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China Qinba Pharmaceuticals, Inc. was incorporated on May 29, 2008 under the laws of Delaware. On August 18, 2008, China Qinba formed Xi’an Development Co., Ltd. as a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the People’s Republic of China (“PRC”) (“Xi’an Development”).
Xi’an Pharmaceuticals, our operating entity, was incorporated in the PRC on October 15, 1969. Xi’an Pharmaceuticals is in the business of manufacturing, marketing and sales of pharmaceuticals in China.
Subsidiaries
As a result of the Merger Transaction, China Qinba and Xi’an Development are our wholly-owned subsidiaries. Xi’an Pharmaceuticals, the entity through which we operate our business, currently has no subsidiaries, either wholly-owned or partially-owned.
Our Business
Xi’an Pharmaceuticals was formed in October 15, 1969 under the laws of the PRC and is engaged in the research, development, manufacture, packaging, marketing and distribution of pharmaceutical and medical products in China for human use for a variety of diseases and conditions. All of our operations are conducted in the People’s Republic of China where our two manufacturing facilities are located, one in Xixiang County in Hanzhong and one in Xi’an Jinghe Industrial Zone. We manufacture pharmaceutical products in the form of capsules, oral solutions, tablets, granules, syrups, medicinal teas, tincture and solutions for injection that are either small volume parenteral solutions that are freeze dried powders or large volume parenteral solutions. Certain of the pharmaceutical products we manufacture are used in the treatment of viral pneumonia, hypotonicity dehydration, viral influenza and many other diseases and indications.
We currently manufacture 85 pharmaceutical products which are sold to numerous distributors who distribute our products pursuant to distribution agreements to licensed healthcare providers such as hospitals, clinics and pharmacies. We currently have 35 active distribution agreements. The raw materials used to manufacture our products include various medicinal herbs such as tumeric and zedoary, which we obtain from specified and qualified suppliers with national qualifications, and sulfamethoxazole, an antibiotic, which is primarily used in the manufacture of Fufang Qiguanyan Pian. We also enter into trading agreements for the supply of many of the materials used to manufacture and package our products including aluminum foil, which we use as the inner packing materials used in tablets production. Xi’an Pharmaceuticals has written agreements with substantially all of its suppliers. The agreements with three of Xi’an Pharmaceuticals’ largest suppliers each commenced January 1, 2008 and expire December 31, 2010. These agreements typically provide that the suppliers are to supply product to Xi’an Pharmaceuticals within a specified period of time after Xi’an Pharmaceuticals’ placement of an order. Typically, Xi’an Pharmaceuticals is required to pay for the products within 60 days of their receipt. The price paid for the products shall be the market price publicized at the time of purchase.
Our focus has been on the development and sale of pharmaceutical products based on traditional Chinese medicines designed to address numerous diseases and indications, with an emphasis on sales to community hospitals and rural medical institutions.
Principal Products
In the fiscal year ended December 31, 2009, our revenues were principally derived from sales of products listed below. We have SFDA1 approval for all medicines and active pharmaceutical ingredients that we market. Detailed information is provided in the table of products below.
We market our pharmaceutical products under numerous brand names, including “Xiaonengren” for our pediatric series of drugs. The following is a list of some of our approved pharmaceutical products and their intended uses.
