Unassociated Document

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): December 13, 2007

ASIA TIME CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-51981	20-4062619
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

Room 1601-1604, 16/F., CRE Centre 889 Cheung Sha Wan Road, Kowloon, Hong Kong	N/A
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code:	(852)-23100101

(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:

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. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On December 13, 2007, the management and Board of Directors of Asia Time Corporation, a Delaware corporation (the “Company”) concluded that the Company’s previously issued financial statements

(i)

as of and for the three months ended March 31, 2007, as included in the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “Commission”) on May 21, 2007, as amended by Amendment No. 1 to the Quarterly Report on Form 10-Q/A filed with the Commission on September 26, 2007 (the “March 31, 2007 Form 10-Q”);

(ii)

as of and for the three months and six months ended June 30, 2007, as included in the Quarterly Report on Form 10-Q filed with the Commission on August 20, 2007 (the “June 30, 2007 Form 10-Q”);

(iii)

as of and for the three months and nine months ended September 30, 2007, as included in the Quarterly Report on Form 10-Q filed with the Commission on November 19, 2007 (the “September 30, 2007 Form 10-Q); and

(iv)

as of and for the years ended December 31, 2006, 2005, and 2004, as included in the Annual Report on Form 10-K filed with the Commission on April 17, 2007, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A filed with the Commission on September 26, 2007 (the “Form 10-K” and collectively with the March 31, 2007 Form 10-Q, June 30, 2007 Form 10-Q, and September 30, 2007 Form 10-Q, the “Reports”)

should no longer be relied upon as a result of the Company’s determination that it misapplied accounting principles generally accepted in the United States of America in relation the accounting for inventory by adjusting watch movement costing for the effects of vendor incentives from an as received basis to an accrual basis, as the Company was able to estimate the value of the incentives as inventory is purchased (the “Restatement”). The Reports will also be amended restate average shares outstanding and actual shares outstanding to correct the accounting for the reverse merger transaction in January 2007. As a result of these corrections, various income tax calculations were also revised, which effected net income and also caused reclassifications to cash flows.

The Company’s Board of Directors and management conducted a review of the Company’s accounting treatment of the matters relating to the Restatement with assistance from outside financial consultants, and during this process, management reviewed the facts and circumstances and concluded that it misapplied accounting principles generally accepted in the United States of America. As discussed above, the result of the discussions and analysis lead to the conclusion that the Company would need to correct errors with respect to the accounting for inventory by adjusting watch movement costing for the effects of vendor incentives from an as received basis to an accrual basis, as the Company was able to estimate the value of the incentives as inventory is purchased. The Board of Directors and authorized officers of the Company discussed this matter and conclusion with the Company's independent public accounting firm (Dominic K. F. Chan & Co.) and it was concluded that the Company's previously issued financial statements described above could not be relied upon and needed to be restated.

The Company has completed the Restatements with respect to the financial statements as previously issued in the September 30, 2007 Form 10-Q and the Form 10-K. Information regarding the effect of the Restatement for the periods covered by these two reports in presented below. The Company continues to work to complete the Restatement with respect to the March 31, 2007 Form 10-Q and the June 30, 2007 Form 10-Q, which the Company expects to complete prior to December 31, 2007.

Statement of Operations

Nine months ended September 30, 2007 (Unaudited)

	*2007*		*2007*		*2007*
	*(As originally* *reported)*		*(restated)*		*(Effect of* *adjustments)*
	$		$		$
Net sales	64,960,224		64,960,224		-
Cost of sales	(54,644,056	)	(54,829,393	)	(185,337	)

Gross profit	10,316,168		10,130,831		(185,337	)
Other income	145,203		145,203		-
Depreciation	(193,499	)	(193,499	)	-
Administrative and other operating expenses	(1,443,283	)	(1,443,283	)	-

Income from operations	8,824,589		8,639,252		(185,337	)
Fees and costs related to reverse merger	(736,197	)	(736,197	)	-
Other income	117,936		117,936		-
Interest expenses	(830,935	)	(830,935	)	-

Income before taxes	7,375,393		7,190,056		(185,337	)
Income taxes	(1,512,523	)	(1,414,608	)	97,915

Net income	5,862,870		5,775,448		(87,422	)

