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EX-10.1 - Cang Bao Tian Xia International Art Trade Center, Inc. | v187810_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report:
(Date of
earliest event reported)
June
7, 2010
____________________________
ZHONGCHAI
MACHINERY, INC.
(formerly
Equicap, Inc.)
(Exact
name of registrant as specified in charter)
NEVADA
(State or
other Jurisdiction of Incorporation or Organization)
000-31091
|
224 Tianmushan Road, |
33-0652593
|
|
Zhongrong
Chengshi Huayuan 5-1-602,
Hangzhou,
P.R. China 310007
|
|
(Commission
File Number)
|
(Address
of Principal Executive Offices and zip code)
|
(IRS
Employer Identification No.)
|
904-418-9133
(Registrant’s
telephone number, including area code)
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of registrant under any of the following
provisions:
r
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
r
|
Soliciting material
pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12(b))
|
r
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
r
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item 2.01
— Completion of Acquisition or Disposition of Assets
On June 7, 2010, Zhongchai Machinery,
Inc. (“Registrant”) has received the new business license from Industrial and
Commercial Management Bureau, and through its subsidiaries, completed the
acquisition of the 25% minority interest of Zhejiang Zhongchai Machinery Co.,
Ltd (“ZhongChai JV”). ZhongChai JV is a Sino-foreign equity joint venture
established in the Peoples Republic of China (the “PRC”) by the Registrant
through its Hong Kong subsidiary, and a local party in the PRC, Xinchang Keyi
Machinery Co., Ltd., the successor in interest to Xinchai Holding Group Co.,
Ltd. (“Xinchang Keyi”). ZhongChai JV manufacturers and sells gears and
transmission in the PRC. The gears are sold to engine and transmission
manufacturers for their engine and gearbox products. ZhongChai JV’s
transmissions are sold primarily to forklift truck manufacturers.
In
connection with the acquisition, the Articles of Association of ZhongChai JV
were changed to eliminate the right of Xinchang Keyi to designate one director
and the related obligation to have all significant matters put to the board of
directors approved by the full board. With these changes, ZhongChai
JV will be operated as a wholly owned subsidiary with full control held by the
Registrant.
The
purchase price for the 25% minority interest of ZhongChai JV was
$2,600,000. The acquisition was approved by the agency of Ministry of
Commerce in the PRC on May 4. The source of funds for the purchase
price came from _the working capital and borrowings. The acquisition agreement
is attached as Exhibit 10.1 to this Form 8-K report.
Item
9.01 — Financial Statements and Exhibits
(a)
|
Financial
Statements of the Business Acquired
|
Pursuant
to SFAS No. 141 paragraph 11, the acquisition of some or all of the
non-controlling interest in a subsidiary is not a business
combination. Therefore, the acquisition of 25% interest in ZhongChai
JV by the Registrant is not treated as a business combination and as such, Rules
8-04 and 8-05 of Regulation S-X relating to financial statements of the acquired
business and pro forma financial information are not required to be provided
under Item 9.01 of this Current Report on Form 8-K. The Registrant,
however, is providing pro forma financial statements reflecting the acquisition
for the convenience of investors. Notwithstanding this pro forma
statement, the prior financial statements of the Registrant have consolidated
the full results of ZhongChai.
(b)
|
Pro
Forma Financial Information
|
Included
commencing at page 4 of this Current Report on Form 8-K. See the
explanation provided under Item 9.01(a) above.
(c)
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Shell
Company Transactions
|
Not
applicable
(d)
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Exhibits
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Number
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Description
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10.1
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Form
of Acquisition Agreement for 25% Interest in ZhongChai
JV.
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2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Current Report on Form 8-K to be signed on its behalf by the
undersigned hereunto duly authorized.
Equicap,
Inc.
(Registrant)
|
|||
Date:
June 9, 2010
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By:
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/s/ Peter Wang | |
Peter Wang, | |||
Chairman,
President and
Chief Financial Officer
|
|||
3
Unaudited
Pro Forma Condensed Financial Statements
The
following unaudited pro forma consolidated financial statements of Equicap, Inc
(the “Company”) have been prepared to indicate how the financial statements of
the Company might have looked if the acquisition of 25% minority interest of
Zhejiang Zhongchai Machinery Co., Ltd.(“Zhongchai”) had occurred as of the
beginning of the period presented.
The pro
forma consolidated financial statements should be read in conjunction with a
reading of the historical financial statements of the Company. The pro forma
consoidated financial statements are presented for illustrative purposes only
and are not intended to be indicative of actual financial condition or results
of operations had the acquisition of 25% minority interest of Zhongchai been in
effect during the periods presented, or of financial condition or results of
operations that may be reported in the future.
4
Equicap,
Inc.
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|||||||
Unaudited
Pro Forma Condensed Balance Sheet
|
|||||||
March
31, 2010
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Historical
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Pro
Forma
|
||||||||||||
Equicap,
Inc.
