Thursday, April 06, 2006

Sinosmart Group Inc. (BVI IBC) acquired by China-Biotics, Inc.

Do you want to get to know what the real British Virgin Islands offshore companies are? Here you are – the latest example:

In a Form 8-K filed with the Securities and Exchange Commission on the 23rd of March 2006, China Biotics, Inc. (CHBT.OB) informed that it had acquired Sinosmart Group Inc. This company is organized in the BVI, and it owns 100% of a Shanghai based producer of probiotic dietary supplements. At the closing of the acquisition, in exchange for all of the equity of Sinosmart, China Biotics issued 15,980,000 shares of common stock. The transaction resulted in outstanding 17,080,000 shares of common stock which China-Biotics now has.

Sinosmart was incorporated in the BVI on the 13th of February 2004 in accordance with the British Virgin Islands IBC Act. On the 11th of August 2005, Sinosmart entered an agreement to acquire 100% of the equity of Shanghai Shining Biotechnology Co. Ltd. for a total cash consideration of $2.27 million. Company net sales for 2005 was $14.42 million, at the end of the financial year total stockholder’s equity was $4.83 million.

Just before the acquisition of Sinosmart, the British Virgin Islands company, led by Chinamerica Fund, LP, had completed a private placement for US $5.07 million.

The BVI IBC Sinosmart fiscal year ends on the 31st of March. As far as nine-month period ended on the 31st of December 2005, International Business Company reported its revenues of $15.1 million and its net income of $6.1 million, or $0.36 per share, based on 17.08 million shares of China-Biotics outstanding after the acquisition. This is a 40.3% net margin and represents a 59% increase in net income over the previous period.

Of course, this is not the biggest BVI IBC. Many BVI IBC’s are much bigger and there are plenty of BVI offshore companies working worldwide. This is just one example for those who think of offshore company as of something curtained off and not related to everyday business.

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