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
August 7, 2007
Date of Report (Date of earliest event reported)
SOYO GROUP, INC.
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(Exact name of registrant as specified in its charter)
Nevada 333-42036 95-4502724
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1420 South Vintage Avenue
Ontario, California 91761-3646
(Address of principal executive offices, including zip code)
(909) 292-2500
(Registrant's telephone number, including area code)
N/A
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(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:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
Item 4.02 Non Reliance on Previously Issued Financial Statements or a
Related Audit or Completed Interim Review
On or about May 18, 2007, SOYO Group Inc. (the "Company") determined that
certain items on the audited consolidated financial statements of the Company
included in the Company's Form 10-K for the year ended December 31, 2006 filed
on April 2, 2007 and Quarterly Report on Form 10-Q for the quarter ended March
31, 2007 filed on May 15, 2007 should no longer be relied upon based on reasons
as described below.
Nancy Chu, CFO, communicated to our independent auditors, Vasquez & Company
LLP, management and our Audit Committee that the Company inadvertently made an
error by treating the advances received from its factor, Accord Financial
Services, as being sold without recourse, when in fact, all such advances were
sold with recourse. As a result, the Company understated both its trade
receivables and payables.
The Company's CEO agreed to restate the financial statements for these
periods and have filed the amended Form 10-K and Form 10-Q on August 6, 2007.
The error in treatment of advances received from factor indicates the
existence of an internal control deficiency that may constitute a material
weakness under standards established by the Public Company Accounting Oversight
Board. A material weakness is a significant deficiency or combindation of
significant deficiencies that results in more than a remote likelihood that a
material misstatement of financial statements will not be prevented or detected.
Management and Vasquez & Company LLP have discussed the possible material
weakness with the Audit Committee. By implementing remedial measures discussed
below, management intends to improve its internal control over financial
reporting and to avoid future material misstatements of financial statements.
The Company has implemented or implementing the following measures:
On an ongoing basis, the Controller will continue to review in detail
significant transactions entered into by the Company, and review SEC accounting
rules, including rules changes and interpretations, to determine applicability
to the Company. The Company will obtain general educational guidance regarding
applicable SEC accounting rules from its independent auditors, Vasquez & Company
LLP. After obtaining general educational guidance, the Company may also consult
with other auditors for detailed educational guidance and implementation. The
Controller will report changes in SEC accounting rules, GAAP and interpretations
of SEC accounting rules and GAAP, that may be applicable to the Company with the
Chief Executive Officer, the Chief Financial Officer and the Audit Committee.
The Company has discussed the matters disclosed under Item 4.02 in this
current report on Form 8-K with Vasquez & Co., LLP, the Company's independent
registered public accounting firm.
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.
SOYO GROUP, INC.
(Registrant)
Date: August 7, 2007 By: /s/ MING CHOK
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Ming Chok, CEO
Date: August 7, 2007 By: /s/ NANCY CHU
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Nancy Chu, CFO