Earnings per share of common stock
- Basic	0.26		0.25		(0.01	)
- Diluted	0.24		0.23		(0.01	)

Weighted average number of common shares
- Basic	22,844,721		22,844,721		-
- Diluted	24,874,262		24,874,262		-

Statement of Operations

Nine months ended September 30, 2006 (Unaudited)

	*2006*			*2006*			*2006*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*
	$			$			$
Net sales		62,874,395			62,874,395			-
Cost of sales		(56,510,946	)		(55,599,295	)		911,651

Gross profit		6,363,449			7,275,100			911,651
Other income		125,504			125,504			-
Depreciation		(243,096	)		(243,096	)		-
Administrative and other operating expenses		(971,717	)		(971,717	)		-

Income from operations		5,274,140			6,185,791			911,651
Fees and costs related to reverse merger		-			-			-
Other income		165,638			165,638			-
Interest expenses		(763,726	)		(763,726	)		-

Income before taxes		4,676,052			5,587,703			911,651
Income taxes		(829,593	)		(989,132			(159,539	)

Net income		3,846,459			4,598,571			752,112

Earnings per share of common stock
- Basic and Diluted		0.20			0.24			0.04

Weighted average number of shares of common stock
- Basic and Diluted		19,454,420			19,454,420			-

Statement of Operations

Three months ended September 30, 2007 (Unaudited)

	*2007*			*2007*			*2007*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*
	$			$			$
Net sales		22,972,645			22,972,645			-
Cost of sales		(18,099,186	)		(18,410,524	)		(311,338	)

Gross profit		4,873,459			4,562,121			(311,338	)
Other income		48,425			48,425			-
Depreciation		(64,635	)		(64,635	)		-
Administrative and other operating expenses		(490,225	)		(490,225	)		-

Income from operations		4,367,024			4,055,686			(311,338	)
Fees and costs related to reverse merger		-			-			-
Other income		39,555			39,555			-
Interest expenses		(316,516	)		(316,516	)		-

Income before taxes		4,090,063			3,778,725			(311,338	)
Income taxes		(752,221	)		(697,737	)		54,484

Net income		3,337,842			3,080,988			(256,854	)

Earnings per share of common stock
- Basic		0.14			0.13			(0.01	)
- Diluted		0.13			0.12			(0.01	)

Weighted average number of common stock
- Basic		23,156,629			23,156,629			-
- Diluted		25,406,977			25,406,977			-

Statement of Operations

Three months ended September 30, 2006 (Unaudited)

	*2006*			*2006*			*2006*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*
	$			$			$
Net sales		19,647,209			19,647,209			-
Cost of sales		(16,730,052	)		(17,332,702	)		(602,650	)

Gross profit		2,917,157			2,314,507			(602,650	)
Other income		41,724			41,724			-
Depreciation		(83,730	)		(83,730	)		-
Administrative and other operating expenses		(359,472	)		(359,472	)		-

Income from operations		2,515,679			1,913,029			(602,650	)
Fees and costs related to reverse merger		-			-			-
Other income		55,342			55,342			-
Interest expenses		(265,872	)		(265,872	)		-

Income before taxes		2,305,149			1,702,499			(602,650	)
Income taxes		(410,284	)		(304,821	)		105,463

Net income		1,894,865			1,397,678			(497,187	)

Earnings per share of common stock
- Basic and diluted		0.10			0.07			(0.03	)

Weighted average number of shares of common stock
- Basic and diluted		19,454,420			19,454,420			-

Consolidated Balance Sheet

September 30, 2007 (Unaudited)

	*2007*		*2007*		*2007*
	*(As originally*		*(restated)*		*(Effect of*
	*reported*)				*adjustments*)
	$		$		$
ASSETS
Current Assets:
Cash and cash equivalents		166,216		166,216		-
Restricted cash		5,551,704		5,551,704		-
Accounts receivable, net		15,482,635		15,482,635		-
Prepaid expenses and other receivables		6,397,568		6,397,568		-
Income tax prepayments		-		-		-
Inventories, net		6,520,527		5,961,014		(559,513	)
Prepaid lease payments		17,193		17,193		-

