Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports Under Sections 13 and 15(d) of the Securities Exchange Act of 1934.
China TMK Battery Systems will acquire 100% equity interest in Dongfang Hualian in exchange for a cash payment of approximately $11 million and 8.1 million shares of the Company's common stock. Dongfang Hualian is a lithium battery producer which designs, manufactures and sells lithium batteries.
The Company previously made an advance cash payment of approximately $10.5 million toward the purchase price. The formal closing of the acquisition, expected on or before September 15, 2011, requires approval by all relevant regulatory authorities and registration of Loyal Top's ownership of Dongfang Hualian with the Shenzhen Administration for Industry and Commerce. The purchase agreement contains a make-good provision that Dongfang Hualian achieves a net profit of approximately $9.3 million for the calendar year ending December 31, 2011. The audited financial statements reported that Dongfang Hualian generated approximately $41 million in revenue and approximately $5.5 million in net income during 2010.