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|||||||||||||
Consolidated
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Adjustments
|
Notes
|
Combined
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||||||||||
ASSETS
|
|||||||||||||
Current
assets
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|||||||||||||
Cash
& cash equivalents
|
$ | 539,914 | $ | - | $ | 539,914 | |||||||
Restricted
cash
|
90,441 | - | 90,441 | ||||||||||
Accounts
receivable, net of allowance
|
2,426,475 | - | 2,426,475 | ||||||||||
Inventory
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2,207,522 | - | 2,207,522 | ||||||||||
Notes
receivable
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1,058,565 | - | 1,058,565 | ||||||||||
Advance
payments
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5,329,020 | - | 5,329,020 | ||||||||||
Other
receivables
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597,275 | - | 297,228 | ||||||||||
Total
current assets
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12,249,212 | - | 12,249,165 | ||||||||||
Property
and equipment, net
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2,962,393 | - | 2,962,393 | ||||||||||
Goodwill
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3,411,913 | - | 3,411,913 | ||||||||||
Other
assets
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708 | - | 708 | ||||||||||
Total
assets
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$ | 18,624,226 | $ | - | $ | 18,624,226 | |||||||
LIABILITIES
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|||||||||||||
Current
liabilities
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|||||||||||||
Accounts
payable and accrued expenses
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$ | 3,121,790 | $ | - | $ | 3,121,790 | |||||||
Notes
payable
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90,441 | - | 90,441 | ||||||||||
Short-term
bank loans
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1,422,990 | - | 1,422,990 | ||||||||||
Taxes
payable
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178,256 | - | 178,256 | ||||||||||
Other
current liabilities
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667,453 | 2,600,000 |
(a)
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3,267,453 | |||||||||
Total
current liabilities
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5,480,930 | 2,600,000 | 8,080,930 | ||||||||||
Total
liabilities
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5,480,930 | 2,600,000 | 8,080,930 | ||||||||||
EQUITY
|
|||||||||||||
Stockholders’
equity
|
|||||||||||||
Common
stock, $0.001 par value, 500,000,000
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|||||||||||||
shares
authorized, 27,613,019 shares issued and
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|||||||||||||
Outstanding
at March 31, 2010
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27,613 | - | 27,613 | ||||||||||
Stock
subscriptions receivable
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(33,120 | ) | - | (33,120 | ) | ||||||||
Additional
paid-in capital
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16,484,097 | - | 16,484,097 | ||||||||||
Statutory
reserves
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124,460 | - | 124,460 | ||||||||||
Accumulated
deficit
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(8,158,417 | ) | 372,571 |
(c)
(d)
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(7,785,846 | ) | |||||||
Accumulated
Other comprehensive income
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1,431,995 | - | 1,431,995 | ||||||||||
Total
stockholders' equity
|
9,876,628 | 372,571 | 10,249,199 | ||||||||||
Noncontrolling
interest
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3,266,668 | (2,972,571 | ) |
(b)
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294,097 | ||||||||
Total
liabilities and equity
|
$ | 18,624,226 | $ | - | $ | 18,624,226 |
5
Equicap,
Inc.
Unaudited
Pro Forma Condensed Statements of Operations
|
|||||
For
the Nine Months Ended March 31,
2010
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Historical
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Pro
Forma
|
||||||||||||
Equicap,
Inc.
|
Adjustments
|
Notes
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Combined
|
||||||||||
Sales
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$ | 7,040,579 | $ | - | $ | 7,040,579 | |||||||
Cost
of sales
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5,481,480 | - | 5,481,480 | ||||||||||
Gross
profit
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1,559,099 | - | 1,559,099 | ||||||||||
Operating
expenses
|
|||||||||||||
Selling,
general and administrative
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916,530 | - | 916,530 | ||||||||||
Income
from operations
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642,569 | - | 642,569 | ||||||||||
Other
income (expenses)
|
|||||||||||||
Interest
income (expenses), net
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(63,364 | ) | - | (63,364 | ) | ||||||||
Other
income, net
|
56,598 | 159,844 |
(c)
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216,442 | |||||||||
Total
other income (expenses)
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(6,766 | ) | 159,844 | 153,078 | |||||||||
Income
before provision for income taxes
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635,803 | 159,844 | 795,647 | ||||||||||
Provision
for income taxes
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140,541 | - | 140,541 | ||||||||||
Net
income
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495,262 | 159,844 | 655,106 | ||||||||||
Less:
Net income attributable to noncontrolling interest
|
213,424 | (212,727 | ) |
(d)
|
697 | ||||||||
Net
income attributable to Equicap
|
281,838 | 372,571 | 654,409 | ||||||||||
Other
comprehensive income
|
|||||||||||||
Foreign
currency translation adjustment
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16,521 | - | 16,521 | ||||||||||
Comprehensive
income
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$ | 298,359 | $ | 372,571 | $ | 670,930 | |||||||
Basic
and diluted earnings per share
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$ | 0.01 | $ | 0.02 | |||||||||
Weighted
average number of common shares
|
|||||||||||||
outstanding:
|
|||||||||||||
Basic
and Diluted
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27,613,019 | 27,613,019 |
6
Equicap,
Inc.
Notes
to Pro Forma Adjustments
a)
|
Ajustment
to record the cash that will be paid to purchase 25% ownership of
Zhongchai.
|
b)
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Ajustment
to eliminate minority interest in
Zhongchai.
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c)
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Ajustment
to record minority interest over the purchase price.
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d)
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Ajustment
to add 25% net income of Zhongchai in nine months ended March
2010.
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7