swwh_10q-093009.htm

United States

Securities and Exchange Commission

Washington, DC 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-52116

SOUND WORLDWIDE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-5153419
(State or other jurisdiction of incorporation)		(IRS Employer File Number)


Unit 1, 14/F, Leader Industrial Centre Nos. 57-59 Au Pui Wan Street, Shatin, N.T. Hong Kong, China		N/A
(Address of principal executive offices)		(zip code)

(852) 2414-1831

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No þ

APPLICABLE ONLY TO CORPORATE ISSUERS

As of September 30, 2009, 14,696,250 shares of our common stock were outstanding.

PART 1—FINANCIAL INFORMATION

Item 1. Financial Statements.

SOUND WORLDWIDE HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(Stated in US Dollars)

		At of
		September 30,		March 31,
		2009		2009
	Notes	$			$
ASSETS

Current assets:
Cash and cash equivalents			9,508		7,989
Accounts receivable, net of allowance for doubtful accounts	3		1,837,024		1,538,779
Prepaid expenses and other receivables			2,855		422
Inventories	4		-		137,260

Total current assets			1,849,387		1,684,450

Property and equipment, net	5		1,756,287		1,891,844

TOTAL ASSETS			3,605,674		3,576,294

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Current liabilities:
Accounts payable			365,769		43,178
Bank and other borrowings			-		340,066
Accrued expenses and other liabilities			181,068		204,506

Total current liabilities			546,837		587,750

TOTAL LIABILITIES			546,837		587,750

Commitments and contingencies

Stockholder’s equity:
Common stock (US$0.0001 par value - authorized 20,000,000 shares; issued and outstanding 14,696,250 shares in September 30, 2009 and 14,336,250 shares in March 31, 2009)			1,470		1,434
Additional paid-in capital			738,252		645,726
Retained earnings			2,296,746		2,321,202
Accumulated other comprehensive income incinc(loss)/income			22,369		20,182

Total stockholders’ equity			3,058,837		2,988,544

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			3,605,674		3,576,294

See accompanying notes to unaudited condensed consolidated financial statements.

SOUND WORLDWIDE HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Stated in US Dollars)

	Three months ended September 30						Six months ended September 30
	2009			2008			2009			2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$				$

Net sales		1,211,355			2,121,906			2,174,546			4,070,550
Cost of sales		(1,158,469	)		(1,834,072	)		(1,987,084	)		(3,674,981	)

Gross profit		52,886			287,834			187,462			395,569
Selling, general and administrative expenses, including shared based payment		(71,296	)		(119,788	)		(180,631	)		(227,275	)
Other income		-			6			-			48

Income from operations		(18,410	)		168,052			6,831			168,342
Loss on disposal of a subsidiary		-			-			-			(276,041	)
Interest expenses		(5,721	)		(3,248	)		(31,287	)		(12,039	)

Income / (loss) before taxes		(24,131	)		164,804			(24,456	)		(119,738	)
Income taxes expenses		-			(1,793	)		-			(1,793	)

Net income / (loss)		(24,131	)		163,011			(24,456	)		(121,531	)

Earnings / (loss) per common share, basic and diluted	(0.16) cents			1.17 cents			(0.17) cents			(0.87) cents

Weighted average number of common shares outstanding, basic and diluted		14,652,337			13,975,380			14,511,113			13,955,922

See accompanying notes to unaudited condensed consolidated financial statements.

SOUND WORLDWIDE HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME

(Stated in US Dollars)

							Accumulated
					Additional		other
	Common stock				paid-in		Comprehensive		Retained
	Shares		Amount		capital		income		earnings			Total
			$		$		$		$			$

Balance, April 1, 2009		14,336,250		1,434		645,726		20,182		2,321,202			2,988,544
Issue of shares		360,000		36		92,526		-		-			92,562
Net loss		-		-		-		-		(24,456	)		(24,456	)
Foreign currency translation adjustments		-		-		-		2,187		-			2,187
Comprehensive income		-		36		92,526		2,187		(24,456	)		70,293
Balance, September 30, 2009		14,696,250		1,470		738,252		22,369		2,296,746			3,058,837

See accompanying notes to unaudited condensed consolidated financial statements.

SOUND WORLDWIDE HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Stated in US Dollars)

	Six months ended September 30,
	2009			2008
	$			$

Cash flows from operating activities:
Net loss		(24,456	)		(121,531	)
Adjustments to reconcile net income to
Net cash provided by operating activities:
Depreciation expense		136,028			71,635
Share based compensation		66,761			-
Changes in current assets and liabilities
Accounts receivable		(297,809	)		859,356
Prepaid expenses and other receivables		8,634			100,643
Inventories		137,278			903,363
Accounts payable		322,538			(554,260	)
Income tax payable		-			15,378
Accrued expenses and other liabilities		(8,733	)		(169,386	)

Net cash provided by operating activities		340,241			1,105,198

Cash flows from investing activities:
Purchases of property and equipment		-			(389,134	)

Net cash used in investing activities		-			(389,134	)

