The Company reported a net loss for the third quarter of 2007 of $822 thousand compared to a net loss of $542 thousand for the third quarter of 2006, before one-time losses on discontinued operations. This net loss for the quarter was mainly attributable to the higher payment and accrued interest expenses as a result of the acquisition financing loan due to RimAsia Capital Partners for Enshi. During this quarter the Company took a one-time charge of $10.8 million related to the write-off of the Enshi subsidiary which it no longer owns. The Company has commenced legal proceedings for recession and damages against Mr. Li Xiaobo, the previous owner and controlling shareholder of Enshi, and his related parties for breach of representations and warranties and fraud. The Hong Kong courts have frozen approximately $10,000,000 worth of assets and the Defendants lost their opposition actions against the seizure order. The Company reasonably expects to prevail in the lawsuit against the Defendants. T he recovered value of Enshi after the completion of the litigation against Li Xiaobo, if any, will be recognized as income and will cover RimAsia's debt. During the third quarter of 2006, the Company had a one-time gain from discontinue operations of $438 thousand. Therefore, the net loss for the three month period ending September 30, 2007 was $11.6 million versus $107 thousand for the same period one year ago.
Ms. Zhang Jian, Chairwoman of the Board, commented, ''While this
quarters results were strongly impacted by the write-off of Enshi and the
associated expenses, we are very pleased with our 65% top line growth and
increase in gross profit of 102%. Management believes that these trends
point to a positive future for our Company. As we continue to grow and
focus on our new product
|SOURCE China Biopharmaceuticals Holdings, Inc.|
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