ZHUHAI, China &
NEW YORK, May 14 /PRNewswire-Asia-FirstCall/ -- China
Architectural Engineering, Inc. ("CAE" or the "Company") (Nasdaq:
CAEI), a leader in the design, engineering, fabrication and
installation of high-end building envelope systems, today filed a
Form 8-K and an amendment to its Annual Report on Forms 10-K/A with
the U.S. Securities and Exchange Commission (the "SEC") to, among
other things, correct the timing of expense charges related to the
Company's outstanding $8,000,000
Variable Rate Convertible Bonds due 2012 and $20,000,000 12% Convertible Bonds due 2011.
The errors resulted in overstatements and understatements of the
interest expenses related to the bonds during various quarters
before the second quarter of 2008. Due to the accounting errors,
the interest expense was overstated by approximately $0.3 million, $0.5
million, and $0.7 million for
the second, third, and fourth quarters of fiscal year 2007,
respectively, for a total overstatement of approximately
$1.5 million for fiscal 2007. The
interest expense was overstated by approximately $0.1 million in the first quarter of 2008 and all
the overstatements, approximately $1.6
million, were reversed in the second quarter of 2008.
In addition, the Form 10-K contained an accounting error that
consisted of $1.5 million of
consolidation exchange loss resulting from the intercompany
investments elimination was incorrectly included in the additional
paid in capital instead of the accumulated comprehensive income
presented in the Stockholders' Statement of Equity and
Comprehensive Income for the year ended December 31, 2009. All the errors for the year
ended December 31, 2009 occurred
among the components of the shareholders' equity that the total
shareholders' equity was presented correctly as of December 31, 2009 as in the Form 10-K. For
additional information of the accounting errors, please see the
Company's Form 8-K and amended Form 10-K/A filed with the
Securities and Exchange Commission.
Mr. Ken Yi Luo, the Company's
Chief Executive Officer and Chairman, commented, "It is our strong
commitment to optimize the communication with our shareholders and
maintain a strong control environment. We are confident that with
our ongoing effort to improve the effectiveness of our disclosure
controls and procedures, we will continually strive to enhance our
internal control over financial reporting and transparency in the
future."
About China Architectural Engineering
China Architectural Engineering, Inc. (NASDAQ: CAEI) is a leader
in the design, engineering, fabrication and installation of
high-end curtain wall systems, roofing systems, steel construction
systems, and eco-energy systems. Founded in 1992, CAEI has provided
timely, high-quality, reliable, fully integrated, and
cost-effective solutions. Collaborating with world-renowned
architects and building engineers, the Company has successfully
completed over one hundred large, complex and unique projects
worldwide, including numerous award-winning landmarks across
Asia's major cities.
For further information on China Architectural Engineering,
Inc., please visit http://www.caebuilding.com
Forward-Looking Statements
In addition to historical information, the statements set forth
above may include forward-looking statements that may involve risk
and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Actual
results could differ materially from the expectations contained in
forward-looking statements as a result of risks and uncertainties,
including, but not limited to, identification and remediation of
the Company's deficiencies and weaknesses in its internal controls
over financial reporting, potential claims or litigation that may
result from the occurrence of restatements, the negotiation and
execution of a definitive acquisition agreement for the proposed
acquisition of ConnGame and satisfactory completion of related due
diligence and closing conditions, including but not limited to
regulatory approvals; required Company payments under the waiver
agreement and ability to obtain an extension; difficulties related
to integration and management of the combined operations; reduction
or reversal of the Company's recorded revenue or profits due to
"percentage of completion" method of accounting and expenses; the
Company's ability to obtain a modification for the Waiver agreement
with the bondholders applicable to the proposed acquisition of
ConnGame; increasing provisions for bad debt related to the
Company's accounts receivable; fluctuation and unpredictability of
costs related to our products and services; the Company's plans to
enter into real estate development projects such as the Nine
Dragons Project; adverse capital and credit market conditions;
fluctuation and unpredictability of costs related to the Company's
products and services; expenses and costs associated with its
convertible bonds, regulatory approval requirements and competitive
conditions. These and other factors that may result in differences
are discussed in greater detail in the Company's reports and other
filings with the Securities and Exchange Commission.
For more information, please contact:
Investor Contact:
ICR:
Michael Tieu
Tel: +86-10-6599-7960
Email: michael.tieu@icrinc.com
Bill Zima
Tel: +1-203-682-8200
Email: bill.zima@icrinc.com
SOURCE China Architectural Engineering, Inc.