Cash flow from financing activities:
New bank borrowings		-			673,716
Repayment of bank borrowings		(340,110	)		(1,525,160	)

Net cash used in financing activities		(340,110	)		(851,444	)

Effect of exchange rate changes on cash and cash equivalents		1,388			1,138

Net (increase)/decrease in cash and cash equivalents		1,519			(134,242	)
Cash and cash equivalents at beginning of the period		7,989			288,356

Cash and cash equivalents at end of the period		9,508			154,114

Supplementary disclosures of cash flow information:
Interest paid		31,287			12,039

Income taxes paid		-			1,793

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

1.	Organization and nature of operations

Sound Worldwide Holdings, Inc. (the “Company”) and its subsidiaries (together, the “Group”) are principally engaged in manufacturing and trading of denim fabrics and garments. The Group owns production plants in Hong Kong and the People’s Republic of China (“PRC”) and its customers are mainly in the United States, Europe and Japan.

On October 25, 2007, Freedom 3, Inc. a Delaware corporation (“Freedom 3”), sold one share of its common stock to Sound Worldwide Limited (“Sound Worldwide” or “SWL”) for $1.00 and redeemed 100,000 shares of its common stock from its prior sole stockholder constituting 100% of Freedom 3’s issued and outstanding shares of its common stock prior to the sale, resulting in Sound Worldwide owning 100% of Freedom 3. After the sale and redemption by Freedom 3, Sound Worldwide and Freedom 3 entered into a Share Exchange Agreement, dated October 25, 2007, or Exchange Agreement, pursuant to which each issued and outstanding share of Sound Worldwide’s common stock and preferred stock was converted into 350 shares of Freedom 3’s common stock and preferred stock, respectively, and all of the issued and outstanding shares of Sound Worldwide’s common and preferred stock were retired and cancelled, resulting in Freedom 3 owning 100% of Sound Worldwide (the “Exchange”). This resulted in the stockholders of Sound Worldwide to become stockholders of Freedom 3. The previous stockholder of Freedom was then issued 300,000 shares of Freedom 3 as agreed previously. The one share of Freedom’s common stock held by Sound Worldwide was then cancelled and Sound Worldwide sold one share of its common stock to Freedom 3, which resulted in Freedom 3 owning 100% of Sound Worldwide. Freedom 3 then changed its name to Sound Worldwide Holdings, Inc.

For accounting purposes, the Exchange has been treated as an acquisition of Freedom 3 by Sound Worldwide and as a recapitalization of Sound Worldwide (i.e. a “reverse acquisition”), in which Sound Worldwide was deemed to be the accounting acquirer. As a result of the Exchange, the historical consolidated financial statements of the Company for periods prior to the date of the transaction are those of Sound Worldwide, as the accounting acquirer, and all references to the consolidated financial statements of the Company apply to the historical financial statements of Sound Worldwide prior to the transaction and the consolidated financial statements of the Company subsequent to the transaction. The Company’s shares have been restated retroactively to reflect the share exchange ratio as at the date of the transaction in a manner similar to a stock split.

On May 27, 2008, the Company and SWL, entered into a Share Purchase and Exchange Agreement (the “Exchange Agreement”) with Best Allied, a wholly-owned subsidiary of SWL, and Ms. Ivy S.K. Lam, a director and officer of Best Allied and a stockholder of an aggregate of 6,063,750 shares of the Company’s Common Stock. Pursuant to the Exchange Agreement, at a closing held on May 30, 2008, Ms. Lam purchased from the Company and SWL 10,000 shares of Common Stock of Best Allied owned by SWL, which constituted 100% of the issued and outstanding shares of Best Allied, in exchange for 6,063,750 shares of the Company’s Common Stock held by Ms. Lam, which constituted 100% of the shares of the Company’s Common Stock held by Ms. Lam (the “Exchange”). The effective date of the Exchange is April 1, 2008.

Pursuant to the agreement, Ms. Lam had agreed to the return and cancellation of 6,063,750 shares of our common stock held by her.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

1.	Organization and nature of operations (Continued)

As of September 30, 2009, the subsidiaries of the Company include the following:

Name of company	Place and date of incorporation	Attributable equity interest held	Principal activities

Sound Worldwide	BVI	100%	Investment holding
Limited (“SWL”)	July, 28th, 1999

Asian Point	BVI	100%	Manufacturing and trading of
Investment Limited	March 26th, 1997		denim fabrics
(“Asian Point”)

2.	Summary of principal accounting policies

Basis of presentation and consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America.

The consolidated financial statements include the accounts of Sound Worldwide Holdings, Inc. and its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.

The results of subsidiaries acquired or disposed of during the years are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal.

The Company also evaluates consolidation of entities under Financial Accounting Standards Board (FASB) Interpretation No.46, “Consolidation of Variable Interest Entities” (FIN 46). FIN 46 requires management to evaluate whether an entity or interest is a variable interest entity and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The Company does not have any variable interest entities requiring consolidation.

