First China (PINK:FCPG)

Company Snapshot:

Pharmaceutical distribution company

Industry Snapshot:

• The pharmaceutical distribution industry in China is currently highly fragmented. There were more than 9,000 Good Supply Practice (“GSP”) certified pharmaceutical distributors as of 2007 according to the South Medicine Economics Research Institute, an affiliate of the State Food and Drug Administration (“SFDA”). This fragmentation of the pharmaceutical industry has resulted in an inefficient supply chain for the distribution of most pharmaceutical products without the advanced logistics services featured in more developed markets.

• We expect that, over time, the PRC pharmaceutical distribution industry will experience consolidation in the manner experienced in North America and Europe, as distributors seek to achieve economies of scale and optimize their resources. The trend towards consolidation in the PRC pharmaceutical industry has also been intensified by increased regulatory requirements and policies imposed by the PRC government on market participants in order to implement uniform quality control criteria for the distribution of pharmaceuticals and ensure a stable supply of safe, effective medicines throughout the country. For example, in 2003 the SFDA adopted and strictly enforced GSP certification as the relevant standard for quality control in pharmaceutical distribution. A number of smaller distributors were forced to exit the market due to the associated higher compliance costs following the adoption of GSP certification and other regulatory standards. We believe that the more rigorous regulatory standards and policies imposed by the PRC government will accelerate the trend towards consolidation in the pharmaceutical industry, and favor the continued growth of pharmaceutical distributors with large-scale, nationwide pharmaceutical distribution operations and effective quality controls that are positioned to benefit from the changes in PRC regulatory requirements and policies. In addition, the imposition of price controls imposed by the PRC government, the centralization of tender and bidding processes among public hospitals and consolidation among drug manufacturers are additional factors that will also contribute to the trend towards consolidation in the industry.

Post Merger Share Calculation:

• 45,000,000: Pre reverse merger outstanding shares
• 15,000,000: Newly issued shares of Common Stock

GeoTeam® best effort calculation of total post reverse merger shares assuming full conversions:  60,000,000

Financial Snapshot:

• Sales of Chinese patent drugs, antibiotics, bio-chemicals, chemical preparations and biologicals for the six months ended June 30, 2010 totaled US$13,878,888, an increase of 15.8% from US$11,983,956. 
• Net income increased to US$1,678,000 for the six months ended June 30, 2010 from US$1,170,779 for the six months ended June 30, 2009, an increase of US$507,221, or 43.3%.
  
• Sales for the year ended December 31, 2009 were US$25,285,526, an increase of 47.4% from US$17,154,331.
• Net income for the year ended December 31, 2009 was US$2,743,496, an increase of US$1,231,173, or 81.4%