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) | Shell Company Transactions |
Not applicable
(d) | Exhibits |
Number | Description |
10.1 | Form of Acquisition Agreement for 25% Interest in ZhongChai JV. |
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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 | By: | /s/ Peter Wang | |
Peter Wang, | |||
Chairman, President and Chief Financial Officer | |||
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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.
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Equicap, Inc. | |||||||
Unaudited Pro Forma Condensed Balance Sheet | |||||||
March 31, 2010 |
Historical | Pro Forma | ||||||||||||
Equicap, Inc. | |||||||||||||
Consolidated | Adjustments | Notes | Combined | ||||||||||
ASSETS | |||||||||||||
Current assets | |||||||||||||
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 | 2,207,522 | - | 2,207,522 | ||||||||||
Notes receivable | 1,058,565 | - | 1,058,565 | ||||||||||
Advance payments | 5,329,020 | - | 5,329,020 | ||||||||||
Other receivables | 597,275 | - | 297,228 | ||||||||||
Total current assets | 12,249,212 | - | 12,249,165 | ||||||||||
Property and equipment, net | 2,962,393 | - | 2,962,393 | ||||||||||
Goodwill | 3,411,913 | - | 3,411,913 | ||||||||||
Other assets | 708 | - | 708 | ||||||||||
Total assets | $ | 18,624,226 | $ | - | $ | 18,624,226 | |||||||
LIABILITIES | |||||||||||||
Current liabilities | |||||||||||||
Accounts payable and accrued expenses | $ | 3,121,790 | $ | - | $ | 3,121,790 | |||||||
Notes payable | 90,441 | - | 90,441 | ||||||||||
Short-term bank loans | 1,422,990 | - | 1,422,990 | ||||||||||
Taxes payable | 178,256 | - | 178,256 | ||||||||||
Other current liabilities | 667,453 | 2,600,000 | (a) | 3,267,453 | |||||||||
Total current liabilities | 5,480,930 | 2,600,000 | 8,080,930 | ||||||||||
Total liabilities | 5,480,930 | 2,600,000 | 8,080,930 | ||||||||||
EQUITY | |||||||||||||
Stockholders’ equity | |||||||||||||
Common stock, $0.001 par value, 500,000,000 | |||||||||||||
shares authorized, 27,613,019 shares issued and | |||||||||||||
Outstanding at March 31, 2010 | 27,613 | - | 27,613 | ||||||||||
Stock subscriptions receivable | (33,120 | ) | - | (33,120 | ) | ||||||||
Additional paid-in capital | 16,484,097 | - | 16,484,097 | ||||||||||
Statutory reserves | 124,460 | - | 124,460 | ||||||||||
Accumulated deficit | (8,158,417 | ) | 372,571 | (c) (d) | (7,785,846 | ) | |||||||
Accumulated Other comprehensive income | 1,431,995 | - | 1,431,995 | ||||||||||
Total stockholders' equity | 9,876,628 | 372,571 | 10,249,199 | ||||||||||
Noncontrolling interest | 3,266,668 | (2,972,571 | ) | (b) | 294,097 | ||||||||
Total liabilities and equity | $ | 18,624,226 | $ | - | $ | 18,624,226 |
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Equicap, Inc.
Unaudited Pro Forma Condensed Statements of Operations | |||||
For the Nine Months Ended March 31, 2010 |
Historical | Pro Forma | ||||||||||||
Equicap, Inc. | Adjustments | Notes | Combined | ||||||||||
Sales | $ | 7,040,579 | $ | - | $ | 7,040,579 | |||||||
Cost of sales | 5,481,480 | - | 5,481,480 | ||||||||||
Gross profit | 1,559,099 | - | 1,559,099 | ||||||||||
Operating expenses | |||||||||||||
Selling, general and administrative | 916,530 | - | 916,530 | ||||||||||
Income from operations | 642,569 | - | 642,569 | ||||||||||
Other income (expenses) | |||||||||||||
Interest income (expenses), net | (63,364 | ) | - | (63,364 | ) | ||||||||
Other income, net | 56,598 | 159,844 | (c) | 216,442 | |||||||||
Total other income (expenses) | (6,766 | ) | 159,844 | 153,078 | |||||||||
Income before provision for income taxes | 635,803 | 159,844 | 795,647 | ||||||||||
Provision for income taxes | 140,541 | - | 140,541 | ||||||||||
Net income | 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 | 16,521 | - | 16,521 | ||||||||||
Comprehensive income | $ | 298,359 | $ | 372,571 | $ | 670,930 | |||||||
Basic and diluted earnings per share | $ | 0.01 | $ | 0.02 | |||||||||
Weighted average number of common shares | |||||||||||||
outstanding: | |||||||||||||
Basic and Diluted | 27,613,019 | 27,613,019 |
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Equicap, Inc.
Notes to Pro Forma Adjustments
a) | Ajustment to record the cash that will be paid to purchase 25% ownership of Zhongchai. |
b) | Ajustment to eliminate minority interest in Zhongchai. |
c) | Ajustment to record minority interest over the purchase price. |
d) | Ajustment to add 25% net income of Zhongchai in nine months ended March 2010. |
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