Attached files
file | filename |
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8-K/A - FIRST CHINA PHARMACEUTICAL GROUP, INC. | v204666_8ka.htm |
EX-99.3 - FIRST CHINA PHARMACEUTICAL GROUP, INC. | v204666_ex99-3.htm |
EX-99.1(B) - FIRST CHINA PHARMACEUTICAL GROUP, INC. | v204666_ex99-1b.htm |
EX-99.1(A) - FIRST CHINA PHARMACEUTICAL GROUP, INC. | v204666_ex99-1a.htm |
EX-99.2(A) - FIRST CHINA PHARMACEUTICAL GROUP, INC. | v204666_ex99-2a.htm |
First
China Pharmaceutical Group, Inc.
Pro-Forma
Consolidated Financial Statements
First
China Pharmaceutical Group, Inc.
INTRODUCTION
AND BASIS OF PRESENTATION
FOR
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The
following pro forma consolidated financial statements give effect to the
acquisition of First China Pharmaceutical Group Limited (“Target”) by First
China Pharmaceutical Group, Inc. (“FCPG”).
Pursuant
to a Share Exchange Agreement dated August 23, 2010, FCPG, a public corporation
incorporated in Nevada on July 31, 2007, acquired 100% of the issued and
outstanding shares of Target, a private company formed in Hong Kong on April 29,
2010, in exchange for 15,000,000 shares of common stock of FCPG, representing
25% of its total issued and outstanding shares at the time.
The
share exchange transaction between Target and FCPG is considered an acquisition
and was accounted for as such with FCPG being treated as the accounting and
legal parent and Target being treated as the accounting and legal subsidiary.
This means the consolidated results of operations of FCPG going forward will
include those of FCPG for the period from its inception on July 31, 2007 and
those of Target since the date of the acquisition, September 15,
2010.
The
following pro forma consolidated balance sheet includes the balance sheets of
FCPG and Target as of June 30, 2010, as if the acquisition of Target occurred on
that date.
The pro
forma consolidated balance sheet and statement of operations should be read in
conjunction with the separate historical audited financial statements for FCPG
and unaudited combined financial statements for Target, as
follows:
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(i)
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for
FCPG, audited financial statements for the years ended March 31, 2010 and
2009, as filed in FCPG’s annual report on Form 10-K on May 10,
2010;
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(ii)
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for
Target, unaudited combined balance sheets of Target and Kun Ming Xin Yuan
Tang Pharmacies Co., Ltd. as of June 30, 2010 and December 31, 2009 and
the unaudited combined statements of income and comprehensive income, and
cash flows for the six months ended June 30, 2010 and 2009, as filed as
Exhibit 99.1(b) of this current report on Form
8-K.
|
The
fiscal year ends of FCPG and Target are March 31 and December 31,
respectively. The pro forma balance sheet and earnings (loss) per
share data of FCPG and Target are indicative of their consolidated financial
position, had the acquisition occurred on June 30, 2010.
FIRST
CHINA PHARMACEUTICAL GROUP, INC.
PRO
FORMA CONSOLIDATED BALANCE SHEET
|
FCPG
June 30,
2010
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Target
June 30,
2010
|
Pro-Forma
Adjustments
June 30,
2010
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Pro-Forma
Consolidated
June 30,
2010
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|||||||||||||
(A)
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(B)
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(Note
2)
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|||||||||||||||
$
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$
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$
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$
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||||||||||||||
ASSETS
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|||||||||||||||||
CURRENT
ASSETS
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|||||||||||||||||
Cash
and cash equivalents
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$ | 27 | $ | 19,414 | $ | 19,441 | |||||||||||
Other
receivables
|
- | 14,162,350 | 14,162,350 | ||||||||||||||
Inventory
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- | 5,908,464 | 5,908,464 | ||||||||||||||
Prepaid
expenses
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17 | - | 17 | ||||||||||||||
44 | 20,090,228 | 20,090,272 | |||||||||||||||
PLANT
AND EQUIPMENT, NET
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- | 3,497 | 3,497 | ||||||||||||||
INTANGIBLE
ASSETS, NET
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- | 2,608 | 2,608 | ||||||||||||||
GOODWILL
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- | - | |||||||||||||||
GOODWILL
IMPAIRMENT
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- | - |
(a)
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8,509,298 | 8,509,298 | ||||||||||||
$ | 44 | $ | 20,096,333 | $ | 8,509,298 | $ | 28,605,675 | ||||||||||
LIABILITIES
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|||||||||||||||||
CURRENT
LIABILITIES
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|||||||||||||||||
Short-term
borrowings
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$ | - | $ | 859,677 | $ | 859,677 | |||||||||||
Other
payable and accrued liabilities
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10,250 | 10,480,234 | 10,490,484 | ||||||||||||||
Income
tax payable
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- | 2,265,720 | 2,265,720 | ||||||||||||||
Due
to related party
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12,752 | - | 12,752 | ||||||||||||||
23,002 | 13,605,631 | 13,628,633 | |||||||||||||||
STOCKHOLDERS'
EQUITY
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|||||||||||||||||
CAPITAL
STOCK
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|||||||||||||||||
Authorized
– 200,000,000
common shares $0.001 par value;
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|||||||||||||||||
60,000,000
issued and outstanding
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45,000 | 1,285 |
(a)
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15,000 | 60,000 | ||||||||||||
(1,285 | ) | ||||||||||||||||
ADDITIONAL
PAID IN CAPITAL
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5,000 | - |
(a)
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14,985,000 | 14,990,000 | ||||||||||||
RETAINED
EARNINGS (DEFICIT)
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(72,958 | ) | 6,454,592 |
(a)
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(6,454,592 | ) | (72,958 | ) | |||||||||
EFFECT
OF FOREIGN TRANSLATION ADJUSTMENTS
|
- | 34,825 | (34,825 | ) | - | ||||||||||||
(22,958 | ) | 6,490,702 | 8,509,298 | 14,977,042 | |||||||||||||
$ | 44 | $ | 20,096,333 | $ | 8,509,298 | $ | 28,605,675 |
The
accompanying notes are an integral part of these pro forma financial
statements
FIRST
CHINA PHARMACEUTICAL GROUP, INC.