Total Current Assets		34,135,843		33,576,330		(559,513	)
Deferred tax assets		19,536		19,536		-
Plant and equipment, net		719,473		719,473		-
Leasehold lands		882,444		882,444		-
Held-to-maturity investments		300,771		300,771		-
Intangible assets		244,168		244,168		-
Restricted cash - non current		256,937		256,937		-

TOTAL ASSETS		36,559,172		35,999,659		(559,513	)

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Current Liabilities:
Accounts payable		1,075,980		1,075,980		-
Other payables and accrued liabilities		51,491		51,491		-
Advance from a related party		12,268		12,268		-
Income taxes payable		2,854,788		2,691,393		(163,395	)
Bank borrowings		15,196,458		15,196,458		-

Total Current Liabilities		19,190,985		19,027,590		(163,395	)
Deferred tax liabilities		37,180		37,180		-

TOTAL LIABILITIES		19,228,165		19,064,770		(163,395	)

COMMITMENTS AND CONTINGENCIES

Consolidated Balance Sheet (Cont’d)

September 30, 2007 (Unaudited)

	*2007*		*2007*		*2007*
	*(As originally*		*(restated)*		*(Effect of*
	*reported*)				*adjustments*)
	$		$		$
STOCKHOLDERS’ EQUITY
Preferred stock
Par value: US$0.0001
Authorized: 10,000,000 shares
Issued and outstanding: 2007 - 2,250,348 shares		225		225		-

Common stock
Par value: US$0.0001
Authorized: 100,000,000 shares
Issued and outstanding: 2007 - 23,156,629 shares		2,316		2,316		-
Additional paid-in capital		3,287,386		3,287,386		-
Accumulated other comprehensive income		22,112		22,112		-
Retained earnings		14,018,968		13,622,850		(396,118	)

TOTAL STOCKHOLDERS’ EQUITY		17,331,007		16,934,889		(396,118	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		36,559,172		35,999,659		(559,513	)

Statements of Cash Flows

Nine months ended September 30, 2007 (Unaudited)

	*2007*			*2007*			*2007*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*Adjustments)*

Cash flows from operating activities
Net income		5,862,870			5,775,448			(87,422	)
Adjustments to reconcile net income to net cash flows
used in operating activities:
Amortization of intangible assets		92,884			92,884			-
Amortization of leasehold lands		17,287			17,287			-
Depreciation		193,499			193,499			-
Dividend income		-			-			-
Loss on disposal of plant and equipment		5,406			5,406			-
Income taxes		1,512,523			1,414,608			(97,915	)

Changes in operating assets and liabilities:
Accounts receivable		(7,281,110	)		(7,281,110	)		-
Prepaid expenses and other receivables		(4,260,214	)		(4,260,214	)		-
I Inventories		90,180			275,517			185,337
Accounts payable		306,241			306,241			-
Other payables and accrued liabilities		(138,142	)		(138,142	)		-
Income taxes payable		(112,601	)		(112,601	)		-

Net cash used in operating activities		(3,711,177	)		(3,711,177	)		-

Cash flows from investing activities
Acquisition of plant and equipment		(30,257	)		(30,257	)		-
Proceeds from disposal of plant and equipment		320			320			-

Net cash used in investing activities		(29,937	)		(29,937	)		-

Cash flows from financing activities
Proceeds from issuance of Series A convertible preferred stock		2,641,683			2,641,683			-
Proceeds from new short-term bank borrowings		2,816,620			2,816,620			-
Repayment of short-term bank borrowings		(4,029,839	)		(4,029,839	)		-
Net advance under short term bank borrowings		3,175,698			3,175,698			-
Increase in restricted cash		(1,031,003	)		(1,031,003	)		-
Advances to related parties		(20,773	)		(20,773	)		-
Decrease in bank overdrafts		40,840			40,840			-
Dividends paid		-			-			-

Net cash flows provided by financing activities		3,593,226			3,593,226			-

Net decrease in cash and cash equivalents		(147,888	)		(147,888	)		-
Effect of foreign currency translation on cash and cash equivalents		(2,517	)		(2,517	)		-
Cash and cash equivalents - beginning of period		316,621			316,621			-

Cash and cash equivalents - end of period		166,216			166,216			-

Statement of Cash Flows

Nine months ended September 30, 2006 (Unaudited)

