TORONTO, ONTARIO — (Marketwire) — 08/04/11 — Asia Packaging Group Inc. (TSX VENTURE: APX) („Asia Packaging“ or the „Company“) announced the financial results of its wholly owned subsidiary, Mei Tak (HK) Group Inc. („Mei Tak“) for the twelve-month period ending March 31, 2011.
Interim Financial Results
Highlights
The financial statements and Management Discussion and Analysis for the HT Capital (the capital pool company) as well as the audited financial statements for Mei Tak are available on SEDAR.
Background
Asia Packaging changed its name on July 13, 2011 after completion of the acquisition of Mei Tak by a capital pool company, HT Capital, on April 26, 2011 („Qualifying Transaction“). The Company commenced trading on May 2, 2010 as a Tier 2 Technology/Industrial issuer on the TSXV, and graduated from being a Capital Pool Company listed on the TSXV. (See „Qualifying Transaction“ below)
As a Tier 2 Technology issuer, Asia Packing Group Inc. holds all of the issued and outstanding shares of Mei Tak , which is a Hong Kong company incorporated under the Companies Ordinance of Hong Kong. Mei Tak is a holding company that holds all of the issued and outstanding shares of Qingfeng (Jiangxi) Packing Material Technology Co., Ltd. („Qingfeng“), which is a wholly foreign owned enterprise, incorporated under the business laws of the PRC and is based in the County of Fengxin, City of Nanchang, PRC.
Mei Tak operates in the packaging industry through Qingfeng and provides packaging products and services to Chinese companies in the drug and pharmaceutical as well as food sectors. Qingfeng-s current products include cast polypropylene films, polypropylene bags and containers, and it also offers multi-colour printing and related packaging services. Qingfeng currently supplies packaging products and services to over 200 Chinese customers in China. Selected audited annual financial information for Mei Tak is as follows:
Qualifying Transaction
On October 10, 2010, the Company entered into a letter agreement (the „Letter Agreement“) amended on December 8, 2010 and January 29, 2011 for the arm-s length acquisition of 100% of the common shares of Mei Tak. This transaction was intended to be the Company-s Qualifying Transaction under Exchange Policy 2.4. Pursuant to the Letter Agreement, the Company acquired all of the issued and outstanding shares of Mei Tak in consideration for 80,000,000 common shares in the capital of the Company (the „Payment Shares“). This resulted in Mei Tak-s shareholders holding approximately 75% of the outstanding shares of the Company immediately after the closing (the „Closing“) of the Qualifying Transaction.
As additional consideration, in the event that Qingfeng achieves a minimum consolidated net profit of RMB 50 million (approx. $7.7 million) for the fiscal year ended on March 31, 2011, as evidenced by the Company-s consolidated audited financial statements for the fiscal year ended on March 31, 2011 (the „2011 Audited Financial Statements“), the Company will issue to the shareholders of Mei Tak an additional 20,000,000 common shares (the „Milestone Shares“) within 10 business days from the date the 2011 Audited Financial Statements are published.
The Payment Shares and the Milestone Shares will be subject to the standard escrow requirements imposed by Exchange policies. In addition, the Company will be required to maintain a Public Float (as such term is defined under the Exchange-s policies) of no less than 20% of the Company-s total issued common shares. Accordingly, any Payment Shares or Milestone Shares that, through their issuance would result in a contravention of the 20% Public Float requirements, will also be escrowed in a manner acceptable to the Exchange, with such shares only being released from this additional escrow when to do so would not contravene the 20% Public Float requirement.
On April 26, 2011, the Company closed the proposed Qualifying Transaction. Concurrent with the Qualifying Transaction, the Company completed a non-brokered private placement of 20,288,800 units (the „Units“) at $0.40 per Unit. Each Unit is comprised of one common share in the capital of the Company (each, a „Common Share“) and one-half of one Common Share purchase warrant (each, a „Warrant“). Each full warrant is exercisable into one Common Share for a period of two years following the closing of the Qualifying Transaction, at 0.60 in the first year and $1.00 in the second year.
This news release contains certain statements that may be deemed „forward looking statements“. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words „expects,“, „plans“, „anticipates“, „believes“, „intends“, „estimates“, „projects“, „potential“ and similar expressions, or that events or conditions „will“, „would“, „may“, „could“ or „should“ occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company-s management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management-s beliefs, estimates or opinions, or other factors, should change.
Contacts: Asia Packaging Group Inc. Robert Wilson Vice President 416-666-4005
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