China Pharmaceuticals, Inc. (CFMI) Reports Record Q2 Results: Sales Grow 105% |
China Pharmaceuticals, Inc. (OTCBB:CFMI) |
| Product No. | Product Name | Indications | ||
| 1 | Metronidazole and Glucose Injection | Varieties of tract infections caused by Anaerobion, trichomoniasis and amebic dysentery. | ||
| 2 | Sodium Chloride Injection | Hypotonicity dehydration solvent or thinner for injection. | ||
| 3 | Glucose and Sodium Chloride Injection | Body fluid loss; supply body fluid, electrolyte, energy preoperation, intraoperation and postoperation. | ||
| 4 | Glucose Injection | Supply energy and body fluid, total, total parenteral nutrition, hypoglycemia, hypertonic solution for dehydrating agent. | ||
| 5 | Compound Sodium Chloride Injection | Hypotonicity dehydration solvent or thinner for injection. | ||
| 6 | Mannitol Injection | Hydrocephalus, glaucoma, edema caused by deep burning or scald, acute renal failure and ascites. | ||
| 7 | Heartleaf Houttuynia Herb Injection | Clear heat, detoxification, promote diuresis. Used for lung abscess, phlegm, cough, urinary tract infections. | ||
| 8 | Sterilized Water for Injection | Solvent of sterilized powder for injection, thinner of injection, or wash solution for operation endoscope in urology Surgery. | ||
| 9 | Zedoary Turmeric Oil and Glucose Injection | Viral pneumonia, viral influenza, encephalitis, myocarditis, viral enteritis, mumps, stomatitis. | ||
| 10 | Zedoary Turmeric Oil and Glucose Injection | Anti-viral drug for children’s viral pneumonia. | ||
| 11 | Citicoline Sodium and Glucose Injection | Irritable neurocranium trauma, disturbance of consciousness after brain operation. | ||
| 12 | Fluconazole Injection | Mycotic infections by candida, cryptococcosis, coccidioidomycosis. | ||
| 13 | Fructose Sodium Diphosphate Injection | Hypophosphataemia angina, acute myocardial infarction and arrhythmia of coronary heart disease and myocardial ischemia of cardiac failure. | ||
| 14 | Matrine and Sodium Chloride Injection | Chronic active hepatitis, chronic prolonged hepatitis. | ||
| 15 | Glycerin Sodium Chloride Injection | High osmosis dehydrant. Reduce high cranial pressure caused by intracerebral hemorrhage, cerebral infarction, trauma, meningitis and brain tumor. | ||
| 16 | Xylitol and Sodium Chloride Injection | Supply heat, improve glycometabolism and remove ketonemia, used as substitute of sugar for diabetics. | ||
| 17 | Ligustrazine Hydrochloride Glucose Injection | Insufficient blood supply, cerebral embolism, angiitis, coronary heart disease, angina. | ||
| 18 | Levofloxacin and Glucose Injection | Respiratory tract infections, urinary tract infections, genital tract infections, skin soft tissue infections, enteral infections, septicemia. | ||
| 19 | Dexamethasone Sodium Phosphate Injection | Hypoadrenocorticism, rheumatoid arthritis, cerebral edema, congenital adrenal cortical hyperplasia. | ||
| 20 | Atropine Sulfate Injection | Toxic shock caused by serious infection, internal organs angina, preanesthetic medication, antiarrhythmic. | ||
| 21 | Kanamycin Sulfate | Systemic infections caused by various gram negative bacteria. | ||
| 22 | Gentamycin Sulfate | Urinary tract infection, septicemia, skin soft tissue infection, enteral infection caused by ordinary pathogen and preoperative prophylactic medication. |
| 23 | Hydrocortisone Injection | Toxic symptom caused by various infections, hypocorticoidism caused by various infections, anaphylactic shock. | ||