On June 29, 2009, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (Codification) as the single source of authoritative U.S. generally accepted accounting principles (GAAP) for all nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) are also sources of authoritative U.S. GAAP for SEC registrants. The Codification does not change U.S. GAAP but takes previously issued FASB standards and other U.S. GAAP authoritative pronouncements, changes the way the standards are referred to, and includes them in specific topic areas. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of the Codification did not have any impact on the Company’s financial statements.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

2.	Summary of principal accounting policies (continued)

Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, deferred income taxes and the estimation on useful lives of plant and equipment. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with original maturities of three months or less at the date of acquisition. These investments are carried at cost, which approximates market value.

Trade accounts receivable

Accounts receivable are stated at original amount less allowance made for doubtful receivables, if any, based on a review of all outstanding amounts at the year end. An allowance is also made when there is objective evidence that the Group will not be able to collect all amounts due according to original terms of receivables. Bad debts are written off when identified. The Group extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The Group does not accrue interest on trade accounts receivable.

Inventory

Inventories, which primarily consist of yarns, denim fabrics, garments and other textile materials and products, are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Write down of potentially obsolete or slow-moving inventory is recorded based on management’s assumptions about future demand and market conditions.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

2.	Summary of principal accounting policies (Continued)

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation of property and equipment is calculated on a straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:-

	Office unit	5 years
	Machinery Furniture and office equipment Motor vehicles	5-10 years 5 years 5 years

Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Impairment of long-lived assets

In accordance with FASB Accounting Standard Codification Topic 360 (ASC 360) “Property, Plant and Equipment – Overall” (Formerly known as SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets ), long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposal group classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet.

No impairment of long-lived assets was recognized for the period presented.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

2.	Summary of principal accounting policies(Continued)

Revenue recognition

The Company recognized revenue when the following fundamental criteria are met: (i) persuasive evidence that an arrangement exists, (ii) delivery has occurred, (iii) our price to the customer is fixed or determinable and (iv) collection of the resulting accounts receivable is reasonably assured. These criteria are usually met at the time of product shipment. The Company does not recognize revenue until all customer acceptance requirements have been met and no significant obligations remain, when applicable. Customer purchase orders and/or contracts are generally used to determine the existence of an arrangement. Shipping documents are used to verify product delivery. The Company assesses whether a price is fixed or determinable based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. The Company assesses the collectability of the accounts receivable based primarily upon the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history.

Sales of goods represent the invoiced values of goods, net of sales returns, trade discounts and allowances. The Company records reductions to revenue for estimated product returns and pricing adjustments in the same period that the related revenue is recorded. The amount of these reductions is based on historical sales returns, analysis of credit memo data, and other factors known at the time. The amounts of reductions to revenue were $Nil and $2,571 for the six months ended September 30, 2009 and 2008, respectively.

Shipping and handling fees and costs

Costs incurred by the Group for shipping and handling, including costs paid to third-party transportation companies, to transport and deliver products to customers, are included in “Selling, general and administrative expenses”. Shipping and handling fees and costs amounted to $9,512 and $8,436 for the six months ended September 30, 2009 and 2008, respectively.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

2.	Summary of principal accounting policies (Continued)

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

FASB Accounting Standard Codification Topic 740 (ASC 740) “Income taxes”, (Formerly known as FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standards No. 109 (“FIN 48”)). ASC 740 clarifies the accounting for uncertainty in tax positions. This interpretation requires that an entity recognizes in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. The adoption of ASC 740 did not have any impact on the Group’s consolidated financial statements.

Comprehensive income

Other comprehensive income refers to revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive income but are excluded from net income as these amounts are recorded as a component of stockholders’ equity. The Company’s other comprehensive income represented foreign currency translation adjustment.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

2.	Summary of principal accounting policies (continued)

Foreign currency translation

The functional currency of the Group is Hong Kong dollars (“HK$”). The Group maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

In translating the financial statements of the Company from its functional currency into its reporting currency of United States dollars, balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using an average exchange rate prevailing during the reporting period. Any translation adjustments resulting are not included in determining net income but are included in cumulative other comprehensive income (loss), a component of stockholders’ equity.

	September 30,		September 30,
	2009		2008
Quarter end HK$ : US$ exchange rate		7.7510		7.7890
Average quarterly HK$ : US$ exchange rate		7.7520		7.7995

Share-based compensation

The Company adopted FASB Accounting Standard Codification Topic 718 (ASC 718) “Compensation – Stock Compensation” (Formerly known as SFAS No. 123R, Share-Based Payment (“SFAS No. 123R”)). Under ASC 718, the Group measures the cost of employee and consultant services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the costs over the period the employee or consultant is required to provide service in exchange for the award, which generally is the vesting period.

Share-based compensation expense included in selling, general and administrative expenses for the six month ended September, 2009 and 2008 was $66,761 and $nil, respectively. Since share-based compensation is not tax deductible in Hong Kong, the PRC and the United States, no related tax benefit has been recognized.

Earnings per share

Basic earnings per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the year. The weighted average number of common shares outstanding is adjusted to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

2.	Summary of principal accounting policies (continued)

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonable estimated.

