LOS ANGELES, Calif., Dec. 13 /Xinhua-PRNewswire-FirstCall/ -- China Sky One Medical, Inc. , one of the leading producers and distributors for external-Chinese medicines in China, has announced that a strategic agreement was reached between Liu Yan-qing, president of China Sky One Medical, Inc. and Mr. Wu Jie-chen, president of Heilongjiang Tianlong Pharmaceutical Company. As a result of this agreement, CSKI will acquire all of the products, dealership, marketing network of Tianlong Beijing office and the Beijing office staff for USD $381,700. Under the terms of the agreement, CSKI will complete the transaction by December 15, 2006, and complete the transition with Tianlong by December 31, 2006, with the expectation that beginning on January 1, 2007, all products, dealership, marketing network, staff of Tianlong at its Beijing office will be under the ownership and management of CSKI.
CSKI and Tianlong have historically been competitors. CSKI had sales advantages over Tianlong in most cities in China, except in Beijing. Facing the continuous increase of sales power of CSKI in China, including Beijing, Tianlong has recently changed its strategy and decided to close its branches in all areas of China except its Beijing office, and plans to focus on the research and manufacturing of drugs. In contrast, CSKI has devoted its efforts to realizing the maximum utilization of its sales network by selling drugs from domestic and overseas suppliers as well as the development of pharmaceuticals with the ownership of the related intellectual property. The two companies entered into the agreement as a means of combining the efforts, resources and product offerings of both companies.
Tianlong's Beijing office had revenues of approximately USD $1.5 million from January to November of 2006, with 20% in net profits. CSKI expects sales to increase by 30% in 2007, which means the purchase of Tianlong would increase 2007 sales to approximately USD $1.98 million. The terms of the transaction were negotiated between the presidents of both companies, and are based on market input and CSKI's expectation of revenues resulting from the acquisition.
About China Sky One Medical, Inc.
China Sky One Medical, Inc., a Nevada corporation, is a holding company whose principal operations are through its subsidiaries, which are engaged in the manufacture, marketing and distribution of pharmaceutical and medicinal products. Through its wholly owned subsidiaries, American California Pharmaceutical Group, Inc. (''ACPG''), Harbin Tian Di Ren Medical Science and Technology Company (''TDR''), Kangxi Medical Care Product Factory (''Kangxi''), and Harbin First Bio-Engineering Company Limited ("First"), the Company's principal revenue source is the manufacture and sale of over-the-counter pharmaceutical products.
ACPG, a wholly-owned subsidiary of the Company, operates as a holding company for the other subsidiaries. TDR's principal business is the manufacture and sale of branded nutritional supplements and over-the-counter plant and herb-based medicinal products. Its manufacturing facilities are in the City of Harbin, Heilongjiang Province. It has evolved into an integrated manufacturer, marketer, and distributor of external use natural Chinese medicinal products sold primarily to and through domestic pharmaceutical chain stores in China with its subsidiaries, Kangxi and First. Kangxi's principal business activity is to manufacture and sell branded external use Chinese medicine and other natural products under the registered trademark ''Kangxi.'' It has 6 product lines: spray, ointment, powder, patch, cream, and miscellaneous health and beauty products. It has become one of the leading external use Chinese medicine factories with a full range of product lines and development capacity. First's principal business activity is to research and develop the use of natural medicinal plants and biological technology products such as New Endothelin-1. First is one of the first companies in Heilongjiang Province conducting research and development of high technology biological products. Its facility is now under final inspection by the Chinese State Food and Drug Administration (''SFDA'') for the qualification as a certified GMP production facility. On July 31, 2006, Kangxi merged with First, with Kangxi's existing business activities continuing under First. http://www.skyonemedical.com
Certain of the statements made herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in The People's Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
For more information, please contact: Alvin Pan Sinavest Corporate Relations Tel: +1-213-225-6226
China Sky One Medical, Inc.
CONTACT: Alvin Pan of Sinavest Corporate Relations, +1-213-225-6226
Web site: http://www.skyonemedical.com/