| 24 | Lappaconitine Hydrobromide for Injection | Non-addictive analgesics, strong analgesic effect, have effect of local anaesthesia, temperature reduction, antifebrile and detumescence. | ||
| 25 | Vitamin B12 Injection | Pernicious anemia, megaloblastic anemia, anemia caused by antifolate drugs, stearrhea. | ||
| 26 | Procaine Hydrochloride Injection | Local anesthetics, used for infiltration anesthesia, mental conduction block. | ||
| 27 | Bupleurum injection | Clear heat, relieve exterior syndrome, for cold treatment. Fever of influenza and malaria. | ||
| 28 | Lidocaine hydrochloride Injection | Local anesthetics, antiarrhythmic. | ||
| 29 | Analgin Tablets | Clear heat and kill pain. | ||
| 30 | Compound Sulfamethoxazole Tablets | Sulfa antibacterial drug. | ||
| 31 | Inosine Tablets | Coenzyme drug, improve metabolism, for various liver and heart diseases, leukocytopenia, central retinitis, optic atrophy. | ||
| 32 | Metronidazole Tablet | Amebicide, antitrichomonal agent, Anti-anaerobic bacteria. | ||
| Vitamin C Tablets | Vitamin C, prevent and treat scurvy. | |||
| 34 | Occrycetin Tablets | Broad spectrum antibiotics. Used for rickettsiosis, brucellosis, mycoplasmalpneumonia, Chlamydia infection, sensitive Gram-positive cocci, subinfection caused by coccus-negative. | ||
| 35 | Lidan Paishi Pian | Clear heat and promote diuresis, cholagogue and remove calculi, biliary tract infection, cholecystitis. | ||
| 36 | Rhubarb Sodium Bicarbonate Tablets | Stomachic and acid making. Used for inappetence and hyperchlorhydria. | ||
| 37 | Dried Yeast Tablets | Vitamin medicine. | ||
| 38 | Berberine Hydrochloride Tablets | Antibacterial drug, used for intestinal infection of dysentery bacillus. | ||
| 39 | Compound Tablet of Fritillary Bulb | Clear lung heat, eliminate phlegm, and relieve cough and asthma. Used for wind cold cough and asthma, chest distress, acute and chronic bronchitis. | ||
| 40 | compound tablet of red sage root | Activate blood and dissolve stasis, regulate vital energy and alleviate pain, used for chest distress and angina. | ||
| 41 | Qinghuo Zhimai Pian | Clear heat, detoxification and purgation. | ||
| 42 | Xanthinol Nicotinate Tablets | Ischemic cerebrovascular diseases like cerebral infarction and thrombosis, brain damages like apoplectic sequela, cerebral trauma, brain surgery sequela, also used for thromboangitis obliterans and phlebitis. | ||
| 43 | Tolperisone Hydrochloride Injection | Central muscle relaxant, vasodilatation. Increase blood volume, used for atherosclerosis and apoplexy sequela. | ||
| 44 | Fufang Huzhang Anmin Pian | Clear heat and detoxification, used for fever, rhinorrhoea, headache, faucitis. | ||
| 45 | Berberine Hydrochloride and Trimethoprim Tablets | Gastroenteropathy caused by sensitive bacteria, intestinal infection like bacillary dysentery. | ||
| 46 | Fufang Qiguanyan Pian | Relieve inflammation, reduce phlegm, relieve asthma, for acute and chronic bronchitis. | ||
| 47 | Qinggan Pian | Clear heat and detoxification, cholagogue and remove calculi. Used for cold and fever, throat irritation, parotitis, muggy jaundice. | ||
| 48 | Paracetamol,Caffein,Atificial Cow-bezoar and chlorphenamine Maleate Tablets | Relieve fever, headache, blocked nose, sore throat and sneezing caused by common cold and influenza. |
| 49 | Sanhuang Pian | Clear heat and detoxification, purge pathogenic fire, purgation. Used for body heat, conjunctival congestion, ulcers in mouth and nose, throat irritation, bleeding gum, upset and thirsty, yellow urine, constipation, acute gastroenteritis, and dysentery. | ||