Recently Issued Accounting Pronouncements

ASC 805, Business Combinations (“ASC 805”) (formerly included under Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations) contains guidance that was issued by the FASB in December 2007. It requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date fair value, with certain exceptions. Additionally, the guidance requires changes to the accounting treatment of acquisition related items, including, among other items, transaction costs, contingent consideration, restructuring costs, indemnification assets and tax benefits. ASC 805 also provides for a substantial number of new disclosure requirements. ASC 805 also contains guidance that was formerly issued as FSP FAS 141(R), Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies which was intended to provide additional guidance clarifying application issues regarding initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. ASC 805 was effective for business combinations initiated on or after the first annual reporting period beginning after December 15, 2008. The Company implemented this guidance effective January 1, 2009. Implementing this guidance did not have an effect on the Company’s financial position or results of operations; however it will likely have an impact on the Company’s accounting for future business combinations, but the effect is dependent upon acquisitions, if any, that are made in the future.

ASC 855, Subsequent Events (“ASC 855”) (formerly Statement of Financial Accounting Standards No. 165, Subsequent Events) includes guidance that was issued by the FASB in May 2009, and is consistent with current auditing standards in defining a subsequent event. Additionally, the guidance provides for disclosure regarding the existence and timing of a company’s evaluation of its subsequent events. ASC 855 defines two types of subsequent events, “recognized” and “non-recognized”. Recognized subsequent events provide additional evidence about conditions that existed at the date of the balance sheet and are required to be reflected in the financial statements. Non-recognized subsequent events provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date and, therefore; are not required to be reflected in the financial statements. However, certain non-recognized subsequent events may require disclosure to prevent the financial statements from being misleading. This guidance was effective prospectively for interim or annual financial periods ending after June 15, 2009. The Company implemented the guidance included in ASC 855 as of April 1, 2009. The effect of implementing this guidance was not material to the Company’s financial position or results of operations.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

3.	Accounts receivable, net

Accounts receivable consist of the following:

	As of
	September 30,		March 31,
	2009		2009
	(Unaudited)		(Audited)
	$		$

Accounts receivable		1,837,024		1,538,779
Less: allowance for doubtful accounts		-		-
		1,837,024		1,538,779

The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.

4.	Inventories

Inventories by major categories are summarized as follows:

	As of
	September 30,		March 31,
	2009		2009
	(Unaudited)		(Audited)
	$		$

Raw materials		-		53,100
Work-in-progress		-		-
Finished goods		-		84,160

		-		137,260

No inventories were written off for the six months ended September 30, 2009 and for the year ended March 31, 2009.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

5.	Property and equipment, net

Property and equipment consists of the following:

	As of
	September 30,			March 31,
	2009			2009
	(Unaudited)			(Audited)
	$			$

Machinery		2,092,127			2,091,586
Furniture and office equipment		593			593
Leasehold improvement		-			-
Motor vehicles		46,172			46,161
Total		2,138,892			2,138,340
Less: accumulated depreciation		(382,605	)		(246,496	)
Property and equipment, net		1,756,287			1,891,844

Depreciation expenses for the six months ended September 30, 2009 and 2008 were $136,028 and $71,635, of which $136,028 and $71,635 was included in cost of sales, and $Nil and $Nil was included in selling, general and administrative expenses for the six months ended September 30, 2009 and 2008, respectively.

6.	Bank borrowings and banking facilities

At September 30, 2009, there was no banking facilities consisting of bank loans and other credit facilities.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

7.	Share based compensation

On March 9, 2009, the Board of Directors adopted the 2009 Equity Incentive Plan (the “2009 Incentive Plan”) pursuant to which 6,000,000 shares of the Company’s common stock are reserved for issuance upon exercise of stock options, and for the issuance of stock appreciation rights, restricted stock awards and performance shares. The purpose of the 2009 Incentive Plan is to provide additional incentive to employees, directors, advisors and consultants. The 2009 Incentive Plan provides for a term of 10 years from the date of its adoption by the Board of Directors, after which no awards may be made, unless the 2009 Incentive Plan is early terminated by the Board.

A summary of non-vested equity share units issued under the 2009 Incentive Plan is as follows:

	Shares	Weighted average grant date fair value
		$
Balance as of April 1, 2009	220,000		0.51
Granted on April 2, 2009	20,000		0.51
Granted on July 10, 2009	220,000		0.51
Balance as of September 30, 2009	460,000		0.51

The stock awards vest equally over a period of one year from the date of grant.

8.	(Loss)/income per share

Basic (loss)/income per share of common stock was calculated by dividing the net (loss)/income by the weighted average number of shares of common stock outstanding for the period.

There is no dilution effect to the basic (loss)/income per share of common stock for the periods presented.

SOUND WORLDWIDE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

9.	Comprehensive (loss)/income

Other comprehensive (loss)/income refers to revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive (loss)/income but are excluded from net (loss)/income as these amounts are recorded as a component of stockholders’ equity. The Company’s other comprehensive (loss)/income represented foreign currency translation adjustment.

