UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest event Reported): March 31, 2011
( March 30, 2011)
CHINA BIOLOGIC PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware
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001-34566
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75-2308816
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(State or other jurisdiction of
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(Commission File No.)
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(IRS Employer ID No.)
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incorporation or organization)
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No. 14 East Hushan Road,
Tai'an City, Shandong,
271000
People's Republic of China
(Address of Principal
Executive Offices)
86-538 -620-2306
Registrant's telephone number,
including area code
____________________________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (
see
General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
ITEM 4.02: NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL
STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
On March 30, 2011, the management
and the Audit Committee (the Audit Committee) of China Biologic Products, Inc.
(the Company) determined that the Companys previously issued financial
statements for the year ended December 31, 2009 (the 2009 Financial
Statements), and its unaudited financial statements for the periods ended March
31, 2009, June 30, 2009, September 30, 2009, March 31, 2010, June 30, 2010 and
September 30, 2010 (together with the 2009 Financial Statements, the Prior
Financial Statements) should not be relied upon. In addition, the Companys
prior related earnings and news releases and similar communications should no
longer be relied upon to the extent they relate to the Prior Financial
Statements.
During the year-end closing
process for fiscal year 2010 and in the course of preparing the Companys
consolidated financial statements to be included in the Companys annual report
on Form 10-K for the year ended December 31, 2010, management identified
misstatements in the application of certain accounting practices and procedures,
including (i) valuation of fair value callable feature embedded in warrants
issued on July 19, 2006 (the 2006 Warrants) and (ii) recognition of deferred
tax liabilities upon the acquisition of Guiyang Dalin Biologic Technologies Co.,
Ltd. in 2009 (the Dalin Acquisition).
We expect that the restatement
will not have an effect on the Companys liquidity, cash resources, or future
business operations because they are all noncash adjustments. The Company intends to promptly file amendments to its
periodic reports described above that have previously been filed with the SEC to
reflect the matters discussed in this Item 4.02.
Recognition of fair value of the callable feature of the
2006 Warrants
In 2006, the Company issued
1,070,000 warrants to certain accredited investors. Under the 2006 Warrants,
upon the satisfaction of certain requirements, the Company may, in its sole
discretion, elect to require holders of the 2006 Warrants to exercise up to all
of the unexercised portion of the 2006 Warrants (the Callable Feature). The
Company inadvertently omitted the fair value of the Callable Features embedded in
the 2006 Warrants when reclassifying the fair value of the 2006 Warrants from
equity to derivative liabilities as of January 1, 2009. In addition, the Company
inadvertently omitted recognizing the impact of fair value change arising from the Callable
Feature in estimating the fair value of the 2006 Warrants during 2009. The
primary effect of such recognition of fair value of the Callable Feature on the
2009 Financial Statements will be as follow:
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the retained earnings and additional paid-in capital will each increase by
$535,615 and $138,160; and the derivative liabilities will decrease by
$673,775 as of January 1, 2009;
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the loss of change in fair value of derivative liabilities during the year
ended December 31, 2009 will decrease by $710,861; the retained earnings will
increase by $1,246,476 and additional paid-in capital will decrease by
$1,246,476 as of December 31, 2009.
Recognition of deferred tax liabilities upon the Dalin
Acquisition
In connection with the Dalin
Acquisition, the Company misinterpreted the U.S. Generally Accepted Accounting
Principals regarding recognition of deferred tax liabilities for the differences
between the assigned values and the tax bases of the intangible assets and
certain property, plant and equipment acquired in the Dalin Acquisition in
accordance with ASC Topic 740,
Income Taxes
. In addition, during the year
ended December 31, 2009, the Company also should have recorded deferred tax
benefit representing the tax effect of the amortization of intangible assets and
the depreciation of property, plant and equipment acquired in Dalin Acquisition
for the year ended December 31, 2009. The primary effect of such recognition of
deferred tax liabilities on the 2009 Financial Statements will be as follow:
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the company will recognize a deferred tax liabilities of $4,749,099 with a
corresponding increase in goodwill of $4,749,099 as of January 1, 2009;
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the goodwill, deferred tax liabilities, retained earnings, noncontrolling
interest and accumulated other comprehensive income of the Company will each
increase by $4,775,139, $4,275,295, $232,368, $267,333 and $143 as of December
31, 2009.
The Audit Committee has discussed
the matters disclosed in this Form 8-K with KPMG, the Companys current
independent registered public accounting firm since December 22, 2010. The
Company chief executive officer and chief financial officer have discussed the
matters disclosed in this Form 8-K with Frazer Frost, LLP, the Companys
previous independent registered public accounting firm.
Forward-Looking Statements
When used in this Form 8-K, in
future filings with the SEC, in press releases or other public or shareholder
communications, or in oral statements made with the approval of an authorized
executive officer, the words or phrases will likely result, are expect to,
will continue, is anticipated, estimate, project, believe, should,
may, will, plan, or variations of such terms or similar expressions are
intended to identify forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors,
which may cause our actual results to be materially different from those
indicated. Such statements are subject to certain risks and uncertainties,
including those discussed in the Companys periodic reports that are filed with
the Securities and Exchange Commission, which are available on its website at
http://www.sec.gov
, that could cause actual results to differ materially
from historical earnings and those presently anticipated or projected. We
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. We undertake no obligation to
publicly release the result of any revisions that may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 31, 2011
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CHINA BIOLOGIC PRODUCTS, INC.
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By:
/s/ Chao Ming
Zhao
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Chao Ming Zhao
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Chief Executive Officer
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