China Education Alliance Receives S.E.C. Letter Regarding Non-Compliance of Former Auditor
HARBIN, China, March 21, 2013 /PRNewswire/ -- China Education Alliance, Inc. ("China Education Alliance" or the "Company", OTCQX: CEAI), a China-based education resource and services company today announced that it has received a letter from the Securities and Exchange Commission ("SEC") regarding the non-compliance of its former auditor.
On March 16, 2013, China Education Alliance received a letter from the Securities and Exchange Commission dated March 15, 2013 informing the Company that the Chief Accountant of the Commission had received a PCAOB Form 3 report issued by the Company's former independent accountant, Sherb & Co., LLP ("Sherb") stating that it had notified the Company on February 14, 2013 that Sherb was not in technical compliance with the concurring partner rotation rules of Auditing Standard No. 7 ("Sherb Letter") and consequently, Sherb's audit report dated April 12, 2011 on the financial statements for the years ended December 31, 2010 and 2009 could not be relied upon.
China Education Alliance never received the Sherb Letter or any notification from Sherb - at any time during or after Sherb's engagement as the Company's independent accountant - of Sherb's non-compliance.
However, upon written request, the Company obtained a copy of the Sherb Letter dated January 31, 2013 on March 20, 2013. The Sherb Letter stated that Sherb was not in technical compliance with the concurring partner rotation rules of the PCAOB on certain prior audit and review engagements that they performed. The engagements affected were the audit for the year ended December 31, 2010 and the reviews for the interim periods ended March 31, 2010, June 30, 2010, September 30, 2010, March 31, 2011, June 30, 2011 and September 30, 2011. As a result of the foregoing, Sherb stated that the Company may no longer place reliance on their audit report and review for such periods.
China Education Alliance's Board of Directors and management continue to believe that the affected audit and reviewed reports fairly present, in all material aspects, the Company's financial condition and results of operations as of the end of and for the periods presented.
The audit for the year ended December 31, 2011 was performed by Baker Tilly Hong Kong, a member of the Baker Tilly International accountancy and business advisory network.
The Company will take whatever action necessary on behalf of its shareholders to rectify Sherb's non-compliance and default.
About China Education Alliance, Inc.
China Education Alliance, Inc. (http://www.chinaeducationalliance.com) is a leading educational services company offering high-quality instructors and online education materials for students between the ages of 6 to 18 and adults (university students and professionals) aged 18 and over. Divided into two segments, students and graduate professionals, our business model delivers the skills and knowledge necessary to excel in a rapidly growing and highly competitive China. The Company provides students in the first segment with online education materials sourced from top tier schools and famous instructors for download, as well as online training and tutoring services. With teaching centers located across China, the Company also offers hands on training and tutoring to aid Chinese students pass the two most important tests they will face in their educational careers: the senior high school entrance and college entrance exams. In the second segment for graduates and professionals, China Education Alliance provides vocational training courses in subjects including IT, administration, multimedia, as well as several professional training programs.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding our ability to prepare the company for growth, the Company's planned expansion in 2009 and predictions and guidance relating to the Company's future financial performance. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs and are not a guarantee of future performance but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand especially in the education industry, pricing and demand trends for the Company's products, changes to government regulations, risk associated with operation of the Company's new facilities, risk associated with large scale implementation of the company's business plan, the ability to attract new customers, ability to increase its product's applications, cost of raw materials, downturns in the Chinese economy, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. Investors are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release, readers are cautioned not to place undue reliance on any of them and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.
For more information, please contact:
China Education Alliance, Inc.
Ms. Cloris Li
Chief Financial Officer
Mr. Christian Arnell
Telephone: +86 10 5826 4939
SOURCE China Education Alliance, Inc.