10.	Fair value measurement

A significant number of the Company’s financial instruments are carried at fair value with changes in fair value recognized in earnings each period. The Company adopted the provisions of FASB Accounting Standard Codification Topic 820 (ASC 820), “Fair Value Measurements and Disclosures” (Formerly known as SFAS No. 157 “Fair Value Measurement”). Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). In determining fair value, the Company uses various valuation techniques. ASC 820, Fair Value Measurements and Disclosures establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

11.	Subsequent events

We have evaluated significant events and transactions that occurred from October 1, 2009 through the date of this report and have determined that there were no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure in our Condensed Consolidated Financial Statements for the quarterly period ended September 30, 2009.

Item 2. Management’s Discussion and Analysis or Plan of Operation.

The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, our unaudited financial statements and related notes included elsewhere in this Report. Historical results and percentage relationships among any amounts in these financial statements are not necessarily indicative of trends in operating results for any future period. This report contains “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The statements, which are not historical facts contained in this Report, including this Management’s discussion and analysis of financial condition and results of operation, and notes to our unaudited financial statements, particularly those that utilize terminology such as “may” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements. Such statements are based on currently available operating, financial and competitive information, and are subject to various risks and uncertainties. Future events and our actual results may differ materially from the results reflected in these foward-looking statements. Factors that might cause such a difference include, but are not limited to, dependence on existing and future key strategic and strategic end-user customers, limited ability to establish new strategic relationships, ability to sustain and manage growth, variability of operating results, our expansion and development of new service lines, marketing and other business development initiatives, the commencement of new engagements, competition in the industry, general economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of our clients, the potential liability with respect to actions taken by our existing and past employees, risks associated with international sales, and other risks described herein and in our other filings with the Securities and Exchange Commission.

The safe harbor for forward-looking statements provided by Section 21E of the Securities Exchange Act of 1934 excludes issuers of “penny stock” (as defined under Rule 3a51-1 of the Securities Exchange Act of 1934). Our common stock currently falls within that definition.

All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes appearing elsewhere in this report.

Organizational History and Operations

Sound Worldwide Holdings, Inc. (the “Company”) and its subsidiaries (together, the “Group”) are principally engaged in manufacturing and trading of denim fabrics and garments. The Group owns production plants in Hong Kong and the People’s Republic of China and its customers are mainly in the United States, Europe and Japan.

For accounting purposes, the Exchange has been treated as an acquisition of Freedom 3 by Sound Worldwide and as a recapitalization of Sound Worldwide (i.e. a "reverse acquisition"), in which Sound Worldwide was deemed to be the accounting acquirer. As a result of the Exchange, the historical consolidated financial statements of the Company for periods prior to the date of the transaction are those of Sound Worldwide, as the accounting acquirer, and all references to the consolidated financial statements of the Company apply to the historical financial statements of Sound Worldwide prior to the transaction and the consolidated financial statements of the Company subsequent to the transaction. The Company’s shares have been restated retroactively to reflect the share exchange ratio as at the date of the transaction in a manner similar to a stock split.

Pursuant to the agreement, Ms. Lam had agreed to the return and cancellation of 6,063,750 shares of our common stock held by her.

As of September 30, 2008, the subsidiaries of the Company include the following:

þ Sound Worldwide Limited (“SWL”), incorporated in the British Virgin Islands on July 28, 1999, 100% of which is owned by the Company. SWL’s primary business is as an investment holding company;

þ Asian Point Investment Limited (“Asian Point”) , incorporated in the British Virgin Islands on March 26, 1997, 100% of which is owned by the Company. Asian Point’s primary business is manufacturing and trading denim fabrics.

SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements and reported amount of revenues and expenses during the reporting period.

Consolidation

The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal.

Revenue Recognition

Sales of Goods represent the invoiced values of goods, net of sales returns, trade discounts and allowances. The Company records reductions to revenue for estimated product returns and pricing adjustments in the same period that the related revenue is recorded. The amount of these reductions is based on historical sales returns, analysis of credit memo data, and other factors known at the time. The amounts of reductions to revenue were $2,571 and $27,005 for the nine months ended December 31, 2008 and 2007, respectively.

Trade Accounts Receivable

Inventory

Income Taxes

Share-based Compensation

Effective January 1, 2006, the Group adopted Statements of Financial Accounting Standards (“SFAS”) No. 123R, Share-Based Payment (“SFAS No. 123R”). Under SFAS No. 123R, the Group measures the cost of employee and consultant services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the costs over the period the employee or consultant is required to provide service in exchange for the award, which generally is the vesting period.

Share-based compensation expense of $66,761 and $nil for the nine months ended September 30, 2009 and 2008, respectively. Since share-based compensation is not tax deductible in Hong Kong, the PRC and the United States, no related tax benefit has been recognized.

Item 3. Controls and Procedures.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal controls over financial reporting. There was no change in our internal controls, which are included within disclosure controls and procedures, during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls.