	*2006*			*2006*			*2006*
	*(As originally*						*(Effect of*
	*reported)*			*(restated)*			*adjustments)*
	$			$			$
Cash flows from operating activities
Net income		3,846,459			4,598,571			752,112
Adjustments to reconcile net income to net cash flows
provided by operating activities:
Amortization of intangible assets		115,965			115,965			-
Amortization of leasehold lands		17,481			17,481			-
Depreciation		243,096			243,096			-
Dividend income		(4,486	)		(4,486	)		-
Loss on disposal of plant and equipment		7,725			7,725			-
Income taxes		829,593			989,132			159,539

Changes in operating assets and liabilities:
(Increase) in Accounts receivable		(3,264,603	)		(3,264,603	)		-
Prepaid expenses and other receivables		(1,118,481	)		(1,118,481	)		-
Increase in Inventories		1,679,040			767,389			(911,651	)
Accounts payable		(279,202	)		(279,202	)		-
Other payables and accrued liabilities		(37,981	)		(37,981	)		-
Income taxes payable		(16,055	)		(16,055	)		-
Unearned revenue		(1,595,187	)		(1,595,187	)		-

Net cash provided by operating activities		423,364			423,364			-

Cash flows from investing activities
Acquisition of plant and equipment		(1,164,095	)		(1,164,095	)		-
Proceeds from disposal of plant and equipment		2,034			2,034			-
Dividend received		4,486			4,486			-

Net cash used in investing activities		(1,157,575	)		(1,157,575	)		-

Cash flows from financing activities
Proceeds from issuance of Series A convertible preferred stock		-			-			-
Proceeds from new short-term bank borrowings		33,932			33,932			-
Repayment of short-term bank borrowings		(259,532	)		(259,532	)		-
Net advance under short term bank borrowings		3,925,836			3,925,836			-
Increase in restricted cash		(1,180,479	)		(1,180,479	)		-
Advances to related parties		(28,798	)		(28,798	)		-
Decrease in bank overdrafts		131,057			131,057			-
Dividends paid		(2,445,712	)		(2,445,712	)		-

Net cash flows provided by financing activities		176,304			176,304			-

Net decrease in cash and cash equivalents		(557,907	)		(557,907	)		-
Effect of foreign currency translation on cash and cash equivalents		(538	)		(538	)		-
Cash and cash equivalents - beginning of period		778,563			778,563			-

Cash and cash equivalents - end of period		220,118			220,118			-

Statement of Operations

Year ended December 31, 2006

	*2006*			*2006*			*2006*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*

Net sales	$	81,134,275		$	81,134,275		$	-
Cost of sales		(71,393,755	)		(71,496,801	)		(103,046	)

Gross profit		9,740,520			9,637,474			(103,046	)
Other income		424,016			424,016			-
Depreciation		(325,995	)		(325,995	)		-
Administrative and other operating expenses		(1,284,863	)		(1,284,863	)		-

Income from operations		8,553,678			8,450,632			(103,046	)
Other income		237,571			237,571			-
Interest expenses		(1,060,536	)		(1,060,536	)		-

Income before taxes		7,730,713			7,627,667			(103,046	)
Income taxes		(1,325,761	)		(1,307,728	)		18,033

Net income		6,404,952			6,319,939			(85,013	)

Earnings per share of common stock
- Basic and diluted		0.28			0.32			0.04

Weighted average number of shares of common stock
- Basic and diluted		23,156,629			19,454,420			(3,702,209	)

Statement of Operations

Year ended December 31, 2005

	*2005*			*2005*			*2005*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*

Net sales	$	63,078,409		$	63,078,409		$	-
Cost of sales		(56,813,199	)		(57,026,036	)		(212,837	)

Gross profit		6,265,210			6,052,373			(212,837	)
Other income		938,573			938,573			-
Depreciation		(259,127	)		(259,127	)		-
Administrative and other operating expenses		(1,436,069	)		(1,436,069	)		-

Income from operations		5,508,587			5,295,750			(212,837	)
Other income		156,199			156,199			-
Interest expenses		(514,637	)		(514,637	)		-

