UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DECEMBER 20, 2006
(Date of Report)
ACL SEMICONDUCTORS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-50140 16-1642709
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
B24-B27,1/F., BLOCK B, PROFICIENT INDUSTRIAL CENTRE,
6 WANG KWUN ROAD, KOWLOON, HONG KONG
(Address of principal executive offices)
011- 852-2799-1996
(Registrant's telephone number, including area code)
(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 obligations of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
THIS FORM 8-K/A FURTHER AMENDS REGISTRANT'S REPORT ON FORM 8-K FILED ON DECEMBER
20, 2006 (THE "DECEMBER 20 FORM 8-K") AS AMENDED BY THAT CERTAIN FORM 8-K/A
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") ON DECEMBER
29, 2006
ITEM 4.01. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
ITEM 4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
By letter dated January 4, 2007 (the "Letter"), Stonefield Josephson,
Inc. ("SJI"), Registrant's former accountants (See the December 20 Form 8-K
reporting Registrant's change in its certifying accountant), responded to the
statements made by Registrant in the December 20 Form 8-K. SJI agrees with the
statements made by the Registrant in the paragraphs numbered (1), (2) and (4) in
response to Item 4.01 as they relate to SJI, with the exceptions set forth
below. The Registrant's response to each of the exceptions is also set forth
below.
(a) With respect to the Registrant's description of the disagreement,
contrary to what was indicated in the December 20 Form 8-K by the Registrant,
SJI has indicated in the Letter that it did not conclude or inform the
Registrant that the financial statements of Classic Electronics Limited
("Classic") should be de-consolidated for the year ending December 31, 2006
since at the time of its dismissal it had not seen any evidence that the cross
guarantees had been removed by the banks.
The Registrant had verbally notified SJI's officer-in-charge that the
Registrant had received letters both from Standard Chartered Bank (Hong Kong)
and The Bank of East Asia Ltd. indicating that they had removed the cross
guarantee. SJI did not request the Registrant to provide such letters and the
Registrant believed that such letters would only affect the period in which such
removal of guarantee became effective, and not prior periods.
(b) SJI has indicated in the Letter that the Registrant did not
previously provide SJI conclusive reasons for the Registrant's disagreement with
the necessity to consolidate the financial statements of Classic as set forth by
the Registrant in paragraph 4 in response to Item 4.01 of the December 20 Form
8-K.
The Registrant discussed with SJI on several occasions its reasoning as
to why Registrant believed it should not be obligated to consolidate its
financial statements with the financial statements of Classic as well as the
applicability of FASB Interpretation No.46 (Revised December 2003),
CONSOLIDATION OF VARIABLE INTEREST ENTITIES ("FIN 46R"). The Registrant and SJI
were not able to reach agreement. The Registrant believes that it had
sufficiently communicated to SJI its reasons for disagreeing with the necessity
of such consolidation.
(c) With respect to the consolidation of the financial statements of
the Registrant and Classic, SJI has indicated in the Letter that the board of
directors of the Registrant did not discuss its views on the inapplicability of
FIN 46R with SJI. All of the Registrant's discussions with SJI related to FIN
46R were conducted by the Registrant's Chief Financial Officer, a member of the
Board of Directors of the Registrant (the "Board").
The Registrant's Chief Financial Officer, who is a member of the Board,
had discussions
with the other members of the Board of Directors of the Registrant about
the inapplicability of FIN 46R. The Registrant's Chief Financial Officer had
several discussions with SJI regarding the inapplicability of FIN 46R and had
notified the other members of the Board about such discussions. The Registrant's
Chief Financial Officer had expressed the views of the Board in his discussions
with SJI regarding the inapplicability of FIN 46R and had kept the Board
apprised of SJI's views in this regard. SJI did not specifically request
discussions with all members of the Board.
(d) In the Letter, SJI has reiterated its views more fully described in
Item 9A-Controls and Procedures in the Registrant's Form 10-K for the year ended
December 31, 2005 and in the Registrant's Form 10-K for the year ended December
31,2004, during SJI's audit of the Registrant's December 31, 2004 financial
statements. Specifically, SJI has referred to: (i) certain transactions that
were incorrectly recorded and certain related party transactions that were not
initially disclosed in the 2004 financial statements, requiring adjustments and
additional disclosures to be made by the Registrant in those financial
statements, and (ii) certain significant deficiencies identified during SJI's
audit of the Registrant's December 31, 2004 financial statements, in the
Registrant's internal control over financial reporting related to (1) the lack
of adequate segregation of duties and management's ability to override any
existing controls, (2) the Registrant's lack of a comprehensive accounting
procedures manual including information as to customized internal control
structure, documentation and transaction flow, and (3) lack of demonstration by
the members of the Registrant's Board of in-depth understanding of generally
accepted accounting principles.
As disclosed in the Form 10-Q's filed subsequently, the Registrant has
adopted many of the formal and informal suggestions of SJI and had been
implementing weekly and monthly checks to assure that disclosure and internal
controls are in place.
ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) None.
(b) None.
(c) Exhibits.
16.1 Letter from Stonefield Josephson, Inc. dated December
19, 2006.*
16.2 Letter from Jeffrey Tsang & Co. dated December 19, 2006
to the Registrant*
16.3 Letter from Jeffrey Tsang & Co. dated December 28, 2006
with respect the Registrant's Form 10-Q/A covering
the interim period ended March 31, 2006.**
16.4 Letter from Jeffrey Tsang & Co. dated December 28,
2006 with respect the Registrant's Form 10-Q/A
covering the interim period ended June 30, 2006.**
16.5 Letter from Stonefield Josephson, Inc. dated January
4, 2007.
* Previously filed as an exhibit to the Registrant's Form 8-K (File No.
000-50140) filed on December 20, 2006.
** Previously filed as an exhibit to the Registrant's Form 8-K/A
(File No. 000-50140) filed on December 29, 2006.
SIGNATURE
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: January 23, 2007
ACL SEMICONDUCTORS INC.
By: /S/ KENNETH LAP-YIN CHAN
------------------------------------
Name: Kenneth Lap-Yin Chan
Title: Chief Financial Officer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
16.1 Letter from Stonefield Josephson, Inc. dated December
19, 2006.*
16.2 Letter from Jeffrey Tsang & Co. dated December 19, 2006
to the Registrant*
16.3 Letter from Jeffrey Tsang & Co. dated December 28, 2006
with respect the Registrant's Form 10-Q/A covering
the interim period ended March 31, 2006.**
16.4 Letter from Jeffrey Tsang & Co. dated December 28, 2006
with respect the Registrant's Form 10-Q/A covering
the interim period ended June 30, 2006.**
16.5 Letter from Stonefield Josephson, Inc. dated January
4, 2007.
* Previously filed as an exhibit to the Registrant's Form 8-K (File No.
000-50140) filed on December 20, 2006.
** Previously filed as an exhibit to the Registrant's Form 8-K/A
(File No. 000-000-50140) filed on December 29, 2006.