Item 3A(T). Controls and Procedures.

Evaluation of disclosure and controls and procedures. As of the end of the period covered by this Quarterly report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) of the Exchange Act). Based on this evaluation, our chief executive officer and treasurer, the sole officers and directors of the company, concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The purpose of the Company’s establishment and maintenance of such controls is to identify material weaknesses that have more than a remote likelihood of leading to a material misstatement in the financial statements. While identifying control deficiencies and significant deficiencies represents an important component of management's assessment, the overall focus of internal control reporting is on those items that could result in material errors in the Company’s financial statements. As of the end of the period covered by this report, our chief executive officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15b under the Securities Exchange Act of 1934. Based on his review of our disclosure controls and procedures, he concluded that our disclosure controls and procedures are effective in timely alerting him to material information relating to us that is required to be included in our periodic SEC filings. Management is in the continuing process of analyzing and adopting new policies and procedures to improve the design and operations of our disclosure controls. These efforts include identifying and tasking available staff to better segregate duties; the review and consideration of more sophisticated software and other office procedures that would aid us in timely flagging potential material information that requires staff and management review and possible action prior to filing; and consideration of hiring additional staff geared towards review of our financial data and reporting. We continue to train to our existing staff in order to achieve reasonable assurance regarding the reliability of the financial statements.

We also expect that through the natural learning process management will achieve efficiencies as they complete future assessments of internal control. For example, management's knowledge of the prior year's assessment results will impact its current year risk-based analysis of the significant accounts and the related required documentation and testing that may be necessary. Management may determine that certain controls require more extensive testing, while other controls require little testing in a given year. Additionally, in reaching its conclusion of reasonable assurance, management may find it appropriate to adjust the nature, extent and timing of testing from year to year - in some years delving deeply into selected internal control areas while performing less extensive testing in other areas and changing that focus from year to year and quarter to quarter.

In any event, we will, consistent with Section 404 of the Sarbanes-Oxley Act of 2002, implement reasonable assurance, risk-based reviews of our internal financial reporting controls; evaluate internal control deficiencies; disclose material weaknesses; review information technology issues; and seek communications with auditors in order to periodically review our control procedures, and create new controls to address perceived material issues regarding financial reporting

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

Revenues

Our revenues decreased by $910,551, or 42.9%, from $2,121,906 in the three months ended September 30, 2008 to $1,211,355 in the three months ended September 30, 2009. The decrease was mainly attributable to the the reduction selling price of the products as a result of an increase in competition. In overall, there is a decrease in both sales volume and amount.

Cost of Revenues

For the three months ended September 30, 2009, our total cost of revenues decreased by $675,603, or 36.8%, to $1,158,469 from $1,834,072 for the three months ended September 30, 2008. This decrease was primarily due to the decrease in sales volume, which resulted from the increase in competition.

Gross Profit

Our gross profit amount decreased by $234,948, or 81.6%, from $287,834 for the three months ended September 30, 2008 to $52,886 for the three months ended September 30, 2009. Gross profit percentage recorded 4.4% and 13.6% for the quarter ended September 30, 2009 and 2008, respectively. The decreased gross profit amount and percentage was mainly due to the reduction in selling price.

Operating Expenses

Our total operating expenses (selling, general & administrative expenses (SG&A)) for the three months ended September 30, 2009, decreased by $48,492 or 40.5%, to $71,296 from $119,788 for the three months ended September 30, 2008. The decrease was in line with the decrease in revenue.

Other Income

Our other income, mainly consisting of commission and handling income, for the three months ended June 30, 2009 and 2008 were $nil and $6, respectively. This decrease was primarily due to the decrease in provision of handling services.

(Loss)/income from Operations

Our (loss)/income from operations for the three months ended September 30, 2009 and 2008 were $(18,410) and $168,052, respectively. The decrease was primarily due to the decrease in revenue.

Depreciation

Depreciation expense for office units, machinery, furniture equipment and motor vehicles, increased for the three months ended September 30, 2009 to $68,001, from $39,009 for the same period in 2008. The increase in depreciation expense was mainly due to the full period effect of the depreciation charge for three months ended September 30, 2009 as a result of the purchases of machinery made in the prior fiscal year.

Interest Expense

Interest expense, net, increased for the three months ended September 30, 2009 to $5,721 from $3,248 for the three months ended September 30, 2008. This increase was due to the increase in average bank borrowing balances.

Net (Loss)/Income

We had net loss of $24,131 for the three months ended September 30, 2009 as compared to net income of $163,011 for the three months ended September 30, 2008. The decreased net result was due to a decrease in revenue and income from operations.

COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

Revenues

Our revenues decreased by $1,896,004, or 46.6%, from $4,070,550 in the six months ended September 30, 2008 to $2,174,546 in the six months ended September 30, 2009. The decrease was mainly attributable to the the reduction selling price of the products as a result of an increase in competition. In overall, there is a decrease in both sales volume and amount.