| 50 | Norfloxacin Capsules | Urinary tract infections, gonorrhoea, prostatitis, enteral infections, typhia, salmonella bacteria infections. | ||
| 51 | Paracetamol,Caffein,Atificial Cow-bezoar and chlorphenamine Maleate capsules | Relieve fever, headache, blocked nose and sore throat caused by common cold and influenza. |
| 52 | Compound Rifampicin Capsules | Various tuberculosis, improve tolerance with other anti-tuberculosis drugs, shorten treatment period, reduce adverse reaction, defer occurrence of antibiotic-resistant bacteria. Used for extrapulmonary tuberculosis, lepriasis, common bacterial infections. | ||
| 53 | Pediatric Paracetamol Atificial Cow-bezoar and Chlorphenamine Maleate Granules | Relieve headache, fever, sore throat and blocked nose caused by cold. | ||
| 54 | Isatis Root Granules | Clear heat and detoxification, cool blood, relieve sore throat, detumescence. Used for body heat, sore throat, tonsillitis and parotitis. | ||
| 55 | Yinhua Ganmao Chongji | Clear heat, relieve exterior syndrome, relieve sore throat, cold, fever, headache, throat irritation. | ||
| 56 | Ganmao Tuire Keli | Clear heat and detoxification. Used for respiratory tract infection, acute tonsillitis and faucitis. | ||
| 57 | Runhou Yaocha | Good for lung and can reduce internal heat, smooth throat, purge, engender saliva, relieve sore throat, clear throat, invigorate spleen, nourish kidney and revive energy. Used for dry throat, sore throat, foreign body sensation. | ||
| 58 | Inosine Oral Solution | Coenzyme drug, improve metabolism, for various liver and heart diseases, leukocytopenia, thrombocytopenia central retinitis, optic atrophy. | ||
| 59 | Compound Guaiacol Potassium Sulfonale Oral Solution | Relieve cough and phlegm. | ||
| 60 | Xiao’aiping Koufuye | Anticancer, relieve asthma, diminish inflammation. Used for esophageal cancer, gastric cancer, lung cancer, liver cancer, Lymphoma, colon cancer, Cervical cancer, septicemia. Also for radiation treatment, chemotherapy, post-operation treatment, chronic bronchitis, bronchial asthma. | ||
| 61 | Qiangli Pipa Lu | Nourish yin and clear lung heat, relieve cough, eliminate phlegm, repeated cough, bronchitis. | ||
| 62 | Xiao’er Zhike Tangjiang | Clear phlegm and relieve cough. Used for pediatric cough caused by cold. | ||
| 63 | Zhike Pipa Lu | Clear lung heat, relieve cough, eliminate phlegm. cough, phlegm, xerostomia caused by wind-heat. Used for bronchitis cough and pediatric cold. | ||
| 64 | Banxia Tangjiang | Clear cough and reduce phlegm, and bronchitis. | ||
| 65 | Fritillary and Loquat Syrup | Clear heat and ventilate lung, clear phlegm and relieve cough. Used for cough and phlegm, sore and swelling throat, chest distress, cold, chronic bronchitis caused by wind heat invading lung and internal heat. | ||
| 66 | Fei’er Tangjiang | Pediatric nutrient, hypofunction of spleen and stomach, do not feel like eating. | ||
| 67 | Sufei Ke Tangjiang | Cough and phlegm, bronchitis. |
| 68 | Zinc Sulfate Syrup | Anti zinc deficiency drug, used for pediatric slow growth, malnutrition, anorexia, oral ulcer, post-surgery wound healing caused by zinc deficiency. | ||
| 69 | Orange Tincture | Fragrant and promote digestion. | ||
| 70 | Weiling Heji | Nourish yin and blood, soothe nerves. Used for over fatigue, neurasthenia, amnesia and insomnia. | ||
| 71 | Methylrosanilinium Chloride Solution | Sterilization and antisepsis. Used for superficial injury, anabrosis, ulcer and skin infection. | ||
