EXHIBIT 99.3
PRO FORMA COMBINED BALANCE SHEET AND STATEMENT OF OPERATIONS FOR
ZHEJIANG UNIVERSITY PHARMACEUTICAL CO., LTD. AND
CHINA PHARMACEUTICALS CORPORATION AS OF MARCH 31, 2004
AND FOR THE THREE MONTHS THEN ENDED AND STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
CHINA PHARMACEUTICALS CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The accompanying pro forma consolidated financial statements present the
historical financial information of China Pharmaceuticals Corporation ("China
Pharma"), as adjusted for the acquisition of Zhejiang University Pharmaceutical
Co., Ltd ("Zheda Pharmacy"), pursuant to an Agreement and Plan of Reorganization
entered into between China Pharma and Zheda Pharma dated as of February 26,
2004. For financial reporting purposes, the business combination is to be
accounted for as an additional capitalization of China Pharma (a reverse
acquisition with Zheda Pharmacy as the acquirer). The operations of Zheda
Pharmacy will be the continuing operations of China Pharmaceuticals Corporation.
The accompanying pro forma consolidated balance sheet presents the historical
financial information of China Pharma as of March 31, 2004, as adjusted for the
acquisition of Zheda Pharmacy, accounted for as a reverse acquisition.
The accompanying pro forma consolidated statement of operations for the year
ended December 31, 2003 combines the historical financial information of Zheda
Pharmacy for the year ended December 31, 2003, as if the acquisition had
occurred at the beginning of the year. The accompanying pro forma consolidated
statement of operations for the three months ended March 31, 2004, as if the
acquisition had occurred at the beginning of the period.
The pro forma consolidated financial statements have been prepared by
management, based on the historical financial statements of China Pharma and
Zheda Pharmacy. These pro forma consolidated financial statements may not be
indicative of the results that actually would have occurred if the combination
had been in effect on the dates indicated or which may be obtained in the
future. The pro forma consolidated financial statements should be read in
conjunction with the historical financial statements of Zheda Pharmacy for the
first quarter ended March 31, 2004 and year ended December 31, 2003, included
elsewhere in this filing on Form 8K/A, and for China Pharma which are included
in the companies SEC Filings.
CHINA PHARMACEUCTICAL CORPORATION
ZHEJIANG UNIVERSITY PHARMACEUTICAL CO., LTD.
PROFORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONSOLIDATED BALANCE
MARCH 31, 2004
CHINA ZHEDA PROFORMA NOTES PRO FORMA
(HISTORICAL) ADJUSTMENTS COMBINED
ASSETS
CURRENT ASSETS
Cash $ 3,685 $ 4,026,320 $ 4,030,005
Short Term Investments - -
Accounts Receivable 964,875 964,875
Prepayments 1,659,900 1,659,900
Interest Receivable 62,332 62,332
Loans Receivable and other Receivables 2,540,160 2,540,160
Inventories - 332,516 332,519
---------------------------------- -------------
Total Current Assets 3,685 9,586,103 9,589,788
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Advances due from Related Parties 77,007 - 77,007
Property, Plant and equipment, net 83,533 1,614,549 1,698,082
Construction in Progress 5,898,191 5,898,191
Long Term Investments 250 1,088,640 1,088,890
Intangible assets, net 882,117 882,117
---------------------------------- -------------
TOTAL $ 164,475 $ 19,069,600 $ 19,234,075
================================== =============
CURRENT LIABILITIES
Short Term Debt $ - $ 2,661,120 $ 2,661,120
Accounts payable 54,696 429,165 $ (54,696) 3 429,165
Notes payable-related 434,637 1,532,805 (235,304) 3 1,732,138
Accrued changes and other payables - 924,113 924,113
Income Tax Payable - 29,052 29,052
---------------------------------- -------------
Total Current Liabilities 489,333 5,576,255 5,775,588
---------------------------------- -------------
LONG TERM LIABILITIES
Long Term Loan - 6,048,000 6,048,000
---------------------------------- -------------
Total Long Term Liabilities - 6,048,000 6,048,000
TOTAL LIABILITIES 489,333 11,624,255 11,823,588
================================== =============
STOCKHOLDERS' EQUITY
Preferred Stock - -
Common Stock 820,843 9,676,800 (10,493,026) 4 4,617
Additional Paid in Capital 3,800,406 - 5,836,919 3,4 9,637,325
Deficit accumulated during the
development stage (4,946,107) (2,231,455) 4,946,107 4 (2,231,455)
----------------------------------
TOTAL STOCKHOLDERS EQUITY (324,858) 7,445,345 7,410,487
---------------------------------- -------------
TOTAL LIABILITIES AND STOCK $ 164,475 $ 19,069,600 $ 19,234,075
================================== =============
CHINA PHARMACEUCTICAL CORPORATION
ZHEJIANG UNIVERSITY PHARMACEUTICAL CO., LTD.
PROFORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONSOLIDATED INCOME STATEMENT
MARCH 31, 2004
CHINA ZHEDA PROFORMA NOTES PRO FORMA
(HISTORICAL) ADJUSTMENTS COMBINED
REVENUE $ - $ 1,066,094 $ 1,066,094
COST OF REVENUE - 1,049,349 1,049,349
---------------------------------- ---------------
GROSS MARGIN - 16,745 16,745
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OPERATING EXPENSES
General and administrative 37,184 159,902 197,086
Research and Development - 46,414 46,414
Depreciation, depletion and amortization 19,717 - 19,717
---------------------------------- ---------------
TOTAL OPERATING EXPENSES 56,901 206,316 263,217
---------------------------------- ---------------
OTHER INCOME (EXPENSE)
Interest Income from Loans Receivable - 62,332 62,332
Bank Interest Income - 3,915 3,915
Interest expense - (37,307) (37,307)
Other (expense) income, net - 5,376 5,376
---------------------------------- ---------------
TOTAL OTHER INCOME (EXPENSE) - 34,316 34,316
---------------------------------- ---------------
Provision for Income Tax - 4,252 4,252
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NET (LOSS) $ (56,901) $ (159,507) $ (216,408)
================================== ===============
PROFORMA NET (LOSS) PER
COMMON SHARE $ (0.005)
===============
NUMBER OF COMMON SHARES
OUTSTANDING AFTER ACQUISITION 46,160,733
===============
CHINA PHARMACEUCTICAL CORPORATION
ZHEJIANG UNIVERSITY PHARMACEUTICAL CO., LTD.
PROFORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONSOLIDATED INCOME STATEMENT
DECEMBER 31, 2003
CHINA ZHEDA PROFORMA NOTES PRO FORMA
(HISTORICAL) ADJUSTMENTS COMBINED
REVENUE $ 882,767 $ 119,714 $ 1,002,481
COST OF REVENUE 687,751 217,597 905,348
---------------------------------- --------------
GROSS MARGIN 195,016 (97,883) 97,133
---------------------------------- --------------
OPERATING EXPENSES
General and administrative 568,613 689,886 1,258,499
Research and Development - 259,099 259,099
Depreciation, depletion and amortization 94,455 - 94,455
---------------------------------- --------------
LOSS FROM OPERATIONS (468,052) (1,046,868) (1,514,920)
---------------------------------- --------------
OTHER INCOME (EXPENSE)
Interest Income from Loans Receivable 50,164 497,789 547,953
Bank Interest Income - 15,721 15,721
Interest expense - (236,152) (236,152)
Other (expense) income, net (156,046) (19,584) (175,630)
---------------------------------- --------------
TOTAL OTHER INCOME (EXPENSE) (105,882) 257,774 151,892
---------------------------------- --------------
Provision for Income Tax 4,252 4,252
----------------------------------
NET (LOSS) $ (573,934) $ (789,094) $ (1,363,028)
================================== ==============
PROFORMA NET (LOSS) PER
COMMON SHARE $ (0.030)
==============
NUMBER OF COMMON SHARES
OUTSTANDING AFTER ACQUISITION 46,160,733
==============
CHINA PHARMACEUTICALS CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying pro forma consolidated financial statements are presented to
reflect the acquisition of Zhejiang University Pharmaceutical Co., Ltd. a
Sino-foreign equity joint venture ("Zheda Pharmacy"), accounted for as a reverse
acquisition, with the operations of Zheda Pharmacy being the continuing
operations of the combined entities under the name China Pharmaceuticals
Corporation ("China Pharma"). China Pharmaceuticals Corporation operated and
reported as Wilmington Rexford, Inc. from February of 2001 until it changed its
name to China Pharmaceuticals Corporation on March 25, 2004.
The accompanying pro forma consolidated balance sheet as of March 31, 2004 has
been prepared to give effect to the acquisition of Zheda Pharmacy by China
Pharma as if the acquisition occurred on March 31, 2004. The accompanying pro
forma consolidated statements of operations combines the historical operations
of Zheda Pharmacy and China Pharma for the period ended March 31, 2004 and the
year ended December 31, 2003 as if the acquisition had occurred at the beginning
of each of the periods presented.
NOTE 2 - (LOSS) PER COMMON SHARE
Pro forma loss per common share for the period ended March 31, 2004 and year
ended December 31, 2003 is computed based on the number of common shares
outstanding on a post merger basis during the periods, assuming that the
46,160,733 shares of China Pharmaceuticals Corporation were outstanding as of
the date the reverse acquisition was completed and all debt was converted as of
the beginning of each of the periods presented.
NOTE 3 - TRANSACTION CONVERSION
On May 24, 2004, the registrant issued 31,151,780 shares to China Merchant
DiChain Investment Holdings Limited and its designees for $290,000 and its
continued capital contribution towards the combined company.
NOTE 4 - RECAPITALIZATION ADJUSTMENTS
On May 23, 2004, China Pharmaceuticals Corporation signed a Share Exchange
Agreement for the acquisition of 87.475% of the outstanding common stock of
Zheda. Thus, a transfer in control occurred. The transaction is accounted for as
a reverse acquisitionon wherein Zheda is the accounting acquirer and China
Pharmaceuticals Corporation is the legal acquirer. Accordingly the accounting
acquirer properly recorded the assets purchased and liabilities assumed as part
of the reverse acquisition and the entire stockholders equity section of the
legal acquirer is eliminated. Common Stock of the accounting acquirer remained
intact due to the part value of 0.0001 remaining in effect after the merger.
This transaction was accounted for under APB "Accounting Principals Board"
pronouncement #16 ands SFAS "Statement Financial Accounting Standards" #142.