Cost of Revenues

For the six months ended September 30, 2009, our total cost of revenues decreased by $1,687,897, or 45.9%, to $1,987,084 from $3,674,981 for the six months ended September 30, 2008. This decrease was primarily due to the decrease in sales volume, which resulted from the increase in competition.

Gross Profit

Our gross profit amount decreased by $208,107, or 52.6%, from $395,569 for the six months ended September 30, 2008 to $187,462 for the six months ended September 30, 2009. Gross profit percentage recorded 8.6% and 9.7% for the six months ended September 30, 2009 and 2008, respectively. The decreased gross profit amount and percentage was mainly due to the reduction in selling price.

Operating Expenses

Our total operating expenses (selling, general & administrative expenses (SG&A)) for the six months ended September 30, 2009, decreased by $46,644 or 20.5%, to $180,631 from $227,275 for the six months ended September 30, 2008. The decrease was resulted from the decrease in revenue.

Other Income

Our other income, mainly consisting of commission and handling income, for the six months ended September 30, 2009 and 2008 were $nil and $48, respectively. This decrease was primarily due to the decrease in provision of handling services.

Income from Operations

Our income from operations for the six months ended September 30, 2009 and 2008 were $6,831 and $168,342, respectively. The decrease was primarily due to the decrease in revenue.

Loss on Disposal of Best Allied

Our loss on our disposal of Best Allied for the six months ended September 30, 2008 of $276,041 was in relation to the disposal of Best Allied on April 1, 2008.

Depreciation

Depreciation expense for office units, machinery, furniture equipment and motor vehicles, increased for the six months ended September 30, 2009 to $136,028, from $71,635 for the same period in 2008. The increase in depreciation expense was mainly due to the full period effect of the depreciation charge for six months ended September 30, 2009 as a result of the purchases of machinery made in the prior fiscal year.

Interest Expense

Interest expense, net, increased for the six months ended September 30, 2009 to $31,287 from $12,039 for the six months ended September 30, 2008. This increase was due to the increase in average bank borrowing balances.

Net Loss

We had net loss of $24,456 for the six months ended September 30, 2009 as compared to net loss of $121,531 for the six months ended September 30, 2008. The decreased net loss was due to the loss on disposal of Best Allied.

Accounts Receivable

Accounts receivable, increased from $1,538,779 as of March 31, 2009 to $1,837,024 as of September 30, 2009. This increase was primarily due to the grant of longer credit terms to a few major customers. The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.

Inventories

At September 30, 2009, we did not have any inventory on hand, compared to $137,260 at March 31, 2009. Our inventories consist of raw materials, products which are work-in-progress, and finished goods. Our raw materials decreased from $53,100 at March 31, 2009 to $nil at September 30, 2009 primarily due to the decrease in purchases during the quarter ended September 30, 2009, as compared to the last quarter ended March 31, 2009. Our Work-in-Progress inventory recorded $0 both at March 31 and September 30, 2009. Our Finished Goods decreased from $84,160 to nil primarily due to more goods delivered to the customers near quarter ended September 30, 2009, as compared to the year ended March 31, 2009. No inventories were written off for the six months ended September 30, 2009.

Current Liabilities

Total current liabilities, consisting of accounts payable, bank and other borrowings and accrued expenses and other liabilities, decreased from $587,750 as of March 31, 2009 to $546,837 as of September 30, 2009. This decrease was primarily contributed by the decrease in bank borrowings.

Accounts Payable

Accounts payable, which typically operates on a monthly cycle, increased from $43,178 as of March 31, 2009 to $365,769 as of September 30, 2009. The increase was mainly due to the longer credit terms granted by the material suppliers.

Bank and Other Borrowings

Bank and other borrowings, which consist of bank overdrafts and other borrowings, decreased from $340,066 as of March 31, 2009 to nil as of September 30, 2009. This decrease was primarily due to repayment of all bank borrowings during the six months ended September 30, 2009.

Banking Facilities:

At September 30, 2009, the banking facilities consisting of bank loans and other credit facilities were $567,705, of which no amount has been drawn down and the whole facility remains available. As of September 30, 2009, the above banking borrowings were secured by the following:

(a)

charge over properties owned by the directors of the Company; and

(b)

personal guarantee executed by the directors of the Company.

Bank loans were charged at rate 0.5% per annum below the bank’s Prime to 1% per annum above the Prime.

The interest rates of other credit facilities were at the bank’s Hong Kong Dollar Best Lending Rate or prevailing funding cost, whichever was higher, plus 0.5% to 2% per annum.

Accrued Expenses and Other Liabilities

Accrued expenses decreased from $204,506 as of March 31, 2009 to $181,068 as of September 30, 2009. Accrued expenses consist of legal and professional fees, accrued staff related costs and other accruals and liabilities. Other accruals and liabilities consist of payables on general administrative and selling expenses. The decrease in accrued expenses and other liabilities was primarily due to fewer invoices received and unpaid near quarter ended September 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Net cash provided by operating activities totaled $340,241 for the six months ended September 30, 2009, which was a decrease from the net cash provided by operating activities, which totaled $1,105,198 for the same period of 2008. This net cash provided by operating activities was primarily attributable to an increase in accounts payable and a decrease in inventory level, but offset in part by an increase in accounts receivable and other receivables.

