BEIJING, Jan. 4, 2012 /PRNewswire-Asia-FirstCall/ -- Lotus
Pharmaceuticals, Inc. (OTCBB: LTUS) ("Lotus" or the "Company"), a
profitable developer, manufacturer and seller of medicine and drugs
in the People's Republic of China
("PRC"), today announced it entered into an agreement to dispose
its Inner Mongolia branch company, including land use right for the
1000 Mu (approximately 165 acre) land in Inner Mongolia, in order
to focus its business on the Beijing wholesale market.
Pursuant to the agreement with Meng Xin Vegetable Product
Company (Meng Xin), the previous
owner of the land use right for this tract of land, Lotus
Pharmaceuticals will transfer ownership of Liang Fang
Pharmaceutical, Ltd. Inner Mongolia branch company and certain assets and
liabilities to Meng Xin. The assets,
valued at approximately $52.6 million
(based on RMB6.298/$), include the
entire 1000 Mu land and building thereon (valued at approximately
$44.5 million), approximately
$7.3 million of account receivables,
and three retail drug stores in Beijing (Feng
Tai store, Yong An Zhong
Sheng store, and He Ping Li store). The liabilities, also
valued at approximately $52.6
million, include all tax payable and late payment fees, land
use taxes and compensation to farmers which are collected
retroactively, unpaid utilities and sewage, as well as management
fees to the local government. Meng
Xin will receive the assets and assume the liabilities after
the transaction. There is no cash payment between Lotus and
Meng Xin.
Chairman and Chief Executive Officer Mr. Zhongyi Liu stated, "Because we have not
undertaken development of the 1000 Mu land in Inner Mongolia as
stipulated in the original agreement when we made the purchase in
2008, we are subject to some significant taxes and penalties, which
are collected retroactively. As a result, we could not afford to
hold the land any more. In addition, our decision to dispose of the
Inner Mongolia branch and the 1000 Mu land is based on our
strategic decision to focus on the Beijing wholesale market once the headquarters
building is put into use. The transaction enables us to reduce
current liabilities, which is very important to us as our resources
are currently tied to the operation of the new headquarters
building in Beijing."
Separately, the Company started moving into its new headquarters
building in Beijing's Chaoyang
district at the end of December 2011.
This over 34,000 square meter multi-story building will host the
Company's key divisions, including manufacturing, R&D, sales
and marketing, storage warehouse, and administrative offices. The
Company expects the new storage warehouse to become functional by
March 2012.
Mr. Liu commented, "We expect the storage warehouse in the new
headquarters building will be put into use by March, and the
manufacturing facility by the end of Q3 of 2012, after inspection
and certification are completed. With these new facilities, we
anticipate additional capacity for growth and significant
efficiency improvements in the coming years."
About Lotus Pharmaceuticals, Inc.
Lotus Pharmaceuticals, Inc. is a profitable developer and
producer of drugs and a licensed national seller of pharmaceutical
items in the People's Republic of
China (PRC). Lotus operates its business through its two
controlled entities: Liang Fang Pharmaceutical, Ltd. and En Ze Jia
Shi Pharmaceutical, Ltd. Lotus' current drug development is focused
on the treatment of cerebro-cardiovascular diseases, asthma and
diabetes. Liang Fang sells drugs
directly and indirectly through its national sales channels to
hospitals, clinics and drugs stores in 30 provinces of the PRC.
Information Regarding Forward-Looking Statements
Except for historical information contained herein, the
statements in this press release are forward-looking statements
that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which
may cause our actual results in future periods to differ materially
from forecasted results. These risks and uncertainties include,
among other things, product demand, market competition, and risks
inherent in our operations. These and other risks are described in
our filings with the U.S. Securities and Exchange
Commission.
Contacts:
Xing Shen, Ph.D.
VP of Corporate Development
Lotus Pharmaceuticals, Inc.
Ph: 415-690-7688
Email: shen@lotuspharma.com
Web: http://www.lotuspharma.com
SOURCE Lotus Pharmaceuticals, Inc.