| 72 | Merbromin Solution | Skin mucosa ulcer and injury sterilization. | ||
| 73 | Iodine Tincture | Sterilization and antisepsis. | ||
| 74 | Zingiberis Tincture | Promote digestion and dispel cold. | ||
| 75 | Weiling Heji | Promote digestion, acid-making, kill pain. Used for gastritis, gastric ulcer and duodenal ulcer. |
| 76 | Baixuanxiatare Pian | Clear unusual mucilaginous substance, bile, sepsis, detumescence, antipruritics. Used for tinea manuum, tinea corporis, tinea pedis, tinea versicolor, psoriasis, allergic dermatitis, shingles and acne. | ||
| 77 | Isosor Bide Mononitrate Injection | Long term treatment of coronary heart disease, prevent angina, continuous angina treatment of post myocardial infarction, treat chronic congestive heart disease with digitalis or diuretics. | ||
| 78 | Azithromycin for Injection | Used for infection caused by sensitive strains, like intravenous drip of community-acquired pneumonia caused by Chlamydia pneumoniae, mycoplasma pneumoniae, staphylococcus aureus, streptococcus pneumoniae. | ||
| 79 | Clindamycin Phosphate Injection | Serious infection caused by staphyloccus aureus and anaerobic bacteria. Ideal effect of osteomyelitis caused by sensitive bacteria. | ||
| 80 | Fleroxacin | Mainly used for systematic infection treatment, like acute respiratory infection, urinary infection, gynecological infection, ordinary otolaryngology infection and skin soft tissue infection. | ||
| 81 | Naoxinqing Capsule | Increase pipe, vein and brain blood, improve blood and oxygen supply status of heart and brain tissue, and increase electrophoretic mobility of erythrocyte. Used for coronary heart disease, angina, cerebral arteriosclerosis, ischemic cerebrovascular disease. | ||
| 82 | Weili Capsule | Kill pain and promote circulation, digestion and gall. Used for improper diet, phlegm, vomit, stomachache, bad appetite, constipation, acute gastritis and cholecystitis. | ||
| 83 | Zhiyanxiao Capsule | Clear heat and detoxification, promote circulation, stop bleeding, kill pain and swelling. Used for old patients’ hemorrhoids symptom like dyschizia, hematochezia hemorrhoids inflammation and anal fissure. | ||
| 84 | Yinyangsuo Capsule | Treat renal and impotence, promote body fluid production. Used for impotence, ache and weak at waist and knee, body fluid deficiency, and dizziness. | ||
| 85 | Stanch Capsule | Clear heat and cool blood. Used for menorrhagia, nose bleed, hemoptysis, hematemesis and emptysis caused by blood heat. |
| | JUNE 30, 2010 | DECEMBER 31, 2009 | ||||||
| (UNAUDITED) | (AUDITED) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash & cash equivalents | $ | 6,739,926 | $ | 6,685,630 | ||||
| Accounts receivable, net | 12,150,095 | 3,525,444 | ||||||
| Inventory | 1,594,175 | 396,513 | ||||||
| Prepayment and other receivables | 612,348 | 708,761 | ||||||
| Trade deposit | 92,561 | 2,991,628 | ||||||
| Due from officer | 5,448 | 5,427 | ||||||
| Total current assets | 21,194,554 | 14,313,403 | ||||||
| NONCURRENT ASSETS | ||||||||
| Property and equipment, net | 7,483,727 | 7,686,245 | ||||||
| Construction in progress | 3,386,885 | 3,373,819 | ||||||
| Intangible assets | 8,070,342 | 8,321,329 | ||||||
| Total noncurrent assets | 18,940,954 | 19,381,393 | ||||||
| TOTAL ASSETS | $ | 40,135,508 | $ | 33,694,796 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 1,413,932 | 744,880 | |||||
| Trade deposit received | 4,268 | 83,879 | ||||||
