GUANGZHOU, China, July 8, 2011 /PRNewswire-Asia/ -- China Medicine Corporation (Other OTC: CHME) (the "Company"), a leading manufacturer, developer and distributor of Western pharmaceuticals, traditional Chinese medicines ("TCM"), and other health products in the People's Republic of China, today announced that the Board of Directors (the "Board") of China Medicine Corporation, after consultation with and upon the recommendation of the management of the Company and the Audit Committee of the Board (the "Audit Committee"), concluded that the Company's previously issued financial statements contained in the Company's Annual Report on Form 10-K for the fiscal years ended December 31, 2006 and 2007, and the Quarterly Reports on Form 10-Q for the periods within the fiscal years 2006 and 2007 (collectively, "the previously issued financial statements") should no longer be relied upon.
As previously disclosed in the Company's Form 8-K filed with the Securities and Exchange Commission on March 23, 2011, the Board, concluded that the Company's previously issued financial statements contained in the Company's Annual Report on Form 10-K for the fiscal years ended December 31, 2008 and 2009, and the Quarterly Reports on Form 10-Q for the periods within the fiscal years 2008, 2009 and 2010 should no longer be relied upon.
On July 1, 2011, during the course of the on-going internal reviews by the management and the Audit Committee of the Company, the Board determined that the accounting and reporting errors at Guangzhou Konzern Medicine Co., Ltd., a wholly-owned subsidiary of the Company, also occurred in fiscal years 2006 and 2007 in addition to fiscal years 2008, 2009 and the quarterly periods in fiscal year 2010, as previously reported, and such errors materially impacted the previously issued financial statements. The Company currently is not able to and will not be able to quantify the impact of these errors and related accounting adjustments until the completion of its internal reviews but has concluded that the previously issued financial statements should no longer be relied upon. The Company anticipates that at the conclusion of the internal review by the Audit Committee and its legal counsel, with the assistance of Ernst & Young Advisory Services Limited, and the completion of a re-audit of the affected fiscal years, it will have revised financial results and will issue restated financial statements.
Management is assessing what changes may be necessary in the evaluation of the Company's internal control over financial reporting and its disclosure controls and procedures and will not reach a final conclusion with respect to these matters until completion of the restatement process.
As soon as practicable, in addition to the previously disclosed amendments, the Company expects to file amendments to its Annual Report on Form 10-K for the years ended December 31, 2006 and 2007, and amendments to its Quarterly Reports on Form 10-Q for the periods within fiscal years 2006 and 2007 reflecting the restated financial statements with respect to the previously issued financial statements. Given that the review process is still ongoing, the matters discussed herein are preliminary and subject to change.
About China Medicine Corporation
China Medicine Corporation, a vertically integrated enterprise with a research and development center, manufacturing facility and well established sales network, engages in the production and distribution of prescription and over the counter drugs, traditional Chinese medicine products, herbs and dietary-supplements, medical devices, and medical formulations in China. The Company is developing a number of proprietary products for a variety of indications, including oncology, high blood pressure and toxin removal from food and animal feeds. For more information, please visit the Company's website at http://www.cmc621.com. The Company routinely posts important information on its website.
This press release contains forward-looking statements concerning the Company's business and products. The Company's actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, obtaining regulatory approval for new products, government support for rural health care, competition from existing and new competitors, changes in technology, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this cautionary statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Medicine Corporation undertakes no duty to revise or update any forward-looking statement to reflect events or circumstances after the date of this release.
In New York: Ms. Christine Duan: 1-203-682-8200
In Beijing: Ms. Wen Lei Zheng: 86-10-6599-7968
SOURCE China Medicine Corporation