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
COMMISSION FILE NO.: 0-24185
Date of Report: July 31, 2006
CHINA AOXING PHARMACEUTICAL COMPANY, INC.
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(Exact name of registrant as specified in its charter)
Florida 65-0636168
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(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 Wall Street, 15th Floor, New York, NY 10005
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(Address of principal executive offices) (Zip Code)
(212) 232-0120 ext. 221
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(Registrant's telephone number including area code)
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:
[ ] 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 2.01 Completion of Disposition of Assets
On July 31, 2006 the Registrant sold the entire equity interest in the
following entities, each of which is a corporation organized under the laws
of the Republic of Costa Rica:
Hotelera Cal Tico, S.A.
Hotelero del Sol Marino FM, S.A.
Sociedad Protectora De La Fuana y Flora Maritima De Mal Pais, S.A.
Ecoprojecto San Luis, S.A.
Confluencia San Luis, S.A.
Corporacion Muxia, S.A.
The purchasers were Richard Wm. Talley, Michael Caggiano and P. James Voloshin,
each of whom was a member of the Registrant's Board of Directors until April
18, 2006. The purchase occurred after the purchasers exercised an option to
purchase the entities that was given to them on March 13, 2006. The purchase
price was $300,000. The purchasers obtained the funds by selling shares of the
Registrant's common stock to Warner Technology & Investment Corp.
Item 9.01 Financial Statements and Exhibits
Financial Statements
Pro Forma Financial Statements - annexed hereto.
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.
China Aoxing Pharmaceutical Company, Inc.
Dated: August 3, 2006 By: /s/ Zhenjiang Yue
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Zhenjiang Yue, Chief Executive Officer
* * * * *
CHINA AOXING PHARMACEUTICAL COMPANY, INC.
Unaudited Pro Forma Condensed Financial Statements
The following unaudited pro forma condensed financial statements give effect
to sale by China Aoxing Pharmaceutical Company, Inc. on July 31, 2006 of the
following subsidiaries: Hotelera Cal Tico, S.A., Hotelero del Sol Marino FM,
S.A., Sociedad Protectora De La Fuana y Flora Maritima De Mal Pais, S.A.,
Ecoprojecto San Luis, S.A., Confluencia San Luis, S.A., and Corporacion Muxia,
S.A.
The columns within the pro forma condensed financial statements, from right
to left, provide the following information:
China Aoxing Pharmaceutical Co., Inc. presents the historical balance
sheet and operating results of Ostar Pharmaceutical, Inc., which was
merged into a subsidiary of the Registrant on April 18, 2006 in a
transaction accounted for as a reverse merger.
Central American Equities Corp and Subsidiaries presents the historical
balance sheet and operating results of the Registrant prior to the reverse
merger with Ostar Pharmaceutical, Inc.
Proforma Adjustments presents the adjustments required to reflect the
sale of the six subsidiaries on July 31, 2006.
Proforma presents the balance sheets and operating statements of the
Registrant, taking into account the Proforma Adjustments.
The unaudited proforma statements of operations give effect to the sale of
the subsidiaries as if it had happened on July 1, 2004.
Management believes that the assumptions used provide a reasonable basis on
which to present the unaudited pro forma financial data. The unaudited pro
forma financial data may not be indicative of the financial condition or
results that would have occurred if the transaction had been in effect on the
dates indicated or which may be obtained in the future.
CHINA AOXING PHARMACEUTICAL CO., INC.
MARCH 31, 2006
PROFORMA BALANCE SHEETS
(U.S. $)
Central
American
Equities China Aoxing
Proforma Corp. And Pharmaceutical
Proforma Adjustments Subsidiaries Co., Inc.
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ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 71,672 $ (19,511) $ 19,511 $ 71,672
Accounts receivable - (107,767) 107,767 -
Inventory - (33,497) 33,497 -
Other receivables 72,343 - - 72,343
Prepaid expenses and
sundry current assets 56,204 (155) 155 56,204
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TOTAL CURRENT ASSETS 200,220 (160,930) 160,930 200,220
PROPERTY AND EQUIPMENT,
NET OF ACCUMULATED
DEPRECIATION 17,884,118 (5,286,723) 5,286,723 17,884,118
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TOTAL ASSETS $18,084,338 $(5,447,653) $5,447,653 $ 18,084,338
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 793,119 $ (114,809) $ 114,809 $ 793,119
Due to stockholders 69,164 (184,596) 184,596 69,164
Due to officers 39,931 - - 39,931
Current portion of
long-term debt 3,235,763 (88,000) 88,000 3,235,763
Accrued expenses and
sundry current
liabilities 1,176,994 (218,223) 218,223 1,176,994
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TOTAL CURRENT
LIABILITIES 5,314,971 (605,628) 605,628 5,314,971
LONG-TERM DEBT 7,870,370 (68,661) 68,661 7,870,370
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TOTAL LIABILITIES 13,185,341 (674,289) 674,289 13,185,341
STOCKHOLDERS' EQUITY
Common stock 7,240,693 (2,142) 2,142 7,240,693
Additional paid in
capital - (10,422,738) 10,422,738 -
Other comprehensive
income 173,612 (60,320) 60,320 173,612
Deficit accumulated
during development
stage (2,515,308) 5,711,836 (5,711,836) (2,515,308)
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TOTAL STOCKHOLDERS'
EQUITY 4,898,997 (4,773,364) 4,773,364 4,898,997
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $18,084,338 $(5,447,653) $ 5,447,653 $ 18,084,338
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CHINA AOXING PHARMACEUTICAL CO., INC.
