Axm Pharma Inc. a manufacturer of proprietary and generic pharmaceutical and nutraceutical products for the Chinese and other Asian markets, announced that its wholly-owned subsidiary Axm Shengyang entered into an Acquisition Restructure and Technology Transfer Agreement with Beijing Yuhuatang Biological Sci-Tech Development Co., Ltd. (Yuhuatang), a leading Chinese research institute.
Pursuant to the Agreement, Axm will issue approximately 4.5 million shares of the company's common stock and RMB 1 million to Yuhuatang in exchange for all the common stock and technology of Yuhuatang.
Yuhuatang will become a wholly owned subsidiary of Axm. The company believes that the Agreement will allow it to expand its product lines. The technology of Yuhuatang was granted innovative funds for Small and Medium Enterprises from State Science and Technology Ministry.
Under the Agreement, Axm will acquire a broad portfolio of products including products in the areas of testosterone (a State-listed key new product) and testosterone undecanoate (a National Innovation Fund-supported product), which was granted innovative funds for Small and Medium Enterprises from State Science and Technology Ministry. These products contain Androstenedione, which is in such great demand in China, that the demand for the product significantly exceeds the supply. The Company believes it can produce these products at its GMP-certified 60,000 square meter facility and expects to produce and launch these products during the fourth quarter of 2007.
The new facility will be constructed in compliance with both FDA and Chinese GMP requirements. Financing for the construction will come from Chinese investors under financial terms which are currently being negotiated. Products produced at this facility will be both exported and sold domestically The factory is capable of producing 30,000,000 tubes for ointment, 500,000,000 tablets and 250,000,000 capsules annually.
The company also announced that it has received the first instalment totalling 3 million RMB (approximately $380,000) of an investment from Warner Corp., a New York-based investment firm. The initial proceeds will be used for general corporate purposes, including legal and auditing services, as well as the initial start-up of new products. Recently, AXM engaged Paritz & Company, P.A. as its independent accountant to audit its financial statements.