China Pediatric Pharm. Inc. (fka CPDU)

[2morrowsGains]

NICE Q3 results based on info in Friday's Form 8K/A filing...

- Q3 Net Income = approx $998k = Approx $0.12 EPS.

- Forward PE = 3.6 based on current $1.74 share price (and it's been trading lower).

- NICE increase in Cash & Equivalents...$2.8M (Q/E 9/30/09) UP from $800k (Q/E 6/30/09)...
As of June 30, 2009, we had cash and cash equivalents of approximately $0.8 million.
As of September 30, 2009, we had cash and cash equivalents of approximately $2.8 million.

- A/R is down from $5.1M (Q/E 6/30/09) to $3.9M (Q/E 9/30/09).

- NO long term debt with total liabilites of ONLY $3.6M.

- Paying taxes.

- Net cash provided in operating activities for the six months ended June 30, 2009 was $14,078.
Net cash generated in operating activities for the nine months ended September 30, 2009 was $1,565,534.

- LOW share count ...

"These pro forma financial statements assume the Exchange Transaction occurred as of the beginning of the period ending June 30, 2009. Therefore, the weighted average number of shares outstanding for the period ending June 30, 2009 equals the total number of shares outstanding upon completion of the Exchange Transaction as follows:

Pre-Exchange Transaction Common Shares Outstanding:     9,300,000    
  Re-purchase of the Company’s shares:     (5,000,000 )  
  Reverse stock split (7 pre-shares for 2 post-shares):     (3,071,429 )  
  Issuance of the Company’s shares for all outstanding shares of China Children:     7,000,000    
  Post-Exchange Transaction Common Shares Outstanding:     8,228,571

Note that the potentially issuable shares of common stock underlying warrants have been excluded from the weighted average number of shares outstanding in the calculation of basic and diluted earnings per share as application of the treasury stock method would result in the assumed exercise of warrants being anti-dilutive."

RE Warrants...

There are approx 2.5M warrants outstanding. "Assuming the exercise of the Warrants, as of September 30, 2009, we have 10,728,571 shares of common stock outstanding."

"Each Warrant and piggy-back warrant entitles the holder to purchase one share of our Common Stock. The Warrants will be exercisable, in whole or in part, at an exercise price equal to $3.00 per share (“Exercise Price”). The Piggyback Warrants will be exercisable, in whole or in part, at an exercise price equal to $5.00 per share (“Exercise Price”). The Warrants may be exercised at any time upon the election of the Investor, beginning on the date of issuance and ending of the second anniversary of the closing of the Share Exchange Agreement. The Piggy-back Warrants may be exercised at any time upon the election of the Investor, beginning on the date of issuance and ending of the third anniversary of the closing of the Share Exchange Agreement."
(page 40)
http://sec.gov/Archives/edgar/data/1354071/000112785509000513/lidhair8ka2100609.htm

Waiting on the symbol change which should draw more attention to the company...

- "On the effective date of the merger, the Company’s name was changed to “China Pediatric Pharmaceuticals, Inc.” and the Company’s Articles of Incorporation were amended to reflect this name change.
Following the Combination, the combined Company will continue to be traded on the OTCBB, under the symbol “LHSI”, however we will request a new symbol closer in form to China Pediatric Pharmaceuticals, Inc."
http://finance.yahoo.com/news/OTCBB-LHSI-Completes-Name-bw-610709196.html?x=0&.v=2

LHSI could be a nice Chinese sleeper stock.

All notes are my opinion based on LHSI's 11/27/09 8-K/A filing and should be re-checked.