JUNE 30, 2005
PROFORMA BALANCE SHEETS
(U.S. $)
Central
American
Equities China Aoxing
Proforma Corp. And Pharmaceutical
Proforma Adjustments Subsidiaries Co., Inc.
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ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 36,993 $ (115,806) $ 115,806 $ 36,993
Accounts receivable - (93,013) 93,013 -
Inventory - (23,794) 23,794 -
Other receivables 7,529 - - 7,529
Prepaid expenses and
sundry current assets 135,953 (868) 868 135,953
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TOTAL CURRENT ASSETS 180,475 (233,481) 233,481 180,475
PROPERTY AND EQUIPMENT,
NET OF ACCUMULATED
DEPRECIATION 17,513,036 (5,430,644) 5,430,644 17,513,036
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TOTAL ASSETS $17,693,511 $(5,664,125) $5,664,125 $17,693,511
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 759,023 $ (72,366) $ 72,366 $ 759,023
Due to stockholders 20,551 - - 20,551
Due to officers 19,412 (90,315) 90,315 19,412
Current portion of
long-term debt 511,676 (88,000) 88,000 511,676
Accrued expenses and
sundry current
liabilities 525,348 (139,340) 139,340 525,348
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TOTAL CURRENT
LIABILITIES 1,836,010 (563,197) 563,197 1,836,010
LONG-TERM DEBT 10,016,291 (173,176) 173,176 10,016,291
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TOTAL LIABILITIES 11,852,301 (563,197) 563,197 11,852,301
STOCKHOLDERS' EQUITY
Common stock 7,240,693 (2,142) 2,142 7,240,693
Additional paid in
capital - (10,400,016) 10,400,016 -
Other comprehensive
income (86) (35,914) 35,914 (86)
Deficit accumulated
during development
stage (1,399,397) 5,337,144 5,337,144 (1,399,397)
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TOTAL STOCKHOLDERS'
EQUITY 5,841,210 (5,100,928) 5,100,928 5,841,210
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $17,693,511 $ (5,664,125) $5,664,125 $17,693,511
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CHINA AOXING PHARMACEUTICAL CO., INC.
MARCH 31, 2006
PROFORMA STATEMENT OF OPERATIONS
(U.S. $)
Central
American
Equities China Aoxing
Proforma Corp. And Pharmaceutical
Proforma Adjustments Subsidiaries Co., Inc.
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REVENUE $ - $ (1,045,545) $ 1,045,545 $ -
COST OF SERVICE - (305,357) 305,357 -
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GROSS PROFIT - (740,188) 740,188 -
COSTS AND EXPENSES:
General and admini-
strative expenses 1,008,471 (752,464) 752,464 1,008,471
Depreciation - (126,921) 126,921 -
Research and
development costs 107,441 - - 107,441
Interest expense - (21,435) 21,435 -
Past tax-due penalties - (214,059) 214,059 -
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TOTAL COSTS AND
EXPENSES 1,115,912 (1,114,879) 1,114,879 1,115,912
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NET INCOME (LOSS) $(1,115,912) $ 374,691 $ (374,691) $ (1,115,912)
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CHINA AOXING PHARMACEUTICAL CO., INC.
JUNE 30, 2005
PROFORMA STATEMENT OF OPERATIONS
(U.S. $)
Central
American
Equities China Aoxing
Proforma Corp. And Pharmaceutical
Proforma Adjustments Subsidiaries Co., Inc.
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REVENUE $ - $ (1,263,257) $ 1,263,257 $ -
COST OF SERVICE - (333,457) 333,457 -
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GROSS PROFIT - (929,800) 929,800 -
COSTS AND EXPENSES
(INCOME):
General and admini-
strative expenses 722,574 (812,914) 812,914 722,574
Depreciation - (171,164) 171,164 -
Research and development
costs 29,464 - - 29,464
Interest expense
(Income) (12,307) (61,993) 61,993 (12,307)
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TOTAL COSTS AND EXPENSES 739,731 (1,046,071) 1,046,071 739,731
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NET INCOME (LOSS) $(739,731) $ 116,271 $ (116,271) $ (739,731)
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