Income before taxes		5,150,149			4,937,312			(212,837	)
Income taxes		(948,933	)		(911,687	)		37,246

Net income		4,201,216			4,025,625			(175,591	)

Earnings per share of common stock
- Basic and diluted		0.18			0.21			0.03

Weighted average number of shares of common stock
- Basic and diluted		23,156,629			19,454,420			(3,702,209	)

Statement of Operations

Year ended December 31, 2004

	*2004*			*2004*			*2004*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*

Net sales	$	36,553,084		$	36,553,084		$	-
Cost of sales		(34,584,844	)		(34,608,653	)		(23,809	)

Gross profit		1,968,240			1,944,431			(23,809	)
Other income		-			-			-
Depreciation		(126,225	)		(126,225	)		-
Administrative and other operating expenses		(1,344,786	)		(1,344,786	)		-

Income from operations		497,229			473,420			(23,809	)
Other income		28,047			28,047			-
Interest expenses		(164,558	)		(164,558	)		-

Income before taxes		360,718			336,909			(23,809	)
Income taxes		(136,117	)		(131,951	)		4,166

Net income		224,601			204,958			(19,643	)

Earnings per share of common stock
- Basic and diluted		0.01			0.01			-

Weighted average number of shares of common stock
- Basic and diluted		23,156,629			19,454,420			(3,702,209	)

Consolidated Balance Sheet

December 31, 2006

	*2006*		*2006*		*2006*
	*(As originally*		*(restated)*		*(Effect of*
	*reported)*				*adjustments)*
	$		$		$
ASSETS
Current Assets:
Cash and cash equivalents		316,621		316,621		-
Restricted cash		4,523,679		4,523,679		-
Accounts receivable		8,188,985		8,188,985		-
Prepaid expenses and other receivables		2,101,133		2,101,133		-
Tax prepayment		767		767		-
Inventories, net		6,620,361		6,246,185		(374,176	)
Prepaid lease payments		22,958		22,958		-

Total Current Assets		21,774,504		21,400,328		(374,176	)
Deferred tax assets		14,042		14,042		-
Plant and equipment, net		890,258		890,258		-
Leasehold lands		895,322		895,322		-
Held-to-maturity investments		301,196		301,196		-
Intangible assets		337,836		337,836		-
Restricted cash		257,301		257,301		-

TOTAL ASSETS		24,470,459		24,096,283		(374,176	)

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Current Liabilities:
Accounts payable		770,360		770,360		-
Other payables and accrued liabilities		190,358		190,358		-
Advance from a related party		-		-		-
Income taxes payable		1,453,051		1,387,571		(65,480	)
Unearned revenue		-		-		-
Bank borrowings		13,205,167		13,205,167		-

Total Current Liabilities		15,618,936		15,553,456		(65,480	)
Deferred tax liabilities		31,711		31,711		-

TOTAL LIABILITIES		15,650,647		15,585,167		(65,480	)

COMMITMENTS AND CONTINGENCIES

Consolidated Balance Sheet (Cont’d)

December 31, 2006

	*2006*		*2006*		*2006*
	*(As originally*		*(restated)*		*(Effect of*
	*reported)*				*adjustments)*
	$		$		$
STOCKHOLDERS’ EQUITY
Preferred stock
Par value: 2006 - US$0.0001
Authorized: 2006 - 10,000,000 shares
Issued and outstanding: 2006 - none issued		-		-		-

Common stock
Par value: 2006 - US$0.0001
Authorized: 2006 - 100,000,000 shares
Issued and outstanding: 2006 - 19,454,420 shares		2,316		1,946		(370	)
Additional paid-in capital		653,928		654,298		370
Accumulated other comprehensive income		7,470		7,470		-
Retained earnings		8,156,098		7,847,402		(308,696	)

TOTAL STOCKHOLDERS’ EQUITY		8,819,812		8,511,116		(308,696	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		24,470,459		24,096,283		(374,176	)

Consolidated Balance Sheet

December 31, 2005

	*2005*		*2005*		*2005*
	*(As originally*		*(restated)*		*(Effect of*
	*reported)*				*adjustments)*
	$		$		$
ASSETS
Current Assets:
Cash and cash equivalents		780,090		780,090		-
Restricted cash		4,306,474		4,306,474		-
Accounts receivable		4,829,586		4,829,586		-
Prepaid expenses and other receivables		394,236		394,236		-
Tax prepayment		16,367		16,367		-
Inventories, net		6,584,792		6,313,662		(271,130	)
Prepaid lease payments		7,993		7,993		-

