- The Company to Restate Previously Issued Financial Statements -
GUANGZHOU, China, March 23, 2011 – China Medicine Corporation (OTC Bulletin Board: 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 it has filed with the United States Securities and Exchange Commission 1) a Current Report on Form 8-K to disclose that its previously issued financial statements should not be relied upon, and 2) a Form 12b-25 Notification of Late Filing for its Annual Report on Form 10-K for the year ended December 31, 2010. The Company expects to restate its previously issued financial statements for fiscal years 2008 and 2009, and the quarters within the fiscal years of 2008, 2009, and 2010, in order to correct certain accounting and reporting errors that impact the accuracy of the previously issued financial statements. Because of the nature and timing of the review, the Company will be unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 with the SEC by March 31, 2011, the prescribed due date.
The Board of Directors (the "Board") of the Company, after consultation with and upon recommendation of the management of the Company and its Audit Committee, concluded that the Company's previously issued financial statements contained in its Annual Reports on Form 10-K for fiscal years 2008 and 2009, and the Quarterly Reports on Form 10-Q for the periods within the fiscal years of 2008, 2009 and 2010, (collectively, "the previously issued financial statements") should no longer be relied upon.
In connection with the preparation of the Company's financial statements for the year ended December 31, 2010, certain accounting and reporting errors were identified with respect to improper activities by certain employees of Guangzhou LifeTech Pharmaceutical Co., Ltd ("LifeTech"), a wholly-owned subsidiary that the Company acquired on October 26, 2009. The Company is currently conducting an internal review with respect to these matters. In the course of such review, it has been observed that similar accounting and reporting errors also took place at Guangzhou Konzern Medicine Co., Ltd., another wholly-owned subsidiary of the Company, in relation to the subsidiary's financial statements for the fiscal years ended December 31, 2008 and 2009. The Board intends to engage a reputable, international public accounting firm to assist the Board with its review of the Company's financial statements and its internal control over financial reporting.
The Company does not expect that the filing of the Annual Report on Form 10-K will be made within the extension period provided for under Rule 12b-25 of the Securities Exchange Act of 1934, as amended. The delay could not be eliminated without unreasonable effort or expense. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 will be filed as soon as practicable after the Company has completed the restatement process.
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
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 Beijing: Ms. Wen Lei Zheng: 86-10-6599-7968