Investing Activities

Net cash used in investing activities totaled $nil for the six months ended September 30, 2009, as compared to the net cash used in investing activities of $389,134 for six months ended September 30, 2008. The use of cash from investing activities represented purchases of property and equipment.

Financing Activities

Net cash used in financing activities totaled $340,110 for six months ended September 30, 2009, as compared to $851,444 used in financing activities for the six months ended September 30, 2008. The net cash used in financing activities was due to a net repayment of bank borrowings of $340,110 for the six months ended September 30, 2009 as compared to a net repayment of bank borrowings of $851,444 for the six months ended September 30, 2008.

The summary of our cash flow statement was as follows:

	For the Six Months Ended
	September 30, 2009			September 30, 2008
Net cash provided by operating activities	$	340,241		$	1,105,198

Net cash used in investing activities	$	-		$	(389,134	)

Net cash used in financing activities	$	(341,110	)	$	(851,444	)

Effect of exchange rate on cash	$	1,388		$	1,138

Net increase/(decrease) in cash	$	1,519		$	(134,242	)

Cash at beginning of period	$	7,989		$	288,356

Cash at end of period	$	9,508		$	154,114

Impact of Inflation and Changing Prices

We were not impacted by inflation during the past two fiscal years in any material respect. Interest rate hikes have increased the rental cost of our vault cash. As the interest rates increase and vault cash costs increase, this will have a less favorable impact on our income.

The following table sets forth the Company Contractual Payment Obligations:

Contractual Obligation	Payment by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Obligations	$	104,615	$	104,615		—		—		—
Capital Obligations		—		—		—		—		—
Operating Lease Obligations		—		—		—		—		—
Other Long—Term Liabilities Reflected on the Registrant’s Balance Sheet under GAAP		—		—		—		—		—
Total	$	104,615	$	104,615		—		—		—

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On June 27, 2006, Freedom issued 100,000 shares of its common stock to Getting You There, LLC, or GYT, an entity owned by Virginia K. Sourlis, Esq., the sole officer and director of Freedom, for aggregate purchase price of $2,100. The Company sold these shares of common stock under the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded the company under Section 4(2) and Regulation D promulgated thereunder due to the fact that the issuance did not involve a public offering and in light of fact that Ms. Sourlis is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Act. On October 25, 2007, we redeemed all of the 100,000 shares from GYT in exchange for 300,000 shares of the resultant issuer’s common stock after the merger.

In connection with its merger with SWL, on October 25, 2007, Freedom issued 350 shares of its common stock for each share of common stock held by stockholders of SWL of which 2,330,200 are being registered by the Selling Stockholders listed in this Registration Statement. The Company issued these shares under the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded the company under Regulation S promulgated thereunder due to the investors were non-US residents.

As previously reported on a Current Report on Form 8-K filed with the Securities and Exchange Commission on May 30, 2008, on May 27, 2008, the Company and SWL, entered into a Share Purchase and Exchange Agreement (the “Exchange Agreement”) with Best Allied, a wholly-owned subsidiary of SWL, and Ms. Ivy S.K. Lam, a director and officer of Best Allied and a stockholder of an aggregate of 6,063,750 shares of the Company’s Common Stock. Pursuant to the Exchange Agreement, at a closing held on May 30, 2008, Ms. Lam purchased from the Company and SWL 10,000 shares of Common Stock of Best Allied owned by SWL, which constituted 100% of the issued and outstanding shares of Best Allied, in exchange for 6,063,750 shares of the Company’s Common Stock held by Ms. Lam, which constituted 100% of the shares of the Company’s Common Stock held by Ms. Lam (the “Exchange”). The effective date of the Exchange is April 1, 2008. Pursuant to the agreement, Ms Lam had agreed to the return and cancellation of 6,063,750 shares of our common stock held by her. The Company issued these shares under the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded the Company under Regulation S promulgated thereunder due to the fact that Ms. Lam is not a US resident.

On September 19, 2008, the Company issued 300,000 shares of restricted common stock to Wakabayashi Fund, LLC in consideration for services rendered. The Company issued these shares under the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded the Company under Regulation S promulgated thereunder due to the fact that none of the members of Wakabayashi Fund, LLC are non- US residents.

On August 20, 2009, the Company issued 220,000 shares of restricted common stock to Virginia K. Sourlis, Esq. for services rendered.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits

Item No.	Description	Method of Filing

31.1	Certification of Roger Kwok Wing Fan pursuant to Rule 13a-14(a).	Filed electronically herewith

32.1	Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. § 1350 adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.	Filed electronically herewith

SIGNATURES

Dated: September 30, 2009

/s/ ROGER KWOK WING FAN

Roger Kwok Wing Fan

President and Chief Executive Officer and Chairman

(Principal Executive Officer) of Sound Worldwide Holdings, Inc.