Total Current Assets		16,919,538		16,648,408		(271,130	)
Deferred tax assets		-		-		-
Plant and equipment, net		682,901		682,901		-
Leasehold lands		315,939		315,939		-
Held-to-maturity investments		301,954		301,954		-
Intangible assets		584,149		584,149		-
Restricted cash		-		-		-

TOTAL ASSETS		18,804,481		18,533,351		(271,130	)

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Current Liabilities:
Accounts payable		1,236,418		1,236,418		-
Other payables and accrued liabilities		145,249		145,249		-
Advance from a related party		28,854		28,854		-
Income taxes payable		864,205		816,758		(47,447	)
Unearned revenue		1,598,314		1,598,314		-
Bank borrowings		10,064,129		10,064,129		-

Total Current Liabilities		13,937,169		13,889,722		(47,447	)
Deferred tax liabilities		-		-		-

TOTAL LIABILITIES		13,937,169		13,889,722		(47,447	)

COMMITMENTS AND CONTINGENCIES

Consolidated Balance Sheet (Cont’d)

December 31, 2005

	*2005*		*2005*		*2005*
	*(As originally*		*(restated)*		*(Effect of*
	*reported)*				*adjustments)*
	$		$		$
STOCKHOLDERS’ EQUITY
Preferred stock
Par value: 2005 - none
Authorized: 2005 - none
Issued and outstanding: 2005 - none issued		-		-		-

Common stock
Par value: 2005 - US$0.0001
Authorized: 2005 - 100,000,000 shares
Issued and outstanding: 2005 - 19,454,420 shares		2,316		1,946		(370	)
Additional paid-in capital		653,928		654,298		370
Accumulated other comprehensive income		13,549		13,549		-
Retained earnings		4,197,519		3,973,836		(223,683	)

TOTAL STOCKHOLDERS’ EQUITY		4,867,312		4,643,629		(223,683	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		18,804,481		18,533,351		(271,130	)

Consolidated Balance Sheet

December 31, 2004

	*2004*		*2004*		*2004*
	*(As originally*		*(restated)*		*(Effect of*
	*reported)*				*adjustments)*
	$		$		$
ASSETS
Current Assets:
Cash and cash equivalents		911,487		911,487		-
Restricted cash		3,551,304		3,551,304		-
Accounts receivable		3,369,326		3,369,326		-
Prepaid expenses and other receivables		727,934		727,934		-
Tax prepayment		-		-		-
Inventories, net		3,931,124		3,872,831		(58,293	)
Prepaid lease payments		-		-		-

Total Current Assets		12,491,175		12,432,882		(58,293	)
Deferred tax assets		-		-		-
Plant and equipment, net		696,552		696,552		-
Leasehold lands		-		-		-
Held-to-maturity investments		-		-		-
Intangible assets		736,934		736,934		-
Restricted cash		-		-		-

TOTAL ASSETS		13,924,661		13,866,368		(58,293	)

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Current Liabilities:
Accounts payable		1,805,995		1,805,995		-
Other payables and accrued liabilities		41,798		41,798		-
Advance from a related party		89,296		89,296		-
Income taxes payable		95,640		85,439		(10,201	)
Unearned revenue		3,197,160		3,197,160		-
Bank borrowings		7,400,775		7,400,775		-

Total Current Liabilities		12,630,664		12,620,463		(10,201	)
Deferred tax liabilities		-		-		-

TOTAL LIABILITIES		12,630,664		12,620,463		(10,201	)

COMMITMENTS AND CONTINGENCIES

Consolidated Balance Sheet (Cont’d)

December 31, 2004

	*2004*		*2004*		*2004*
	*(As originally*		*(restated)*		*(Effect of*
	*reported)*				*adjustments)*
	$		$		$
STOCKHOLDERS’ EQUITY
Preferred stock
Par value: 2004 - none
Authorized: 2004 - none
Issued and outstanding: 2004 - none issued		-		-		-

