Quarterly report pursuant to Section 13 or 15(d)


6 Months Ended
Jun. 30, 2012
Notes to Financial Statements  
Note 2. Restatement

The financial statements for the period ended June 30, 2012 are being restated, and the Quarterly Report on Form 10-Q is being amended, to reflect the change to the following previously reported items: long term investment, additional paid in capital, and deficit. The accompanying consolidated financial statements for the quarter ended June 30, 2012 have been restated to reflect those corrections.


Due to the adjustments to restate the 2011 financial statements, the effects of the Company’s previously issued consolidated financial statement as of June 30, 2012 are summarized as follows:


Selected Consolidated Balance Sheet information as of June 30, 2012.








Note 2a

Long-term investment     2,267,252       (2,267,252 )     -  
Total Assets     2,276,189       (2,267,252 )     8,937  
Stockholders’ Equity (Deficiency)                        
Additional Paid in Capital     8,237,826       (2,798,586 )     5,439,240  
Deficit accumulated during the development stage     (4,912,214 )     531,334       (4,380,880 )
Total Stockholders’ Equity (Deficiency)     2,038,732       (2,267,252 )     (228,520 )
Total Liabilities and Stockholders’ Equity (Deficiency)     2,276,189       (2,267,252 )     8,937  


Note 2a


The Company has restated its 2012 and 2011 financial statements to correct an error in the recording of the carrying value of its investment in China Wood Inc. (“China Wood”)


The Company initially recorded the China Wood Shares at its fair value of $5,065,838 at the date of the transaction, and the Company relied upon Viking Nevis’s Guaranty and Repurchase Agreement to determine the value of China Wood shares, in which Viking Nevis, on April 11, 2012, guaranteed that the price per share of the China Wood Shares that it had previously sold to the Company in consideration of the Company issuing Viking Nevis 14,481,420 shares of Company common stock, would not be less than $4.50 per share and agreed to repurchase the China Wood Shares by tendering shares of common stock of the Company owned by Viking Nevis to the Company if the 45-day volume weighted average price (“VWAP”) of the China Wood Shares was equal to or less than US$4.00 per share. Accordingly, the Company valued the China Wood Shares at $4.00/share and an impairment loss of $2,798,586 was recognized in the Company’s previously issued consolidated financial statements for the year ended December 31, 2011.


During the three month period ended June 30, 2013, the Company re-visited the accounting treatment for the above transactions, and determined that the exchange of China Wood shares was a nonmonetary transaction and, therefore, should be accounted under ASC 845, “Nonmonetary Transactions.” The Company further determined that the exchange of shares had no commercial substance due to fact that the Company’s future cash flows were not expected to significantly change as a result of the exchange of shares. Therefore, the Company has recorded the value of the China Wood Shares at their carrying value on the transaction date, and the excess of the fair value of purchase consideration over the assets purchased was charged to additional paid in capital. On December 31, 2011, the China Wood Shares were fully impaired and charged to the income statements.