AMDL Signs Letter of Intent to Purchase China-Based Pharmaceutical Distribution Company
July 01 2008 - 6:00AM
PR Newswire (US)
TUSTIN, Calif., July 1 /PRNewswire-FirstCall/ -- AMDL, Inc.
(AMEX:ADL), a leading vertically integrated bio-pharmaceutical
company headquartered in Tustin, California, with major operations
in the U.S. and China, announced today a letter of intent (LOI) has
been signed between AMDL's wholly-owned subsidiary Jade
Pharmaceutical Inc. (JPI) and China-based Sichuan ZhiTong
Pharmaceutical, Ltd. (SZP). SZP is a privately-held China-based
pharmaceutical distribution company that sells and distributes
traditional Chinese medicines, health foods, medical equipment, and
generic pharmaceutical products. SZP has been a distributor for
AMDL since the fourth quarter of 2007, selling the company's
Domperidone anti-emetic product. SZP sells approximately $100,000
per month of Domperidone and AMDL expects these sales levels to
increase to at least $200,000 per month over the next 60 days for
this product due to increased marketing efforts. Under the terms of
the LOI, SZP and JPI will consolidate sales forces and enter into a
distribution agreement where SZP will distribute additional AMDL
pharmaceutical products including GoodNak, Levofloxicin and
Ondansetron. SZP currently employs approximately 80 in-house sales
agents. AMDL, JPI and SZP have agreed to retain an independent
China-based business valuation company to determine the value of
SZP. Based upon that valuation and negotiations between JPI and
SZP, an acquisition price will be determined and acquisition
consideration will be allocated that may include cash, common stock
of AMDL, and/or stock options to purchase common shares of AMDL.
Prior to signing the definitive agreement, SZP and JPI have agreed
to engage an international accounting firm to complete a two-year
audit of SZP in accordance with GAAP accounting standards. Prior to
executing a Definitive Agreement, both JPI and SZP will work
together to create a new two-year business plan and capital budget.
In FY2007, SZP had gross sales of approximately $24 million and
anticipates FY2008 sales of $35.7 million with approximately 10%
net after-tax profit margins. Subject to due diligence by JPI and
other conditions, JPI may acquire up to 100 percent ownership in
SZP. Best efforts will be made by both JPI and SZP to complete the
purchase of SZP by October 1, 2008. AMDL has terminated a
previously announced LOI to acquire Guangzhou Lazon Pharmacy Co.,
Ltd. (GLP), a Guangzhou-based distributor based on material
uncovered through the due diligence process. About AMDL: AMDL, Inc.
is a specialty pharmaceutical company. The Company is headquartered
in Tustin, California with operations in Shenzhen, Jiangxi, and
Jilin, China. Along with its subsidiary Jade Pharmaceutical Inc.
(JPI), AMDL is devoted to the research, development, manufacturing,
and marketing of diagnostic, pharmaceutical, nutritional
supplement, and cosmetic products currently in China. The company
employs approximately 320 people in the U.S. and China. More
information about AMDL and its products can be obtained at
http://www.amdl.com/. About Jade Pharmaceutical: JPI has access to
the fastest growing pharmaceutical and consumer market in the
world: China. AMDL, through its subsidiary Jade, currently
manufactures large volume injection fluids, tablets and other
related products, holding licenses for 133 products. It also
manufactures 107 generic, over the counter and supplemental
pharmaceutical products under certified Chinese Good Manufacturing
Practice (CGMP) standards. Statements in this press release may
constitute forward-looking statements and are subject to numerous
risks and uncertainties, including the failure to complete
successfully the development of new or enhanced products, the
Company's future capital needs, the lack of market demand for any
new or enhanced products the Company may develop, any actions by
the Company's partners that may be adverse to the Company, the
success of competitive products, other economic factors affecting
the Company and its markets, and other risks detailed from time to
time in the Company's filings with the Securities and Exchange
Commission. The actual results may differ materially from those
contained in this press release. The Company disclaims any
obligation to update any statements in this press release. Contact:
AMDL Communications Kristine Szarkowitz 206/310-5323 DATASOURCE:
AMDL, Inc. CONTACT: Kristine Szarkowitz of AMDL Communications,
+1-206-310-5323, Web site: http://www.amdl.com/
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