Common stock
Par value: 2004 - US$0.0001
Authorized: 2004 - 100,000,000 shares
Issued and outstanding: 2004 - 19,454,420 shares		2,316		1,946		(370	)
Additional paid-in capital		652,118		652,488		370
Accumulated other comprehensive income		412		412		-
Retained earnings		639,151		591,059		(48,092	)

TOTAL STOCKHOLDERS’ EQUITY		1,293,997		1,245,905		(48,092	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		13,924,661		13,866,368		(58,293	)

Statement of Cash Flows

Year ended December 31, 2006

	*2006*			*2006*			*2006*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*

Cash flows from operating activities
Net income	$	6,404,952		$	6,319,939			(85,013	)
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of intangible assets		154,436			154,436			-
Amortization of leasehold lands		23,247			23,247			-
Depreciation		325,995			325,995			-
Loss on disposal of plant and equipment		7,715			7,715			-
Gain on disposal of intangible assets		(210,594	)		(210,594	)		-
Income taxes		1,325,761			1,307,728			(18,033	)

Changes in operating assets and liabilities:
Accounts receivable		(3,369,347	)		(3,369,347	)		-
Prepaid expenses and other receivables		(1,706,789	)		(1,706,789	)		-
Inventories		(52,056	)		50,990			103,046
Accounts payable		(462,658	)		(462,658	)		-
Other payables and accrued liabilities		45,445			45,445			-
Income taxes payable		(701,921	)		(701,921	)		-
Unearned revenue		(1,593,280	)		(1,593,280	)		-

Net cash flows provided by operating activities		190,906			190,906			-

Cash flows from investing activities
Acquisition of leasehold lands		(618,025	)		(618,025	)		-
Acquisition of plant and equipment		(544,678	)		(544,678	)		-
Proceeds from disposal of plant and equipment		2,031			2,031			-
Proceeds from disposal of intangible assets		300,849			300,849			-

Net cash flows used in investing activities		(859,823	)		(859,823	)		-

Cash flows from financing activities
Proceeds from new short-term bank loans		1,700,622			1,700,622			-
Repayment of short-term bank loans		(525,535	)		(525,535	)		-
Repayment of a capital lease		-			-			-
Net advancement of other bank borrowings		1,789,269			1,789,269			-
Increase in restricted cash		(484,997	)		(484,997	)		-
Increase in bank overdrafts		199,893			199,893			-
Advance from a related party		(28,763	)		(28,763	)		-
Dividends paid		(2,446,373	)		(2,446,373	)		-

Net cash flows provided by financing activities		204,116			204,116			-

Net decrease in cash and cash equivalents		(464,801	)		(464,801	)		-
Effect of foreign currency translation on cash and cash equivalents		1,332			1,332			-
Cash and cash equivalents - beginning of year		780,090			780,090			-

Cash and cash equivalents - end of year		316,621			316,621			-

Statement of Cash Flows

Year ended December 31, 2005

	*2005*			*2005*			*2005*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*

Cash flows from operating activities
Net income	$	4,201,216			4,025,625			(175,591	)
Adjustments to reconcile net income to net cash
used in operating activities:
Amortization of intangible assets		154,438			154,438			-
Amortization of leasehold lands		7,968			7,968			-
Depreciation		259,127			259,127			-
Loss on disposal of plant and equipment		-			-			-
Gain on disposal of intangible assets		-			-			-
Income taxes		948,933			911,687			(37,246	)

Changes in operating assets and liabilities:
Accounts receivable		(1,445,937	)		(1,445,937	)		-
Prepaid expenses and other receivables		334,759			334,759			-
Inventories		(2,633,977	)		(2,421,140	)		212,837
Accounts payable		(573,017	)		(573,017	)		-
Other payables and accrued liabilities		103,007			103,007			-
Income taxes payable		(199,079	)		(199,079	)		-
Unearned revenue		(1,603,082	)		(1,603,082	)		-

Net cash flows used in operating activities		(445,644	)		(445,644	)		-

Cash flows from investing activities
Acquisition of leasehold lands		(330,884	)		(330,884	)		-
Acquisition of held-to-maturity investments		(301,007	)		(301,007	)		-
Acquisition of intangible assets		-			-			-
Acquisition of plant and equipment		(243,504	)		(243,504	)		-
Proceeds from disposal of plant and equipment		-			-			-
Proceeds from disposal of intangible assets		-			-			-

