Laiyang Jiangbo Pharma to Execute Reverse Merger

Richard Daverman, PhD
ChinaBio Today



Laiyang Jiangbo Pharmaceuticals Co., Ltd. of Shandong will effect a reverse merger with Genesis Technology Group (GTEC.OB). In its fiscal 2007 (ended June 30, 2007), Laiyang Jiangbo earned $22 million on $76 million of revenue. It has assets of $55 million, including cash totaling $17 million.

Genesis has been in the business of helping Chinese ventures go public with the help of capital from the West. During the past year, two companies completed the process, including Lotus Pharmaceuticals (LTUS.OB). Another company, Gold Horse International, a construction firm, merged with Speedhaul Holdings (SPEH.OB).

Genesis owns a 51% interest in a partnership that holds shares given in exchange for the services provided by the company in helping companies become publicly owned. Genesis currently has a market capitalization of $27 million.

The owners of the parent of Laiyang Jiangbo Pharma will be issued stock equivalent to 75% of the new Genesis Technology, making the transaction worth $81 million to them. They will be issued 5,995,780 shares of Series B Voting Convertible Preferred Stock and 597 shares of Genesis common stock. The shares of Series B Preferred Stock issued are convertible on a 50 to 1 basis, giving the Laiyang Jiangbo owners the equivalent of 299,789,000 shares of Genesis’s common stock. Combined with the stray 597 common shares, they own 75% of the outstanding shares.

Genesis said that Laiyang Jiangbo increased its revenues by an average of 187% over the past two years, while profits were up an average of 748%. Genesis, in its press releases and SEC filings, did not give any detail about the nature of Laiyang Jiangbo’s pharmaceutical business.

Once the transaction is complete, the present management and board of directors of Genesis will resign, to be replaced by the leadership of Laiyang Jiangbo Pharma.




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