First China Pharma Updates Acquisition Status of Pharmaceutical Distributor

June 21, 2011 |

4 min read

HONG KONG--(Marketwire - June 21, 2011) - First China Pharmaceutical Group, Inc. (OTCBB: FCPG) (“First China” or the “Company”) is pleased to advise that the proposed acquisition of 100% of the interests of Shenzhen Ming He Tang Pharmaceutical Co., Ltd. (“Min He Tang”) of Shenzhen City, Guangdong Province continues to move ahead.

On June 14, 2011, First China and Ming He Tang executed an addendum to the previously executed Letter of Intent (“LOI”) dated March 10, 2011. The addendum sets forth a Purchase Price agreement whereby (subject to a binding agreement) it is proposed that First China shall acquire all of the issued and outstanding shares of capital stock of Ming He Tang in exchange for 3 million shares of First China’s restricted common stock and a commitment by First China to invest a minimum of USD $2 million in the business of Ming He Tang over a 12 month period from the closing date of the acquisition for the purpose of replicating First China’s business model.

Ming He Tang was founded in 2002 and has established itself as a well-positioned and respected distributor of pharmaceutical products in the burgeoning south China marketplace. The company currently offers approximately 2,500 drug varieties delivered to over 886 primary customers. Unaudited and estimated sales revenue for 2009 and 2010 are reported as RMB 90,000,000 (US$13.8 million) and RMB 110,000,000 (US$16.9 million).

The parties will use commercially reasonable efforts to execute a definitive agreement as quickly as practicable and the Definitive Agreement shall contain customary representation and warranties, covenants and indemnification provisions.

Details of the company’s business, finances, appointments and agreements can be found as part of the Company’s continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission’s (“SEC”) EDGAR database.

About First China Pharmaceutical Group, Inc. (OTCBB: FCPG)
First China Pharmaceutical Group, Inc. aims to develop a high growth pharmaceutical distribution company generating significant revenue from the sale of healthcare products in China. As part of its business strategy, the Company has acquired the assets of Kun Ming Xin Yuan Tang Pharmacies Co. Ltd. (XYT), which includes a strategic advantage over its competitors as it is believed to be one of a limited number of pharmaceutical distribution companies in Yunnan Province that has obtained government approval to fulfill orders over the internet. First China Pharmaceutical Group plans to continue the rapid growth of the company from its current position as a provider of approximately 7,100 drugs to more than 4,700 pharmacies, hospitals and clinics in China’s Yunnan Province. For more information visit: www.firstchinapharma.com.

Notice Regarding Forward-Looking Statements
This news release contains “forward-looking statements” as that term is defined in Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development of new business opportunities, projected revenues of Ming He Tang, future growth plans, future financial commitments, and the potential for entering into a binding acquisition agreement with Ming He Tang. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

ON BEHALF OF THE BOARD
First China Pharmaceutical Group, Inc.
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Zhen Jiang Wang
Chairman and CEO