Net cash flows used in investing activities		(875,395	)		(875,395	)		-

Statement of Cash Flows

Year ended December 31, 2005

	*2005*			*2005*			*2005*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*

Cash flows from financing activities
Proceeds from new short-term bank loans		346,622			346,622			-
Repayment of short-term bank loans		(408,211	)		(408,211	)		-
Repayment of a capital lease		-			-			-
Net advancement of other bank borrowings		2,946,182			2,946,182			-
Increase in restricted cash		(755,170	)		(755,170	)		-
Increase in bank overdrafts		(250,997	)		(250,997	)		-
Advance from a related party		(60,511	)		(60,511	)		-
Dividends paid		(642,848	)		(642,848	)		-

Net cash flows provided by financing activities		1,175,067			1,175,067			-

Net decrease in cash and cash equivalents		(145,972	)		(145,972	)		-
Effect of foreign currency translation on cash and cash equivalents		14,575			14,575			-

Cash and cash equivalents - beginning of year		911,487			911,487			-

Cash and cash equivalents - end of year		780,090			780,090			-

Statement of Cash Flows

Year ended December 31, 2004

	*2004*			*2004*			*2004*
	*(As originally*			*(restated)*			*(Effect of*
	*reported)*						*adjustments)*

Cash flows from operating activities
Net income	$	224,601			204,958			(19,643	)
Adjustments to reconcile net income to net cash
used in operating activities:
Amortization of intangible assets		35,382			35,382			-
Amortization of leasehold lands		-			-			-
Depreciation		126,225			126,225			-
Loss on disposal of plant and equipment		-			-			-
Gain on disposal of intangible assets		-			-			-
Income taxes		136,117			131,951			(4,166	)

Changes in operating assets and liabilities:
Accounts receivable		(1,997,310	)		(1,997,310	)		-
Prepaid expenses and other receivables		310			310			-
Inventories		(2,601,377	)		(2,577,568	)		23,809
Accounts payable		538,433			538,433			-
Other payables and accrued liabilities		370			370			-
Income taxes payable		(76,747	)		(76,747	)		-
Unearned revenue		3,191,721			3,191,721			-

Net cash flows used in operating activities		(422,275	)		(422,275	)		-

Cash flows from investing activities
Acquisition of leasehold lands		-			-			-
Acquisition of held-to-maturity investments		-			-			-
Acquisition of intangible assets		(771,063	)		(771,063	)		-
Acquisition of plant and equipment		(781,095	)		(781,095	)		-
Proceeds from disposal of plant and equipment		-			-			-
Proceeds from disposal of intangible assets		-			-			-

Net cash flows used in investing activities		(1,552,158	)		(1,552,158	)		-

Cash flows from financing activities
Proceeds from new short-term bank loans		140,937			140,937			-
Repayment of short-term bank loans		(11,527	)		(11,527	)		-
Repayment of a capital lease		(6,975	)		(6,975	)		-
Net advancement of other bank borrowings		4,176,477			4,176,477			-
Increase in restricted cash		(2,255,598	)		(2,255,598	)		-
Decrease in bank overdrafts		599,814			599,814			-
Advance from a related party		122,571			122,571			-
Dividends paid		-			-			-

Net cash flows provided by financing activities		2,765,699			2,765,699			-

Statement of Cash Flows

Year ended December 31, 2004 (Con’t)

	*2004*		*2004*		*2004*
	*(As originally*		*(restated)*		*(Effect of*
	*reported)*				*adjustments)*

Net increase in cash and cash equivalents	$	791,266	$	791,266	$	-
Effect of foreign currency translation on cash and cash equivalents		7,242		7,242		-
Cash and cash equivalents - beginning of year		112,979		112,979		-

Cash and cash equivalents - end of year		911,487		911,487		-

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.

Date: December 19, 2007	ASIA TIME CORPORATION


	By:	/s/ Kwong Kai Shun
	Name	Kwong Kai Shun
	Title:	Chief Executive Officer, Chief Financial Officer and Chairman of the Board