UPDATE ON SINOBIOMED?S AGREEMENT TO ACQUIRE CHINESE PHARMACEUTICAL DISTRIBUTOR FOR USD $2.4 MILLIONDistribution Agreement |
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PRESS RELEASE
FOR IMME
DIATE RELEASE
UPDATE ON SINOBIOMED’S AGREEMENT TO ACQUIRE
CHINESE
PHARMACEUTICAL DISTRIBUTOR FOR USD $2.4
MILLION
ACQUISITION GIVES
SINOBIOMED CONTROL OF
OF
SUZHOU BOAI,
SFDA
GSP-CERTIFIED PHARMACEUTICAL
DISTRIBUTOR THAT EXPANDS MARKET REACH IN
CHINA
Shanghai,
China - August 14, 2007 - Sinobiomed Inc. ("Sinobiomed", or
"the Company") (OTCBB: SOBM) is pleased to announce that its
82% owned subsidiary, Shanghai Wanxing Bio-pharmaceuticals
Co., Ltd. ("Shanghai Wanxing"), signed a formal Equity
Transfer Contract on August 6, 2007 with the equity owners of
Suzhou Boai Medical Development Company ("Suzhou Boai") to
acquire a 90% interest in Suzhou Boai, a pharmaceutical
distribution firm.
Under
the contract, all the equity owners of Suzhou Boai will
transfer all of their equity to Shanghai Wanxing, except for
one equity owner who will retain a 10% interest, for a
transfer price of approximately USD$2.4 million.
Shanghai
Wanxing paid the first 30% of the transfer price on August 7,
2007, which was to be paid within three days of signing the
Equity Transfer Contract. In addition, the Equity Transfer
Contract requires that Shanghai Wanxing pay 55% of the
transfer price one week after registration of the equity
alteration and 15% of the transfer price six months after
registration of the equity alteration. However, Shanghai
Wanxing reserves the right to reduce the final payment by the
amount of any uncollectible receivables and other bad debts
that occurred prior to June 30, 2007.
The
transfer, when complete, gives Shanghai Wanxing control of
Suzhou Boai, which is GSP certified by the Chinese State Food
and Drug Administration (SFDA). GSP stands for Good Supply
Practice, and certification safeguards the safety and quality
of pharmaceutical products in business
transactions.
In
recent years China has made significant regulatory changes in
an effort to modernize its pharmaceutical industry and bring
it in line with international standards. These include
reorganizing the former State Drug Administration into the
SFDA based on the U.S. Food and Drug Administration (FDA)
model, thoroughly amending drug regulation and enhancing
intellectual property protection.
According
to management prepared financial statements, Suzhou Boai's
2006 total sales revenue