PRO
FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FCPG
Three Months
June 30,
2010
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Target
Six Months
June 30,
2010
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Pro-Forma
Adjustments
June 30,
2010
|
Pro Forma
Six Months
June 30,
2010
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|||||||||||||
Sales,
net of tax
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$ | - | $ | 13,876,734 | $ | - | $ | 13,876,734 | ||||||||
Cost
of sales
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- | 11,442,368 | - | 11,442,368 | ||||||||||||
Gross
margin
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- | 2,434,366 | - | 2,434,366 | ||||||||||||
Expenses
and other items:
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||||||||||||||||
Selling
expenses
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- | 8,859 | 8,859 | |||||||||||||
Administrative
expenses
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4,347 | 78,251 | - | 82,598 | ||||||||||||
Depreciation
and amortization
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- | 1,196 | 1,196 | |||||||||||||
Other
operating expenses
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- | 91,962 | 91,962 | |||||||||||||
Interest
income
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- | (5,083 | ) | - | (5,083 | ) | ||||||||||
Interest
expense
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- | 22,159 | - | 22,159 | ||||||||||||
Total
expenses and other items
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4,347 | 197,344 | - | 201,691 | ||||||||||||
Income
before income taxes
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(4,347 | ) | 2,237,022 | - | 2,232,675 | |||||||||||
Income
tax
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- | (244,981 | ) | - | (244,981 | ) | ||||||||||
Net
(Loss)/Income
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(4,347 | ) | 1,992,041 | - | 1,987,694 | |||||||||||
Loss
per Share – basic and diluted
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$ | (0.000 | ) | $ | 0.033 | |||||||||||
Shares
used in calculating basic and diluted loss per share
|
45,000,000 |
a
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15,000,000 | 60,000,000 |
a – Refer to Note 2 (C) to
the financial statements.
The
accompanying notes are an integral part of these pro forma financial
statements
FIRST
CHINA PHARMACEUTICAL GROUP, INC.
PRO
FORMA CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE
1 – Share Exchange Transaction
On
September 15, 2010, FCPG, a public shell company, entered into a share exchange
agreement with Target, a private corporation, whereby 100% of the shares of
Target were exchanged for 15,000,000 shares of FCPG common. There was
no change in beneficial ownership of FCPG as a result of the transaction and
accordingly, the acquisition of Target by FCPG is considered a purchase and was
accounted for as such.
The
unaudited Pro Forma Combined Balance Sheet represents the consolidated financial
position of FCPG as of June 30, 2010 and Target as of June 30,
2010.
The
unaudited Pro Forma Consolidated Statements of Operations represents the
combined results of operations of FCPG for the three months ended June 30, 2010
and Target for the six months ended June 30, 2010.
NOTE
2 - Pro Forma Adjustments
The pro
forma adjustments to the consolidated balance sheet give effect to the
acquisition of Target as if the transactions had occurred at the company’s
respective balance sheet date of the most recent audit.
|
A.
|
Derived
from the unaudited balance sheet of FCPG as of June 30,
2010.
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B.
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Derived
from the unaudited balance sheet of Target as of June 30,
2010.
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C.
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Pro
forma adjustment to issue 15,000,000 common shares of FCPG for 100% of
outstanding shares of Target valued at $15,000,000 being the consideration
given in the transaction valued at the market price on the date of the
transaction being $1.00 per share. The market share price for FCPG on
September 15, 2010 was $1.00 per share and the quoted market price is from
OTCBB Market.
|
NOTE
3- Goodwill
Goodwill
was initially recognized from the premium paid over the value of net asset of
the FCPG HK (XYT) as at the acquisition date, September 15, 2010.
In
accordance to the Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets, or SFAS No. 142, it requires goodwill to be
subsequently tested for impairment on an annual basis and between annual tests
in certain circumstances, and written down when impaired.