| Short-term bank loans | - | 2,493,692 | ||||||
| Accrued liabilities and other payables | 468,029 | 778,290 | ||||||
| Value-added tax payable | 369,037 | 318,142 | ||||||
| Income tax payable | 996,979 | 651,399 | ||||||
| Total current liabilities | 3,252,246 | 5,070,282 | ||||||
| CONTINGENCIES AND COMMITMENT | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Preferred stock, par value, $0.0001 per share, 20,000,000 shares authorized | - | - | ||||||
| Common stock, par value, $0.0001 per share; 100,000,000 shares authorized, 33,041,677 and 28,000,000 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively | 3,304 | 2,800 | ||||||
| Paid in capital | 8,730,490 | 6,580,150 | ||||||
| Statutory reserve | 2,854,617 | 2,137,797 | ||||||
| Accumulated other comprehensive income | 164,890 | 72,543 | ||||||
| Retained earnings | 25,129,962 | 19,831,224 | ||||||
| Total stockholders' equity | 36,883,263 | 28,624,514 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 40,135,508 | $ | 33,694,796 | ||||
| Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales | $ | 17,500,787 | $ | 9,777,545 | $ | 10,447,588 | $ | 5,084,112 | ||||||||
| Cost of goods sold | 7,186,768 | 3,796,389 | 4,366,590 | 1,867,095 | ||||||||||||
| Gross profit | 10,314,019 | 5,981,156 | 6,080,998 | 3,217,017 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | 2,743,019 | 1,702,652 | (274,756 | ) | 1,127,667 | |||||||||||
| Income from operations | 7,571,000 | 4,278,503 | 6,355,754 | 2,089,349 | ||||||||||||
| Non-operating income (expenses) | ||||||||||||||||
| Interest income | 7,876 | 12,442 | 7,756 | 41 | ||||||||||||
| Interest expense | (29,324 | ) | (57,181 | ) | (29,324 | ) | (57,181 | ) | ||||||||
| Financial expense | (405 | ) | (81,304 | ) | 29,248 | (63 | ) | |||||||||
| Other income | - | 54,692 | - | 54,101 | ||||||||||||
| Total non-operating income (expenses), net | (21,852 | ) | (71,351 | ) | 7,681 | (3,103 | ) | |||||||||
| Income before income tax | 7,549,148 | 4,207,152 | 6,363,435 | 2,086,247 | ||||||||||||
| Income tax | 1,533,594 | 660,448 | 992,068 | 342,312 | ||||||||||||
| Net income | 6,015,553 | 3,546,704 | 5,371,366 | 1,743,935 | ||||||||||||
| Other comprehensive item | ||||||||||||||||
| Foreign currency translation | 92,347 | - | 110,631 | (6,401 | ) | |||||||||||
| Comprehensive Income | $ | 6,107,900 | $ | 3,546,704 | $ | 5,481,997 | $ | 1,737,534 | ||||||||
| Basic weighted average shares outstanding | 31,313,774 | 28,000,000 | 32,459,259 | 28,000,000 | ||||||||||||
| Diluted weighted average shares outstanding | 31,823,802 | 28,000,000 | 33,573,521 | 28,000,000 | ||||||||||||
| Basic earnings per share | $ | 0.19 | $ | 0.13 | $ | 0.17 | $ | 0.06 | ||||||||
| Diluted earnings per share | $ | 0.19 | $ | 0.13 | $ | 0.16 | $ | 0.06 | ||||||||
| CHINA PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2009 AND 2008 | ||||||||
| ASSETS | ||||||||
| 12/31/2009 | 12/31/2008 | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 6,685,630 | $ | 5,049,188 | ||||
| Cash pledged | - | 193,657 | ||||||
| Accounts receivable | 3,525,544 | 5,204,418 | ||||||
| Due from officer | 5,427 | - | ||||||
| Inventories | 396,513 | 249,716 | ||||||
| Prepayments and other receivables | 708,761 | 734,660 | ||||||
| Trade deposit paid | 2,991,628 | 320,780 | ||||||
| Total Current Assets | 14,313,403 | 11,752,419 | ||||||
| Property and equipment, net | 7,686,245 | 8,101,407 | ||||||
| Construction in progress | 3,373,819 | - | ||||||
| Intangible assets, net | 8,321,329 | 7,113,137 | ||||||
