Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported): June 1, 2006
KID
CASTLE EDUCATIONAL CORPORATION
(Exact
Name of Registrant as Specified in Its Charter)
Florida
(State
or
Other Jurisdiction of
Incorporation)
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333-39629
(Commission
File Number)
|
59-2549529
(IRS
Employer Identification
No.)
|
8th
Floor, No. 98 Min Chuan Road, Hsien Tien, Taipei, Taiwan
ROC
(Address
of Principal Executive Offices) (Zip
Code)
(886)
22218 5996
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
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):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM
4.02(A) NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
On
June
1, 2006, the management team of Kid Castle Education Corporation, (the
“Company”) and the Audit Committee of the Board of Directors determined that the
financial statements of the Company for the year ended December 31, 2004 and
interim periods of fiscal years 2005 and 2004 require restatement. Accordingly,
the previously filed consolidated financial
statements for the year ended December 31, 2004 included in the Company’s Annual
Report on Form 10-K for 2004 and the unaudited interim consolidated financial
statements included in the Company’s first and second quarter Quarterly Reports
on Form 10-Q for fiscal 2005 and all Quarterly Reports on Form 10-Q for fiscal
2004 should not be relied upon.
The
decision that a restatement is required arose as a result of management’s
determination
that the financial statements for the fiscal year ended December 31, 2004 and
interim periods in fiscal 2005 did not correctly present cash flows associated
with the effect of unauthorized withdrawals made by the Company’s former Chief
Financial Officer.
Pursuant
to its Form 8-K filed with the SEC on June 23, 2006, the Company reported that
it had determined that during 2004 and 2005, Mr. Chiu appropriated Company
funds
for personal use by approving withdrawals in his former capacity, directing
the
funds to be deposited into his personal or nominated account, and recording
the
withdrawals on the Company’s books as a prepaid stock asset. Typically Mr. Chiu
repaid the amounts withdrawn just prior to the end of the quarterly reporting
periods in 2004 and 2005, the result being that the withdrawn balances did
not
appear on the Company’s balance sheets. Mr. Chiu would then withdraw additional
funds during the next reporting period.
The
Company has been able to establish that during 2004, the highest recorded sum
owed to the Company at any point in time by Mr. Chiu was $328,546. During 2005,
the highest recorded sum owed to the Company at any point in time was $648,115.
(All references to currency in this disclosure have been translated from New
Taiwan dollars to U.S. dollars based on an exchange rate of US$1.00 =
NT$33.42.)
The
circumstances surrounding Mr. Chiu's fund misappropriation and his subsequent
resignation as a CFO are more fully described in our June 23, 2006 Form
8-K.
Due
to
the foregoing, the Company intends to include restated Consolidated Financial
Statements in an amended Annual Report on Form 10-K for 2004 and amended
quarterly reports on From 10-Q for the first, second and third quarters of
2005,
to be filed as soon as practicable. The amended Form 10-K may also include
other
conforming changes to the interim financial statement footnotes.
The
restatement will not affect the consolidated net income on the consolidated
financial statements for fiscal year ended December 31, 2004 and interim periods
in fiscal 2005. However, additional explanatory notes will be filed in the
amended Form 10-K which shall become supplementary notes to the filed
statements.
The
Audit
Committee of the Board of Directors has discussed this matter with the Company’s
former independent registered public accounting firm, PricewaterhouseCoopers
(“PwC”), who had issued an opinion on the Company’s consolidated financial
statements for fiscal years ended December 31, 2004 and December 31, 2003.
We
have
also informed and discussed the events giving rise to the proposed amendments
to
2004 Form 10-K with our former principal accountant Mr. Robert G. Jeffrey.
Mr.
Jeffrey was our principal accountant during the second and third quarters of
2005.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated:
August 4, 2006
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By: |
/s/
Suang - Yi Pai |
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Name:
Suang-Yi Pai |
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Title: Chief
Financial Officer |