001
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: 011-86-451-87702255
Not
Applicable
(Former
name or former address, if changed since last report)
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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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o
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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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o
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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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On
November 14, 2009, the Audit Committee of the Board of Directors (the “Audit Committee”) of SOKO
Fitness & Spa Group, Inc. (the “Company”), after consultation
with Company management and the Company’s independent registered public
accounting firm, Bagell, Josephs, Levine & Company, LLC, determined that the
following previously filed financial statements of the Company should not be
relied upon:
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●
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The
Company’s audited consolidated financial statements for the fiscal year
ended May 31, 2009 contained in the Company’s Annual Report on Form 10-K
for the fiscal year ended May 31, 2009, filed originally on August 31,
2009;
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●
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The
Company’s audited consolidated financial statements for the fiscal year
ended May 31, 2008 contained in the Company’s Annual Report on Form 10-K
for the fiscal year ended May 31, 2008, filed originally on August 29,
2008 and as previously restated on February 17, 2009 and July 30,
2009;
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●
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The
Company’s unaudited financial statement for the three-month period ended
August 31, 2009 contained in the Company’s Quarterly Reports on Form 10-Q,
filed originally on October 15,
2009;
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●
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The
Company’s unaudited financial statement for the nine-month period ended
February 28, 2009 contained in the Company’s Quarterly Reports on Form
10-Q, as amended, originally filed on April 14, 2009 and as previously
restated on July 30, 2009;
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●
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The
Company’s unaudited financial statement for the six-month period ended
November 30, 2008 contained in the Company’s Quarterly Reports on Form
10-Q, as amended, originally filed on January 14, 2009 and as previously
restated on February 17, 2009; and
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●
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The
Company’s unaudited financial statement for the three-month period ended
August 31, 2008 contained in the Company’s Quarterly Reports on Form 10-Q,
as amended, originally filed on October 14, 2008 and as previously
restated on February 17, 2009.
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The
Company’s determination that the aforementioned financial statements should not
be relied upon resulted from an evaluation of written
comments (the “SEC Comment Letters”) made by
the staff of the United States Securities and Exchange Commission (the “SEC”) in connection with the
SEC’s review of the Company’s pending Registration Statement on Form S-1 (File
No. 333-151563) and the SEC’s review of the Company’s financial statements
contained therein. As indicated above, the Company has previously
restated certain of the aforementioned financial statements as a result of SEC
comments.
1
After
discussion, review and analysis of the accounting and disclosures and the
contents of the latest SEC Comments Letters, the Company determined that the
following adjustments to the aforementioned financial statements were
appropriate:
Adjustments
for Fiscal Years Ended May 31, 2009 and 2008
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●
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The
Company will revise Note 9 “Goodwill” to the financial statements for the
fiscal years ended May 31, 2009 and 2008 to include the factors that lead
to the recognition of goodwill in the premium paid for the acquisition of
a majority interest in the Company’s 51% owned subsidiary, Yoga Wave, the
acquisition of Harbin Tai Ai and a disclosure of the pro-forma information
as required by paragraph 54 of SFAS
141.
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●
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The
Company will revise Note 14 “Stock Options” of the financial statements
for the fiscal years ended May 31, 2009 and 2008 to disclose that the
total compensation cost for stock option arrangements to its three
independent directors amounted to $48,621 for the year ended May 31, 2009
and the unvested stock options are expected to be expensed for an
aggregate amount of $61,277 over a weighted average period of 2.29
years.
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●
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The
Company will revise its consolidated financial statements for the fiscal
years ended May 31, 2009 and May 31, 2008 to properly disclose the fair
value of common shares and warrants of the Company issued in the Company’s
April 2008 private placement.
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●
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The
Company will revise the financial statements and the disclosure regarding
“Corporate History” appearing in the Form 10-K for fiscal year ended May
31, 2009 to make them consistent with the financial statements and the
disclosure regarding “Corporate History” included in the amendment to the
Company’s pending Registration Statement on Form S-1, as
amended.
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Adjustments
for Fiscal Year Ended May 31, 2008 and 2007
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●
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The
Company has historically described the nature of its share exchange
transaction with American Business Holdings, Inc. (the former shell
company), which occurred in April 2008, in an incomplete
manner. The Company will restate Note 1 to its financial
statements to make clarifications and corrections as necessary to more
clearly reflect the various aspects of the
transaction.
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●
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The
net income attributable to the Company that appeared in the first table in
Note 19 and other parts of the consolidated financial statements for the
fiscal year ended May 31, 2008 was erroneously calculated and reported as
$5,175,930, and the restated amount shall be $4,702,980. The
Company will also revise its related narrative disclosure to reflect the
restated amounts.
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●
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The
Company will revise its consolidated financial statements for the fiscal
years ended May 31, 2008 and May 31, 2007 to disclose that the Company
issued 510,000 shares of Company common stock (with a fair value of
$321,300) to Luck Eagle Limited for acting as a placement agent for the
Company’s private placement on April 11,
2008.
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2
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●
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The
Company will revise its consolidated financial statements for the fiscal
years ended May 31, 2008 and May 31, 2007 to make sufficient disclosure to
reflect retrospective presentation and disclosure provisions of SFAS 160
and revising the tables in Note 18 to such financial statements
accordingly.
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The
Company will, as soon as is practicable, make these adjustments by filing with
the SEC amendments to:
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●
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The
Company’s Annual Report on Form 10-K/A for the fiscal year ended May 31,
2009 (which will include revised quarterly financial statements for the
quarters ended February 28, 2009, November 30, 2008 and August 31,
2008);
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●
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The
Company’s Annual Report on Form 10-K/A for the fiscal year ended May 31,
2008;
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The
Company’s Quarterly Report on Form 10-Q/A for the period ended August 31,
2009; and
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●
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The
Company’s Quarterly Report on Form 10-Q for the period ended February 29,
2009,
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which, in
each case, will include restated consolidated financial statements and notes
thereto, and other appropriate revisions to reflect the foregoing.
The
Company’s management and the Audit Committee are assessing the effect of the
pending restatements on its internal control over financial reporting and its
disclosure controls and procedures and will not reach a final conclusion until
completion of the restatement process.
The
Company’s management and the Audit Committee discussed with Bagell Josephs,
Levine & Company, LLC the matters disclosed in this filing under
4.02(a).
Cautionary
Note on Forward Look Statements
This
Current Report on Form 8-K and the exhibits hereto and the statements of
representatives and partners of SOKO Fitness & Spa Group, Inc. (the “Company”) related thereto
contain or may contain, among other things, certain forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve significant risks and uncertainties. Such
statements may include, without limitation, statements with respect to the
Company’s plans, objectives, projections, expectations and intentions and other
statements identified by words such as “projects”, “may”, “could”, “would”,
“should”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans”
or similar expressions. These statements are based upon the current beliefs and
expectations of the Company’s management and are subject to significant risks
and uncertainties, including those detailed in the Company’s filings with the
Securities and Exchange Commission. Actual results, including, without
limitation, those relating to the Company’s financial statement remediation
efforts, may differ significantly from those set forth in the forward-looking
statements. These forward-looking statements involve certain risks and
uncertainties that are subject to change based on various factors (many of which
are beyond the Company’s control).
# # #
3
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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SOKO
FITNESS & SPA GROUP, INC.
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Dated:
November 18, 2009
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By:
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/s/
Tong Liu
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Name:Tong
Liu
Title: Chairman
and Chief Executive Officer
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