| Total Assets | $ | 33,694,796 | $ | 26,966,963 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 744,880 | $ | 1,793,187 | ||||
| Bank acceptance payable | - | 193,657 | ||||||
| Accrued expenses and other payables | 778,290 | 449,561 | ||||||
| Trade deposit received | 83,879 | 179,484 | ||||||
| Short-term bank loans | 2,493,692 | 3,800,058 | ||||||
| Amount due to a shareholder | - | 32,885 | ||||||
| Value-added tax payable | 318,142 | 234,513 | ||||||
| Income tax payable | 651,399 | 314,448 | ||||||
| Total Current Liabilities | 5,070,282 | 6,997,793 | ||||||
| Long-term Liabilities | ||||||||
| Long-term bank loan | - | 292,312 | ||||||
| Total Liabilities | 5,070,282 | 7,290,105 | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, par value, $0.0001 per share 20,000,000 shares authorized, none outstanding Common stock, par value, $0.0001 per share, 100,000,000 shares authorized, 31,675,000 and 31,450,000 shares issued and outstanding | 3,168 | 3,145 | ||||||
| Common stock subscribed, par value, $0.0001 per share, 25,000 and 250,000 shares issued | 2 | 25 | ||||||
| Paid-in capital | 6,580,780 | 6,580,780 | ||||||
| Subscriptions receivable | (1,000 | ) | (10,000 | ) | ||||
| Statutory reserves | 2,137,797 | 1,247,175 | ||||||
| Accumulated other comprehensive loss | 72,543 | 41,266 | ||||||
| Retained earnings | 19,831,224 | 11,814,467 | ||||||
| Total Stockholders’ Equity | 28,624,514 | 19,676,858 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 33,694,796 | $ | 26,966,963 | ||||
| CHINA PHARMACEUTICALS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 | ||||||||
| 2009 | 2008 | |||||||
| Sales, net | $ | 26,708,285 | $ | 18,174,003 | ||||
| Cost of sales | (12,408,035 | ) | (7,090,427 | ) | ||||
| Gross profit | 14,300,250 | $ | 11,083,576 | |||||
| Selling, general and administrative expenses | (3,386,961 | ) | (2,084,026 | ) | ||||
| Income from operations | 10,913,289 | 8,999,550 | ||||||
| Other Income (Expense) | ||||||||
| Interest income | 12,531 | 32,635 | ||||||
| Other income | 145,382 | 13,014 | ||||||
| Interest expense | (350,211 | ) | (407,183 | ) | ||||
| Other expense | (14,900 | ) | (3,687 | ) | ||||
| Total other Income (Expense) | (207,198 | ) | (365,221 | ) | ||||
| Income before income taxes | 10,706,091 | 8,634,329 | ||||||
| Provision for income taxes | (1,798,712 | ) | (1,296,191 | ) | ||||
| Net income | $ | 8,907,379 | $ | 7,338,138 | ||||
| Net income per common share | ||||||||
| Basic | 0.28 | $ | 0.23 | |||||
| Diluted | 0.28 | $ | 0.23 | |||||
| Weighted average common shares outstanding | ||||||||
| Basic | 31,562,500 | 31,350,000 | ||||||
| Diluted | 31,562,500 | 31,350,000 | ||||||
| Net income | $ | 8,907,379 | $ | 7,338,138 | ||||
| Other comprehensive income | 31,277 | 260,635 | ||||||
| Comprehensive income (loss) | $ | 8,938,656 | $ | 7,598,773 | ||||
| CHINA PHARMACEUTICALS, INC. |
| CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY |
| FOR YEARS ENDED DECEMBER 31, 2009 and 2008 |
| Common Stock | Stock subscribed | Paid- in | Subscription | Statutory | Comprehensive Income | Retained | Total Shareholders’ | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | receivable | Reserves | (Loss) | Earnings | Equity | |||||||||||||||||||||||||||||||
| Balance 12/31/2007 | 31,250,000 | $ | 3,125 | $ | 6,070,825 | $ | 576,078 | $ | (219,369 | ) | $ | 5,147,426 | $ | 11,578,085 | ||||||||||||||||||||||||||
| Transfer Reserves | 671,097 | (671,097 | ) | - | ||||||||||||||||||||||||||||||||||||
