Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. BLUE BRIDGE CAPITAL, INC. (1429684) 10-Q published on Aug 15, 2011 at 2:34 pm
Reporting Period: Jun 29, 2011
On December 16, 2009, BBC entered into a share transfer agreement (the “Share Transfer Agreement”) with the common stock shareholders of Guangdong Yi An Investment Consulting Co., Ltd (“Yi An”). Pursuant to the Share Transfer Agreement, BBC will acquire 51% of the issued and outstanding common stock of Yi An for an aggregate of RMB 25,500,000 (or approximate $4,000,000). The Share Transfer Agreement was approved by the Chinese government on March 9, 2010. With the unanimous written consent of the board of directors of the Company, on June 7, 2010 the Yi An Shareholders received an aggregate of $3,951,595. In exchange, the Company acquired 51% of the issued and outstanding common stock of Yi An (the “Closing”). As a result of the Closing, both parties agreed that Yi An became a subsidiary of the Company from June 7, 2010, and this transactions was accounted for as a business combination.
The total purchase price for this acquisition was $3,951,595. Of the total cash consideration of $3,951,595, $306,005 was preliminarily allocated to gain on bargain purchase, $13,102,872 to tangible assets, $169,403 to cash acquired, $2,563,660 to net assumed liabilities and $6,451,615 to noncontrolling interests. Gain on bargain purchase represents the excess of net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed excess over the aggregate purchase price and the fair value of the noncontrolling interest in Yi An. Such preliminarily gain is present as an extraordinary item separately in the Company’s condensed statement of operation and other comprehensive income.
This business combination did have a material impact on the Company’s condensed consolidated financial statements, and therefore pro forma disclosures are presented below. The following information is under the assumption that BBC purchased 51% of Yi An interest on Yi An’s inception date as of September 7, 2009 at book value.
As of June 30, 2011 and December 31, 2010, Yi An entered into several entrusted loan arrangements with certain bankers in the aggregate amount of $15,780,924 and $13,654,984, respectively, in which Yi An acts as the entrusting party, the bankers act as the lender and a related company, acts as the borrower (the “Entrusted bank loans receivable from a related party”). As of June 30, 2011, a Entrusted bank loan receivable from a related party of $3,094,298 bears interest at 20% per annum and the remaining Entrusted bank loans receivable from a related party of $12,686,626 bear interest at 22.8% per annum. As of December 31, 2010, Entrusted bank loans receivable from a related party of $6,068,882 bear interest at 8.4% per annum and the remaining Entrusted bank loans receivable from a related party of $7,586,102 bear interest at 20% per annum. All Entrusted bank loans receivable will be wholly repayable within twelve months from the correspondent dates of the arrangements entered into. The interest income arising from the Entrusted bank loans receivable from a related party for the three months ended June 30, 2011 and 2010 was $573,000 and $Nil, respectively, while for the six months ended June, 30, 2011 and 2010 amounted to $1,085,717 and $Nil, respectively.
In response to the characteristics of the private sector economy and the local financial markets in China, Yi An established a proprietary database which can quickly collect and analyze the market data, clients’ credit and financial information, as well as the latest bank lending data. Together with our well-trained sales and consulting team, we offer world class financial consulting, financial advisory, management consulting, and business information consulting services in the PRC.