| Capital Contribution | 200,000 | 20 | 499,980 | 500,000 | ||||||||||||||||||||||||||||||||||||
| Common Subscribed | 250,000 | 25 | 9,975 | (10,000 | ) | - | ||||||||||||||||||||||||||||||||||
| Comprehensive income | 260,635 | 260,635 | ||||||||||||||||||||||||||||||||||||||
| Net Income | 7,338,138 | 7,338,138 | ||||||||||||||||||||||||||||||||||||||
| Balance 12/31/2008 | 31,450,000 | $ | 3,145 | 250,000 | 25 | $ | 6,580,780 | (10,000 | ) | $ | 1,247,175 | $ | 41,266 | $ | 11,814,467 | $ | 19,676,858 | |||||||||||||||||||||||
| Transfer Reserves | 890,622 | (890,622 | ) | - | ||||||||||||||||||||||||||||||||||||
| Capital Contribution | 225,000 | 23 | (225,000 | ) | (23 | ) | 9,000 | 9,000 | ||||||||||||||||||||||||||||||||
| Comprehensive income | 31,277 | 31,277 | ||||||||||||||||||||||||||||||||||||||
| Net Income | 8,907,379 | 8,907,379 | ||||||||||||||||||||||||||||||||||||||
| Balance 12/31/2009 | 31,675,000 | $ | 3,168 | 25,000 | $ | 2 | $ | 6,580,780 | $ | (1,000 | ) | $ | 2,137,797 | $ | 72,543 | $ | 19,831,224 | $ | 28,624,514 | |||||||||||||||||||||
| CHINA PHARMACEUTICALS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 | ||||||||
| 2009 | 2008 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 8,907,379 | $ | 7,338,138 | ||||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation and amortization | 818,446 | 639,339 | ||||||
| Provision for impairment loss on intangible assets | 737,315 | |||||||
| Loss on assets disposed | 6,649 | 12,745 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Cash pledged | 193,657 | (193,657 | ) | |||||
| Accounts receivable | 1,678,874 | (2,866,193 | ) | |||||
| Due from officer | (5,427 | ) | - | |||||
| Prepaid and other receivables | 25,899 | (667,543 | ) | |||||
| Trade deposit paid | (2,670,748 | ) | (55,554 | ) | ||||
| Inventory | (146,797 | ) | 592,354 | |||||
| Accounts payable and accrued expenses | (719,578 | ) | (227,149 | ) | ||||
| Bank acceptance payable | (193,657 | ) | 187,451 | |||||
| Trade deposit received | (95,605 | ) | 100,357 | |||||
| Due to shareholers | (32,885 | ) | 3,537 | |||||
| VAT tax payable | 83,629 | 82,745 | ||||||
| Income tax payable | 336,951 | 304,372 | ||||||
| Total adjustment | 16,723 | (2,087,196 | ) | |||||
| Net cash provided by (used in) operating activities | 8,924,102 | 5,250,942 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property & equipment | (12,697 | ) | (10,041 | ) | ||||
| Construction in progress | (3,373,819 | ) | - | |||||
| Intangible assets | (2,342,743 | ) | (2,612,990 | ) | ||||
| Proceeds of assets disposed | - | 15,562 | ||||||
| Net cash used in Investing activities | (5,729,259 | ) | (2,607,469 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Borrowings from short-term bank loan | 2,903,036 | 3,536,818 | ||||||
| Repayment of short-term bank loan | (4,501,714 | ) | (3,678,291 | ) | ||||
| Proceeds of issuance of stock | 9,000 | 500,000 | ||||||
| Net cash provided by (used in) financing activities | (1,589,678 | ) | 358,527 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 31,277 | 236,224 | ||||||
| Net Increase (Decrease) in cash and cash equivalents | 1,636,442 | 3,238,224 | ||||||
| Cash and cash equivalents, beginning balance | 5,049,188 | 1,810,964 | ||||||
| Cash and cash equivalents, ending balance | 6,685,630 | $ | 5,049,188 | |||||
| SUPPLEMENTAL DISCLOSURES: | ||||||||
| Interest payments | 345,490 | $ | 407,183 | |||||
| Income tax payments | 1,147,313 | $ | 991,820 | |||||
